Wall Street’s confidence has taken a hit after losses over the past week with investors fretting over the European and Chinese economies in the aftermath of the Federal Reserve’s new stimulus package.
Traders turned to some profit-taking following a spectacular rally on the back of the US Federal Reserve’s decision to pump US$600 billion into the markets in a bid to boost the US economic recovery.
The week ahead will see a slew of economic indicators that will once again offer investors a glimpse of the health of the US economy, including retail sales, the consumer prices index, housing data and unemployment claims.
“The economy appears to have regained momentum early this quarter, but as the calendar heats up this week, the outlook for growth and inflation should become clearer,” Moody’s Economy.com analysts said in a note.
In the week to Friday, the Dow Jones Industrial Average fell 2.12 percent to 11,192.58, after the previous week’s rally that say markets touch levels last seen in the days preceding the September 2008 collapse of Lehman Brothers.
The broader S&P 500 index gave back 1.79 percent to 1,199.21 points, while the technology-rich NASDAQ composite index declined 2.29 percent to 2,518.21 points.
Trade was little affected by a report on Wednesday that showed new claims for US unemployment aid dropped sharply last week to close at the lowest level of the year, raising some hopes that the distressed labor market was on the mend.
“It has been a week where international news seems to have moved the US stock market,” Gina Martin of Wells Fargo Securities said.
The US stock market was pulled down by intensifying concerns over the eurozone economy as laggards Ireland, Spain, Portugal and Greece struggle to deal with a growing sovereign debt.
“There are a lot of rumors in the market about a package for Ireland coming out of the ECB [European Central Bank] during the weekend, so when we get to Monday we may face a very different climate than we had this week,” Martin said.
Confidence in the global economy was further shaken after data out of China showed a roaring inflation beyond central bank targets, which raised speculation of an interest rate hike as early as this weekend.
A rise in Chinese rates could slow down its economy, which has been the bulwark of the global economic recovery.
“We had a rally due to quantitative easing ... which continued until the announcement. Since then, we had some profit-taking,” Gregori Volokhine of Meeschaert New York said.
“The market turned its attention to other economic aspects that are less encouraging,” he said.
The coming week will also see quarterly earning results from companies including the world’s biggest retailer, Walmart, home construction chain store Home Depot as well as computer maker Dell.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day