Global macro
Before the opening bell on Tuesday, the three major futures indexes fell slightly.
Wells Fargo & Co: The S&P 500 is expected to reach a new high of 5,700 points next year after the election.
According to data from the investment department of Wells Fargo Bank, during the past three US presidential elections and the following year, the US stock market has averaged 41.8% increase. The bank said that although it may be too optimistic to expect US stocks to hit new highs before the November US election, the momentum related to the election is likely to further expand in 2025. In addition, its investment strategy analyst, Jeremy Folsom, predicts that the S&P 500 index will set a historical high of 5,700 points before the end of next year.
Short sellers of the US stock market are on a losing streak, and 'big short' players are facing their darkest moment.
After being hit on all sides, well-known bearish stocks are retreating. Jim Chanos withdrew due to failed financing, and Carson Block's Muddy Waters Capital launched the first one-way long fund. Founder of Citron Research, Andrew Left, referred to them as "endangered species"... According to Goldman Sachs' data,$S&P 500 Index (.SPX.US)$Short positions in typical stocks in China are hovering at their lowest level in over 20 years. According to HFR data, while the overall size of stock hedge funds has grown nearly three times, the assets of short funds have dropped from $7.8 billion in 2008 to $4.6 billion.
As the Fed's interest rate cut bet intensifies, the US dollar has fallen to its lowest level in nearly two months.
US manufacturing activity slowed for the second consecutive month, and construction spending unexpectedly declined, boosting interest rate cut bets from the Fed. On Tuesday, the US dollar against the euro and the British pound hit their lowest levels since April, and the US dollar against the yen hit its lowest level in nearly two weeks. Data showed that the probability of a rate cut in September implied by federal funds futures has increased to about 59.1%. The non-farm payroll data released on Friday will prove to be a key test. Currently, the market has fully priced in the expectation that the Fed will cut interest rates by 25 basis points at its November meeting, and is expected to raise interest rates by 41 basis points by the end of the year.
Under the Red Sea crisis, freight rates have skyrocketed! Maersk raised its profit expectations for the second time in a month.
The global capacity shortage caused by the Red Sea Crisis continues to deteriorate, causing global shipping costs to soar. On Monday local time, the global shipping leader, Maersk (A.P. Moller-Maersk A/S), raised its full-year profit forecast, stating that the congestion of the Red Sea has a greater impact on the global supply line than previously expected, which further pushed up freight rates. Maersk said that it is expected that the pre-interest, tax, depreciation, and amortization (EBITDA) for this year will be between $7 billion and $9 billion, while the previous forecast was between $4 billion and $6 billion. Maersk also raised its free cash flow for the year from -$2 billion to at least $1 billion.
"Stocks, bonds, and foreign exchange three major killings"! Indian stocks closed down 5.74%, the largest drop in four years.
The Indian general election is being counted nervously, and the Bharatiya Janata Party (BJP) led by Modi is temporarily leading. However, early vote counts showed that the party unexpectedly did not win an overwhelming victory, and Indian stocks, exchange rates, and bonds fell. The Indian NIFTY and Indian SENSEX indexes closed down 5.93% and 5.74%, respectively, hitting the largest drop in four years, and both fell by 8% at one point during the day. According to news, the 18th parliamentary election count of the Indian People's House (Lower House) began on the 4th. The final results are expected to be announced on the evening of the 4th or early on the 5th.
Hot news
Growth tech stocks fell sharply in pre-market trading,$Tesla (TSLA.US)$Rising slightly against the market
International oil prices fell, and petroleum stocks fell collectively before the market opened.
$Equinor (EQNR.US)$Fell more than 4% before the market opens,$TotalEnergies (TTE.US)$, $BP PLC (BP.US)$CEO Rene Haas expects that within five years, half of the personal computers (PCs) using Windows will be equipped with chips designed by ARM. Haas said in an interview with Reuters that ARM chips will change the PC chip market dominated by Intel and AMD in the past, and the market share will rise to 50% within five years. Haas revealed that ARM chips were initially produced by$Shell (SHEL.US)$, $Exxon Mobil (XOM.US)$Market concerns about Saudi Arabia's gradual increase in production in the fourth quarter caused international oil prices to fall sharply. Brent oil hit a new low since February 6; US oil hit a new low since February 8.
Intel officially released its Xeon 6 series processor, aiming to catch up with the growth tech industry. CEO Rene Haas expects that within 5 years, half of Windows-operated personal computers(PCs) will be configured with chips designed by ARM, a significant change from the past domination of the PC chip market by Intel and AMD. Haas revealed that ARM chips will be initially produced by$NVIDIA (NVDA.US)$
$Intel (INTC.US)$It displayed the new generation of Xeon data center processors, which used the new naming convention "Xeon 6," and will be launched in batches from now until the first quarter of next year. The Xeon 6 series is divided into the E and P series. Among them, the P series is mainly aimed at computing-intensive and AI workloads in high-performance computing, databases and analysis, artificial intelligence, networks, edge, and infrastructure/storage, with up to 128 performance cores, including 6900P/6700P/6500P/6300P, and so on.
NYSE responds to the Berkshire "freak crash" event: clear all erroneous trades.
Along with UTP exchanges, it was ruled to unwind all erroneous trades that occurred at or below $603,718.30 between 9:50 and 9:51 am Eastern Time. The ruling is reportedly not appealable. Earlier that day, a technical glitch caused about 12 companies to have errors, including Berkshire Hathaway Class A shares, which at one point appeared to have lost nearly 100% of their value, falling to $185.$Berkshire Hathaway-A (BRK.A.US)$Investor joins Robinhood's board with Series C participation as trading app reimagines stock markets.
ARM expects to hold half of the Windows PC market share within 5 years.
UK chip design group.$Arm Holdings (ARM.US)$but may be produced by other companies later.$Qualcomm (QCOM.US)$Production, but may look for other companies to produce in the future.
$Sony Group (6758.JP)$Rose nearly 2% before the market opens, and its semiconductor division will cut spending by 30% in the next three years.
$Sony (SONY.US)$Sony's semiconductor department plans to invest approximately 650 billion Japanese yen (approximately RMB 30.95 billion) in capital expenditures within the next three years until March 2027, a reduction of about 30% compared to the previous three years. Sony also stated that it will build a new factory on a land of 370,000 square meters in Kumamoto from April 2024, and the time for installing chip manufacturing equipment will be determined based on the demand for image sensors.
Not to be outdone, after NVIDIA CEO Huang Renxun announced the latest AI chip iteration schedule on the evening of June 2nd, AMD CEO Su Zifeng also threw out an iteration roadmap during her speech on the morning of June 3rd before the COMPUTEX opened. The company will launch the MI325 X and Ryzen AI300 this year, the MI350 series in 2025, and the MI400 series in 2026.
China concept stocks were mixed before the market opened with Alibaba and jd.com slightly up and Ctrip down more than 4%.
Taiwan Semiconductor fell more than 1% before the market opened with no share buyback plan.
$Taiwan Semiconductor (TSM.US)$The shareholders' meeting was held today, which was also the last time Chairman Liu Deyin presided over the shareholders' meeting. Liu Deyin stated that the use of artificial intelligence has created higher demand for chips and the company is confident in future growth. Taiwan Semiconductor does not want to conduct a share buyback because the company has high capital expenditures but the stock price is not so high. The company is closely cooperating with the government on the issue of water and electricity.
Netease pre-market trading rose 1.4%, institutions are bullish about its potential for new games in the second half of the year.
CICC maintains a "buy" rating.$NetEase (NTES.US)$Maintain a "buy" rating and adjust the target price to HKD 173/USD 111. Bullish on the stable performance of the company's old games and the potential for new games in the second half of the year. Morgan Stanley predicts that new games launched by NetEase from the third quarter will accelerate game growth, and the valuation will be raised from the current level.
Bilibili rose more than 3% pre-market trading and was upgraded to "buy" by UBS, which raised its EPS estimate per share.
Reminder for US Macro Events
(All in Peking Time)
22:00: US April durable goods orders revised (%), US April factory orders (%), US April JOLTs job vacancies (10,000).
01:00 the next day: US June 9 10-year treasury auction - total amount (USD 100 million).
04:30 the next day: US crude oil inventory change from API for the week ending May 31 (10,000 barrels).
Editor/emilysong