China Fund News Taylor
brothers and sisters, continue to read some overseas news tonight.
JD.com and Chinese concept stocks soared
U.S. stocks opened tonight. The biggest highlight was that JD.com’s stock price soared 18%, driving Chinese concept stocks to rise together.
On the news, JD.com released its fourth quarter and full-year results for 2023. Revenue in the fourth quarter reached 306.1 billion yuan (approximately US$43.1 billion), a year-on-year increase of 3.6%; full-year revenue was 1,084.7 billion yuan (approximately US$152.8 billion) , a year-on-year increase of 3.7%; in 2023, JD Logistics' revenue from external customers increased by 30.8% year-on-year, of which the average revenue of a single customer of the integrated supply chain increased by 15.2% year-on-year.
In addition, in the fourth quarter of 2023, JD.com Group’s net profit attributable to ordinary shareholders of listed companies under non-GAAP was 8.4 billion yuan (approximately 1.2 billion U.S. dollars), reaching 35.2 billion yuan (approximately 5 billion U.S. dollars) for the full year USD), both exceeded market expectations.
html On March 6, JD.com simultaneously announced that the company’s board of directors has approved annual cash dividends with a total dividend of approximately US$1.2 billion, exceeding US$1 billion in 2023. JD.com's board of directors also approved a new share repurchase plan, which will repurchase shares worth no more than US$3 billion in the next 36 months to March 2027 after the existing share repurchase plan expires and becomes effective.U.S. stocks rise Powell's latest statement
The most important thing for U.S. stocks tonight is that Federal Reserve Chairman Powell attended the semi-annual monetary policy report hearings of the House and Senate. Investors hope to find clues about the speed and timing of expected interest rate cuts this year. Powell also took questions and questioning from members of Congress during the hearing.
Powell said that although inflation is still above the Fed's 2% target, it has slowed significantly, and the unemployment rate has not increased significantly while inflation has slowed. As labor market tensions have eased and inflation continues to make progress, risks to achieving the employment and inflation targets have become better balanced.
Even so, the Fed remains highly concerned about inflation risks and is acutely aware that high inflation can cause severe hardship, especially for those least able to afford higher prices for necessities such as food, housing and transportation. The Fed is firmly committed to returning inflation to its 2% goal. Restoring price stability is critical to achieving sustained labor market strength that benefits everyone.
Powell said our policy rates may have peaked in this tightening cycle. If the economy performs broadly as expected, it may be appropriate to begin cutting interest rates at some point this year. However, there is uncertainty about the economic outlook and continued progress towards the 2% inflation target cannot be ensured. Reducing policy restrictions too early or too much could result in a reversal of the progress we have made on inflation and ultimately require tighter policy to get inflation back to 2%. At the same time, reducing policy restrictions too late or too little could unduly weaken economic activity and employment. When considering any changes to the policy rate target range, we will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee anticipates that lowering the policy rate will not be appropriate until there is greater confidence that inflation can sustainably decline toward 2 percent.
Powell said he remains committed to lowering inflation to his 2% target and keeping long-term inflation expectations well anchored. Restoring price stability is critical to maximizing long-term employment and price stability.
Powell said that upcoming data will determine when to start cutting interest rates, hoping to be more confident that inflation will come back; we have some confidence now, but more is needed.
Powell said there was no reason to think the economy was at or at risk of a significant near-term recession. Consider a recession unlikely at this time. To date, our economy has grown at a solid pace and the labor market remains tight and strong. Inflation has come down significantly and these are very attractive scenarios that we hope to continue to see and I think we can achieve a soft landing and we are well on our way to achieving our goals so far.
Powell said that while inflation makes progress, we are using our tools to maintain a strong labor market and healthy economic growth.
After Powell’s speech, US stocks continued to rise! Karl Schamotta, chief market strategist at
copay, said that Powell clearly warned the market not to expect the Fed to turn to interest rate cuts immediately.
ladenburg Phil Blancato, CEO of Thamann Asset Management, said these comments from Powell are in line with our current expectations. He was cautious when talking about the overall health of the U.S. economy. From an inflation perspective, we're not there yet. His comments would once again bolster the argument that the Fed is not yet ready to cut interest rates, meaning the first rate cut is more likely to come in the fall rather than sooner.
"Fed mouthpiece" Nick Timiraos said January's strong employment and inflation data did not change the Fed's expectations that a rate cut later this year would be appropriate, but Fed Chairman Powell said officials wanted more evidence of inflation is continuing to slow down. In prepared remarks to the House Financial Services Committee on Wednesday, Powell said a rate cut was unwarranted until officials "gain greater confidence that inflation is sustainably moving toward the 2% goal." Fed officials are trying to balance two risks: That they ease policy too slowly and the economy collapses under the weight of rising interest rates. Alternatively, they ease monetary policy prematurely, allowing inflation to become entrenched at levels well above their 2% target.
