SMM: in the early morning of the 2nd, US stocks closed mixed on Wednesday, with the Nasdaq setting an all-time high closing record. The US private sector employment data for June ADP recorded the biggest increase in history, but it was still lower than expected. The number of coronavirus infections in many states in the United States continues to climb, raising concerns among investors about the re-blockade. The minutes of the Fed meeting said there would be more analysis of the control of the yield curve.
The Dow closed down 77.91 points, or 0.30%, at 25734.97; the Nasdaq was up 95.86 points, or 0.95%, at 10154.63; and the S & P 500 was up 15.57, or 0.50%, at 3115.86.
Driven by the rise in technology stocks, the Nasdaq closed at an all-time high. Us technology stocks generally rose, Netflix (485.64, 30.60 (6.72%), Amazon (2878.7, 119.88, 4.35%), Tesla (1119.63, 39.82, 3.69%), Microsoft (204.7, 1.19) 0.58%) all set record highs, of which Netflix rose more than 6%.
Fed minutes: more analysis of yield curve control
The Fed released the minutes of its June 9-10 meeting on Wednesday and discussed in depth how the yield curve controls (YCC) and strengthens forward-looking guidance for future policy-making. During its June meeting, the Fed continued to keep its benchmark interest rate at near zero between 0% and 0.25%.
In its minutes, the Fed reiterated its commitment to using all tools to support the US economy, and members agreed to do more analysis of yield curve controls as needed. it also discussed whether the upper limit or target of the yield curve could support forward guidance and "supplement" asset purchases. Committee members' assessment of the yield curve includes a review of the experience of the United States in World War II and the policies currently used by Japan and Australia.
There were "a lot of concerns" about whether the Fed could target the yield curve while maintaining control over the size and composition of its balance sheet, according to the minutes. When discussing the goal of the yield curve, "almost all participants" raised "a lot of questions" about the costs and benefits of this approach.
Several members pointed out that as long as the Fed's forward guidance is "still credible", it is uncertain whether it is necessary to strengthen the forward guidance through the implementation of yield curve control. Several committee members believed that a "well-designed yield curve target" would be a "powerful tool".
Officials noted that "the current monetary policy position is still appropriate," but that the Fed should give clearer forward guidance on the direction of the federal funds target rate and a clearer signal on asset purchases, the minutes said. because forward guidance and asset purchases are "important" to achieve employment and inflation targets.
Most policymakers believe that once the economy becomes clearer, the Fed should provide clearer forward guidance on interest rates and bond purchases. Participants "generally expressed" support for forward-looking guidance based on economic results, and some expressed support for bundling the forward-looking guidance with the inflation target, allowing inflation to exceed the 2 per cent target "temporarily and moderately".
The minutes also said that negative interest rates are not an attractive policy tool.
With regard to the US economy, the minutes said, "participants commented that there is still a great deal of uncertainty and considerable risks in the economic outlook," and agreed that second-quarter data could indicate the sharpest decline in economic activity since World War II. Committee members expect consumption to grow strongly in the second half of this year, but the rate of recovery is not expected to exceed the level before 2020.
After the minutes were released, according to CME Fed Watch, the probability of the Fed keeping interest rates in the 0.25% range in July was 100%, and the probability of raising interest rates by 25 basis points to 0.25% was 0%. In September, the probability of keeping interest rates in the 0.25% range was 100%, and the probability of raising interest rates by 25 basis points was 0%.
June ADP employment data hit the biggest increase in history, but still lower than expected
On the economic data side, private employment in ADP in the United States increased by 2.369 million in June, with a forecast increase of 2.9 million and a previous decrease of 2.76 million.
Specific data show that US manufacturing employment increased by 88000 in June and fell by 719000 in May. Employment in the construction sector increased by 394000 and decreased by 22000 in May. Employment in trade / transport / utilities increased by 288000 and decreased by 826000 in May. The hotel industry had the largest increase in employment, at 961000, while small businesses overall increased by 937000.
After the release of the report, the vice president of ADP Employment data said: "as the economy continues to recover slowly, we have seen a significant rebound in the sectors that have lost the most jobs. In fact, 70% of the new jobs this month come from leisure, hotel, trade and construction. "
Investors will usher in a more important non-farm payrolls report in June after the release of ADP payrolls data. The report is expected to show that the hard-hit U. S. economy created 3 million jobs last month, up from 2.5 million in May.
The development of the epidemic is still a concern. Apple (364.11,-0.69,-0.19%) has so far reclosed 77 stores.
Investors continue to follow the development of the coronavirus epidemic. The surge in coronavirus infections in the United States has paralyzed many southern states and prompted more states and cities to suspend or reverse reopening plans. On Tuesday, the number of new confirmed cases of coronavirus in the United States reached 47000, the most serious increase since the outbreak. Public health officials in the United States have warned that the number of new confirmed cases in the United States could soar to 100000 a day.
On June 30, Fauci, director of the National Institute of Allergy and Infectious Diseases, said at a congressional hearing that the United States was "going in the wrong direction" in dealing with the new coronavirus pandemic.
In response to Democratic Senator Warren (Elizabeth Warren) about how many coronavirus infections and deaths are likely to occur in the United States before the end of the pandemic, Fauci said he could not make "accurate predictions" and that if current trends continued, he would "not be surprised" that there were 100000 new cases a day in the United States.
Us stocks have rebounded sharply since their March lows, but a surge in infections in the US could significantly limit them.
Tom Essaye, founder of Sevens Report, said: "We saw a big rise in US stocks in the second quarter, and to be fair, US stocks were driven by a lot of positive factors."
Essaye added: "but the number of coronavirus infections is accelerating. This will at least delay the reopening of the economy, which the market must take into account and readjust pricing accordingly. And I think there is a greater risk that US stocks turn sideways or even fall. "
On Tuesday, Texas reported the highest number of new confirmed and hospitalized cases in a single day since the outbreak, and the state tested 159986 on the same day, of which 6975 were positive. California added 6367 new confirmed cases on Tuesday, the second highest one-day increase since the outbreak.
Market participants lack confidence in US stocks in the second half of the year because it is impossible to predict how and when the rising virus infection in the US will be brought under control, as well as uncertainties over corporate earnings and economic recovery.
According to a survey released earlier this week by market research firm DataTrek, there is a lack of consensus among market participants on the direction of the S & P 500. Of the 341 respondents, almost half thought the s & p 500 index would rise by more than 10% in the second half of the year and predicted it would fall by more than 10% in the second half of the year.
Apple said on Wednesday that it would close another 30 stores in the United States this week. Recently, there has been a rapid increase in the number of new crown confirmed cases in many places in the United States, and the total number of stores reclosed by Apple in the United States has reached 77.
The company said stores in Alabama, California, Georgia, Idaho, Louisiana, Nevada and Oklahoma will be reclosed tomorrow. Stores in Florida, Mississippi, Texas and Utah closed today. Apple has 271 retail stores in the United States.
"affected by the current epidemic situation in some of the communities we serve, we have temporarily closed stores in these areas," an Apple spokesman said in a statement. We will pay close attention to this situation, take cautious action, and look forward to the return of our team and customers as soon as possible. "
Apple was one of the first companies to close global retail stores in response to the coronavirus pandemic. The company has taken a number of safety measures in its reopened stores, including mandatory masks, temperature testing, roadside pick-up and booking services in some areas.
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