01. Escaping Recession?

In the first quarter of last year, the U.S. GDP fell by 1.6% quarter-on-quarter, and in the second quarter, it continued to decline by 0.6% quarter-on-quarter, indicating that the U.S. had entered a technical recession.

However, the third quarter saw a strong rebound with a quarter-on-quarter growth of 3.2%, and the latest news indicates that the fourth quarter also experienced quarter-on-quarter growth, with a rate of 2.9%.

It appears that the U.S. has shaken off the cloud of recession, and investors are beginning to anticipate that the U.S. will achieve a soft landing.

The data supporting the improvement in the U.S. economy is not only the GDP figures but also the core PCE price index for the fourth quarter of last year, which rose by 3.9% quarter-on-quarter, marking the lowest level since 2021 and a significant decline from the previous quarter's 4.7%.

At the same time, Canada announced its latest interest rate hike information but also forecasted that it would halt further rate increases in the future, sending a signal to the market that it is leading the way in shifting policy.

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This further strengthens the market's confidence that the Federal Reserve is also about to stop raising interest rates. With inflation having noticeably receded and accelerating downwards, it is believed that the Federal Reserve will pay more attention to various signals that the economy and corporate profits may slow down.

At present, it does seem possible for the U.S. to achieve a soft landing, but continued interest rate hikes could potentially lead the economy into a deep recession.

02. U.S. Stock Market Close

Following the release of the data, the U.S. stock market opened higher and continued to rise, with all three major indices increasing by the time of closing. Even the Dow Jones Industrial Average, which had the smallest increase, rose by 0.6%.The NASDAQ index rose by nearly 1.8%, gaining 200 index points.

The trend of technology stocks was very rapid, with Tesla increasing by 11%, which is the highest among many tech giants.

In addition, Facebook rose by 4.1%, Microsoft by 3.07%, and Amazon and Google both rose by more than 2%, while Apple also increased by 1.5%.

The S&P 500 index has stabilized above 4,000 points.

A batch of bank stocks also rose in sync, including Goldman Sachs up by 1.5%, Bank of America up by 1.35%, and Morgan Chase, Citigroup, Morgan Stanley, and Wells Fargo all also rose.

In addition, the rise in the S&P 500 index was also driven by energy stocks, with many energy stocks rising by about 4%, including ExxonMobil, ConocoPhillips, and Chevron.

Now it seems that the rise in the stock market is not due to the excellent financial data of listed companies, but rather due to the expectation of a shift in the U.S. dollar's monetary policy.

In fact, this is equivalent to a bet, and if the Federal Reserve does not shift as the market wishes, the disappointment may lead to a crazy drop in the U.S. stock market.

03, Economic Hidden Dangers

On the other hand, there are also some points to note in the data released last night.Consumption expenditure in the fourth quarter, however, fell far short of expectations, rising only 2.1% on a quarter-over-quarter basis, below the market forecast of 2.9% and also lower than the 2.3% increase in the third quarter.

As a result, many analysts believe that the data for this quarter is likely to be the best that can be seen in the near term, with the economy slowing down. Particularly, as the main support for U.S. economic growth comes from consumption, but currently, the consumption capacity within the United States is clearly slowing down.

These are also being reflected in the financial reports of listed companies.

Last night, after the market closed, tech giant Intel announced its fourth-quarter financial report, with a loss of $0.16 per share, far worse than expected, and at the same time, operating revenue was also below expectations.

Moreover, the company is also becoming more conservative about the future, currently expecting a significant decrease of 20% to 30% in revenue for the first quarter of this year compared to the fourth quarter of last year.

Under various unfavorable data, in after-hours trading, the stock price of this giant fell by 10%.