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Summary
- S&P 500 rose 0.29%, Dow Jones was up 0.58%, and NASDAQ gained 0.40%.
- HSBC to sell its lossmaking French retail bank to US equity research firm Cerberus Capital.
- China to invest US$2.35 bn in local chipmaker SMIC as global chip supplies decline.
US stock markets closed lower on Thursday amid concerns of a supply shortage of key industrial components, including microchip, which has forced some firms to revise their production schedules.
The S&P 500 plunged 1.48% to 3915.46. The Dow Jones Industrial Average fell 0.46% to 32862.30. The NASDAQ Composite Index slumped 3.02% to 13116.17, and the small-cap Russell 2000 fell 2.95% to 2267.59.
The crisis in supplies may impact the sales and performance of companies in the next quarter if the problem persists. The situation has been compounded by several factors, including order backlogs, overcrowded shipping ports, container shortage, and other disruptions, industry experts say.
China’s top chipmaker, Semiconductor Manufacturing International Corp., said on Thursday that it will build a new plant in Shenzhen as a global chip shortage continues to haunt industries. Beijing to invest US$2.35 billion in the project, to be one of China’s key suppliers, as it sets its eyes on competing with the global industry powerhouses and become self-reliant. The chip crisis is forcing many large companies in the US to cut production or postpone their new product launch.
Meanwhile, Apple has hinted at launching its new iPad Pros in April. According to an Apple analyst, the company may also start mass production of another mini model by middle of next month. Both the models said to have improved cameras and processors.
HSBC Holdings to sell its lossmaking retail bank in France to Cerberus Capital, an equity firm based in the US. According to people with knowledge of the matter, it may also sell its US banking network. The move is reportedly part of its plan to cut back operations in Europe and North America and boost its presence in Asia.
Taiwan’s Foxconn Technology Group, which has expressed interest in setting up an EV plant in the US, revealed on Thursday that it has signed an agreement with Nidec Corp., a Japanese motor maker, for the supply of electronic components for making electric vehicles. Foxconn, one of the world’s largest iPhone assemblers, plans to foray into the EV venture in collaboration with Taiwan’s Yulon Group. It also sees opportunities from Apple’s entry into the EV business.
Technology stocks across the board largely plummeted in Thursday’s session as the 10-year Treasury bond yields surged, a day after the Federal Reserve reassured to keep its monetary policy loose. The bank had also reiterated to continue purchasing Treasury securities to ensure its policy takes hold.
Blue-chip stocks, such as Tesla, Apple, Facebook, Amazon, and Google, were trading low from the previous session. Energy, consumer cyclicals, real estate, basic materials, utilities, consumer non-cyclicals, industrials, and healthcare stocks also pulled back.
©Kalkine Group 2021.
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Top Gainers
Top performers on S&P 500 included Hartford Financial Services Group Inc (18.71%), PPL Corp (5.96%), ViacomCBS Inc (4.79%), and Carrier Global Corp (4.19%). On NASDAQ, top performers were Upstart Holdings Inc (89.32%), Jiayin Group Inc (73.62%), Wisekey International Holding AG (64.37%), and Moxian Inc (40.17%). On Dow Jones, UnitedHealth Group Inc (2.80%), JPMorgan Chase & Co (1.65%), 3M Co (1.43%), and Home Depot Inc (1.12%) were among the leaders.
Top Losers
Top laggards on S&P 500 included Enphase Energy Inc (-9.36%), Marathon Oil Corp (-8.40%), Occidental Petroleum Corp (-8.33%), and APA Corp (US) (-8.32%). On NASDAQ, Translate Bio Inc (-30.89%), Liquid Media Group Ltd (-26.33%), Integrated Media Technology Ltd (-22.50%), and Broadway Financial Corp (-20.61%) were the losers. On Dow Jones, Chevron Corp (-3.62%), Apple Inc (-3.39%), Intel Corp (-3.12%), and Boeing Co (-2.86%) were among the laggards.
Image Source: EODHD/Others, NASDAQ 1-Year price chart, March 18, 2021.
Volume Movers
Top volume movers included Apple Inc (29.41mn), Bank of America Corp (15.32mn), Ford Motor Co (13.53mn), ViacomCBS Inc (12.88mn), Microsoft Corp (12.83mn), Intel Corp (11.80mn), Wells Fargo & Co (11.26mn), General Electric Co (11.06mn), American Airlines Group Inc (10.77mn), Advanced Micro Devices Inc (10.06mn), Sundial Growers Inc (36.13mn), Jiayin Group Inc (22.57mn), Neos Therapeutics Inc (15.59mn), Oriental Culture Holding Ltd (14.97mn), ViacomCBS Inc (12.88mn), Cisco Systems Inc (6.27mn), Verizon Communications Inc (5.60mn), and JPMorgan Chase & Co (4.72mn).
Futures & Commodities
Gold futures were up 0.43% to $1,734.45 per ounce, silver prices rose 0.35% to $26.148 per ounce, and copper dropped 1.37% to $ 4.0625.
Brent oil futures were down 0.10% to $62.69 and WTI crude dropped 7.97% to $59.45 per barrel.
Bond Market
The 30-year treasury bond yields were up 0.55% to 2.452, while the 10-year bond yields added 4.20% to 1.710.
US Dollar Futures Index was up 0.44% to 91.840.
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Despite supply woes and volatile sessions in recent weeks, investors do not seem to be worried, given a spurt of good news on the economic front. Stocks have seen sharp swings in the recent past as investors rooted for value stocks across the economic spectrum.
Analysts attributed the stock rotations to investors’ growing confidence in the emerging growth sectors. The rising yields of long-term bonds also reflect their growing optimism, they say.
Meanwhile, the number of jobless claims, which had been declining, rose last week. The Labor Department said on Thursday that the job loss benefits claims increased by 45,000 last week, compared to the figures in the prior week. Economists say the sudden increase may be due to some workers pulling back from work in the lure of enhanced benefits checks.
Fed officials on Wednesday exuded confidence in the current policies, including the stimulus package and the pandemic efforts, to help the economy recover rapidly. They forecast the US economy to grow at its fastest speed since the 1980s.
