Source: Wall Street News Author: Fang Jiayao, Du Yu
Bank stocks dragged the Dow to a new low for the week, while small-cap stocks reached their lowest point in six weeks. However, chip stocks reached a new high, and only Tesla and NVIDIA declined among growth tech stocks, while Apple's market cap returned to $3 trillion, surpassing NVIDIA. Microsoft, Broadcom, Applied Materials, Micron Technology, and CrowdStrike all hit new highs, and Oracle rose 10% after-hours due to its cloud trading with OpenAI and Google. GME rose nearly 23%. The China concept stock index fell by 1.6%, while NIO and Xpeng Motors fell by more than 5%, and KrASIA, which had favorable earnings, fell by 6.5%. The French stock index fell more than 3% in three days, with government financing costs soaring 24 basis points in four days, and US Treasury yields falling more than 5 basis points from their monthly highs. Oil prices rebounded after two consecutive days of gains, and Henry Hub natural gas rose nearly 8% to a six-month high. The US dollar index hit a four-week high, the euro fell for two consecutive days, the yen rose sharply to 157, and Bitcoin briefly fell below $67,000. Spot gold fell below $2,300 intraday to a five-week low before rebounding, while silver fell 2%, and copper, zinc, lead, and nickel hit their lowest level in eight weeks.
On Tuesday, the stock market was mixed, with technology stocks rising across the board and other sectors falling. Thanks to price target upgrades by DA Davidson and Bank of America, among others, to $230 for Apple, the Nasdaq performed well due to a sharp rise in Apple's stock, with analysts predicting that Apple's AI product will stimulate consumer upgrades to iPhones. The analysis pointed out that investors seem to be choosing to take profits from NVIDIA and reallocating funds to Apple.
The decline in the US Treasury yield pushed the US stock market up, with demand for bonds attracting bids across all maturities, especially after strong demand for the 10-year Treasury auction indirectly led to increased demand. Due to political uncertainty, the euro performed poorly in the forex market, while other markets were relatively stable, and investors turned their attention to Wednesday's key risks: the Fed's interest rate decision and CPI data.
Commentators have said that the Fed is expected to keep the federal funds rate at 5.25% to 5.50%, and may make minor adjustments to its policy statement based on May. The market's focus will be on the economic projections, which will be presented in a dot plot. Given the first-quarter inflation report and last week's strong non-farm payroll data, the Fed may raise the median expectation for the federal funds rate in 2024. The famous journalist Nick Timiraos, known as the "new Fed news agency," published an article on Tuesday saying that the latest dot plot will be a new focal point for the market, with most economists and Fed watchers now expecting one or two rate cuts later this year.
The May US CPI report, which is expected to show a slight increase of 0.1%, will be released on the day of the FOMC meeting and may affect the dot plot's expectations. Chairman Powell has said that the Fed can update its forecasts later that day, so CPI data may be included in the Fed's decision-making process. After the interest rate decision, policy statement, and economic projections are released, the market will focus on Chairman Powell's press conference.
Analysis suggests that the May US CPI is expected to rise slightly by 0.1%, slower than the increase in April. The year-on-year increase is expected to remain at 3.4%, while the monthly rate of core CPI is expected to be the same as April's 0.3%. The year-on-year forecast is 3.5%, slightly lower than April's 3.6%.
The S&P 500 and Nasdaq hit new highs, with Apple's stock rising more than 7%, while NVIDIA fell 0.71%
On Tuesday, June 11, the night before the Fed's interest rate decision statement was released, the three major US stock indices opened slightly lower. The Dow maintained its downward trend throughout the day, falling by nearly 1.09%, but the tech-heavy Nasdaq and the S&P 500 Index respectively rose in early and late trading, reaching new intraday highs. The Russell small-cap stock index did not successfully rebound throughout the day, falling as much as 1.26%, while the Nasdaq had the highest increase among major indices.
As of the close, the S&P 500 Large Cap, Nasdaq, and Nasdaq 100 hit new all-time closing highs:
The Dow fell 120.62 points, or 0.31%, to close at 38,747.42. The S&P 500 Index rose 14.53 points, or 0.27%, to close at 5,375.32. The Nasdaq rose 151.02 points, or 0.88%, to close at 17,343.55.
Nasdaq 100 index closed up 135.51 points, or 0.71%, at 19,210.19 points. The Nasdaq technology market value-weighted index (NDXTMC) closed up 1.26% to a historic high of 1,668.7560 points. The Nasdaq biotechnology index closed down 0.02% at 4,512.96 points.
Russell 2000 index closed down 0.36% at 2,024.35 points. The fear index VIX closed up 0.86% at 12.85.
The Philadelphia Semiconductor Index closed up 0.06% at 5,365.38 points. The Philadelphia Stock Exchange's KBW Bank Index closed down 1.96% at 100.09 points. The Dow Jones KBW Regional Bank Index closed down 0.42% at 92.84 points.
Jonathan Krinsky, chief market technician at BTIG, said on Tuesday that although we expected the market to be relatively calm today, 89% of NYSE trading volume is currently concentrated on falling stocks, indicating that risks are being reassessed. We note that market breadth has diverged, and if these leading companies' stocks perform poorly, the entire index may come under pressure. Although these tech giants continue to lead the market, their strong performance may not last.
American economist Harry Dent said that US stocks show signs of a top, and this bubble has been forming for 14 years, much longer than most bubbles in history, which usually last 5 to 6 years before bursting. After the bubble does not decline, depression follows.
However, research firm Wolfe Research said on Tuesday that the market as a whole is still on an upward trend. Investors currently have a "must-win" mentality, which is unlikely to change in the s...
Early in the morning, growth tech stocks were generally down, and most of them rose at the end, with only Tesla and Nvidia down. Among them, Apple closed up 7.26%, the largest single-day increase since November 2022, breaking through the $200 mark and reaching a historic closing high of $207.15, with a market value surpassing Nvidia to $3.18 trillion. Microsoft closed up 1.12%, reaching a near two-week high and a historic high. Meta, a "metaverse" under Zuckerberg, closed up 0.97% to a new two-month high, Amazon closed up 0.09% to a four-week high, Google A closed up 0.92%, Netflix closed up 0.63%, and Tesla performed the worst, down 1.80%.
The chip stocks rose and fell. The Philadelphia Semiconductor Index closed up slightly by 0.06%, refreshing its historical closing high, and the semiconductor industry ETF SOXX also rose slightly by 0.08% to a new high. Nvidia failed to successfully rebound after falling nearly 2.5%, closing down 0.71% at $120.91, with a market value falling below the $3 trillion mark, inferior to Apple. The double long ETF for Nvidia fell 1.5%. AMD closed down 0.86%. TSMC's US stock closed down 1.46%, while Broadcom closed up 1.43%, and Applied Materials, up about 0.79%, and Micron Technology, up about 0.19%, all hit new highs, while Intel closed up 0.03% and Arm closed up 2.87%.
AI concept stocks also rose and fell. Oracle expects first-quarter revenue to grow by 5%-7% and its Q1 adjusted EPS to be $1.31-1.35. Although Oracle closed down 0.5%, its stock soared more than 10% after the US stock market closed.
Reddit rose 3.22%, AeroVironment rose 3.15%, Palantir rose 3.11%, BigBear.ai, Snap, CrowdStrike, LivePerson, BullFrog AI rose at least about 2.6%, Snowflake, Microsoft rose at least more than 1.1%, Meta, Google A, Da Vinci surgical robot, Amazon, Intel rose at most 0.97%, Hui Yu, C3.ai, Cisco, Salesforce, Oracle, Dell Technologies, Nvidia fell by at most 0.71%, Baidu fell more than 1.6%, Astera fell more than 2.3%, SoundHound fell more than 2.5%, Microstrategy investment MSTR fell about 2.8%, Symbotic fell more than 3.6%.
In the ETF, the Generation AI Technology ETF rose 0.33%, the Artificial Intelligence and Big Data Index rose 0.17%, the Robotics and Artificial Intelligence ETF-iShares fell 0.19%, the Nasdaq Artificial Intelligence and Robotics ETF fell 0.28%, and the GlobalX Robotics and Artificial Intelligence ETF fell 0.51%, the global robotics and automation ETF-ROBO fell 0.96%.
At Apple's Worldwide Developers Conference (WWDC), the company released the "AI Everywhere" package. Wall Street companies, including Wedbush Securities, believe that Apple's AI products will stimulate consumer upgrades to the iPhone. DA Davison, Bank of America and other companies have raised Apple's target price to $230. Analyzes pointed out that investors seemed to choose to profit from Nvidia and reconfigure their funds into Apple.
JPMorgan and other investment banks believe that Tesla is unlikely to launch autonomous taxis for several years. Although Tesla will showcase autonomous taxi concepts on August 8 and may launch related apps, this business may not bring substantial revenue for many years. JPMorgan's rating for Tesla's stock is equivalent to sell, with a target price of $115.
If Tesla shareholders vote against Musk's $56 billion compensation plan on Thursday, Musk may carry out his threat to take AI research to other companies, or he may even leave. Analysts warn that if the proposal is rejected, the stock price is expected to come under pressure.
Chinese concept stocks fell. The Nasdaq Golden Dragon China Index fell 1.59% to 6135.01 points.
In the ETF, China ETF-iShares MSCI (MCHI) fell 1.05%, Deutsche Bank Jia Shi CSI 300 Index ETF (ASHR) fell 0.74%, China Internet Index ETF (KWEB) fell 0.62%, Xtrackers Harvest CSI 50 (ASHS) rose 0.07%, China Technology Index ETF (CQQQ) rose 0.46%.
Among the popular stocks, JD.com fell 0.61%, Baidu fell 1.61%, and PDD Holdings fell 1.04%. Ali Baba fell 1.77%, Tencent ADR fell 0.38%. Electric vehicle stocks fell sharply, NIO Inc. fell 5.51%, LI Auto Inc. fell 1.95%, XPeng fell 5.42%, and JiKe fell 6.51%.
GameStop rose more than 22.8%, AMC Entertainment rose 10.83%.
Other stocks with significant changes include:
Madrigal Pharmaceuticals rose to a maximum of 15.93% and closed up 14.56%. The research company Wolfe Research gave a "beat the market" rating on the company's stock, placing high hopes on its liver disease drug Rezdiffra, believing that it will become "the most important product release in the biotechnology industry in 2024".
Paramount’s stock price dropped sharply by 11% at one point because its controlling shareholder failed to reach an agreement with Skydance on the acquisition, and Skydance's acquisition plan seems to have failed.
The stock price of American version of Huabei, Affirm Holdings, rose 11% after it announced that its "buy now, pay later" loan service will be embedded in Apple Pay. According to documents submitted by the company, iPhone and iPad users in the United States will be able to enjoy this new feature later this year.
General Motors' stock price rose more than 2.8% at one point, as the company launched a $6 billion share buyback plan. However, due to slower-than-expected demand, General Motors lowered its sales outlook for electric vehicles in 2024 and expects electric vehicle sales to be between 200,000 and 250,000 this year, lower than the previously expected 300,000. The company will invest more than $800 million in its unmanned driving vehicle unit, Cruise.
By industry, the technology segment rose more than 1.6% against the trend, while the financial sector performed poorly:
The 11 sectors of the S&P 500 index generally fell, and the technology sector rose over 1.6% against the market. Apple led all S&P components. The S&P financial sector fell 1.21%. The energy and optional consumer sectors fell as much as 0.22%, while the telecommunications sector rose 0.53%. The information technology/technology sector continued to reach a new high in closing with a rise of 1.66%.
In all S&P 500 components, Apple and First Solar led the way, with Dow rallies falling 4.33% and NextEra Energy falling 5.5%. Southwest Airlines fell 5.56%, and Paramount Global fell 7.85%.
Major asset class ETFs in the US rose and fell. The soybean fund, American real estate ETF, Dow ETF, Russell 2000 index ETF, emerging markets ETF, Barclays American convertible bond ETF, and euro long respectively fell up to 0.69%, while the USD index, S&P 500 ETF, inflation bond index ETF, gold ETF, and Nasdaq 100 ETF rose up to 0.69%. The US 20+ year Treasury bond ETF rose more than 1%, and agricultural product funds rose more than 1.5%.
US industry ETFs generally fell. The global aviation ETF fell 1.8%, the financial ETF fell more than 1.1%, bank ETFs, regional bank ETFs, energy ETFs, and semiconductor ETFs fell as much as 0.88%, while the network stock index ETF rose 0.28%. The global technology stock index ETF rose 1.36%, and the technology industry ETF rose 1.86%.
Dragged down by political instability in France, European stocks fell across the board. The Eurozone's blue chip stock index fell more than 2% in three days, the French stock index fell more than 1.3% in three days, and the Italy bank index fell more than 4% in three days:
The Pan-European Stoxx 600 index fell 0.93%, down for the third consecutive trading day (cumulative decline of 1.41% during this period), and the 50-day moving average has risen to 512.94 points. The Euro Stoxx 50 index fell 1.02% to 4965.09 points, down 2.05% in three days.The FTSE All-World 300 Index fell 0.90% to 2052.72 points.
The German DAX 30 index fell 0.68% to 18,369.94 points, down 1.52% in the past three trading days.
The French CAC 40 index fell 1.33% to 7,789.21 points, down 3.12% in the past three days.
The FTSE MIB index in Italy fell 1.93% to 33,874.48 points and the FTSE Italy comprehensive stock price bank index fell 3.23% in three days and 4.05% in three days.
The FTSE 100 Index in the UK fell 0.98% to 8,147.81 points, the FTSE 250 Index fell 0.88%, and the FTSE 350 Index fell 0.97%.
The IBEX 35 index in Spain fell 1.60%.
In other stock indices, the OMX Copenhagen 20 index in Denmark fell 0.74%. Among other Eurozone member states (other than Germany, France, and Italy), the Athens Stock Exchange composite index fell 0.69%, the Irish composite index ISEQ fell 1.45%, the Portuguese PSI 20 index fell 1.19%, the Finnish OMX Helsinki index fell 0.66%, and the AEX index in the Netherlands fell 0.69%.
European stocks fell across the board, with AstraZeneca falling 1.78% and LVMH falling 1.30%, while Roche Holdings rose 0.79%, the only component stock to rise. Among the "Eleven Arhats," Zealand Pharmaceutical, a weight-loss drug concept stock, fell 1.82%. BE Semiconductor Industries rose 4.97%, setting a new closing high since March 7. The UK stock market had a rare IPO, with software company Raspberry PI Ltd. rising as much as 42.5% on its London IPO debut.
US Treasury yields fell all day, and Eurozone bond yields fell across the board due to political instability in France.
On the eve of the release of CPI data and the FOMC interest rate decision statement, US Treasury yields were almost all falling on Tuesday, and US bond prices rose across the board. Affected by strong US Treasury auction demand, the 10-year US Treasury bond yield fell by about 6.9 basis points:
At the close, the two-year US Treasury yield, which is sensitive to interest rates, fell throughout the day, down 5.27 basis points to 4.8277%, trading in the range of 4.8804% to 4.8235% during the session. The benchmark 10-year US Treasury yield also fell throughout the day, down 6.89 basis points to 4.3981%, trading in the range of 4.4631% to 4.3942% during the session.
The 20-year US Treasury yield fell 6.32 basis points, and the 30-year US Treasury yield fell 6.40 basis points.
The three-year US Treasury yield fell 8.67 basis points, the five-year US Treasury yield fell 6.90 basis points, and the seven-year US Treasury yield fell 7.33 basis points.
The 3-month Treasury bill/10-year US Treasury yield spread fell 4.328 basis points to -97.894 basis points. The 2/10-year US Treasury yield spread fell 1.237 basis points to -43.169 basis points. The yield on 10-year US Treasury Inflation Protected Securities (TIPS) fell 4.88 basis points to 2.1134%.
After the US Treasury Department released the results of the 10-year Treasury bond issuance at 01:00 Beijing time, there was a significant drop in the bond yield. The yield on the 10-year Treasury note fell from around 4.46% to 4.4197%, hitting a daily low.
As the Federal Reserve policy meeting opened, investors continued to focus on the political situation in France. Eurozone bond yields fell universally, and the yield spread between 10-year French and German bonds touched its highest level since March 2020:
The 10-year German bond yield, which serves as the benchmark for the eurozone, fell 4.8 basis points, ending a three-day rebound trend, trading in the range of 2.687% to 2.616%. The two-year German bond yield fell 6.6 basis points to 3.020%, trading in the range of 3.096% to 3.000%; the 30-year German bond yield fell 2.0 basis points to 2.774%. The 2/10-year German bond yield spread rose 1.734 basis points to -39.979 basis points.
The yield on 10-year French bonds rose 0.2 basis points, rising for the fourth consecutive trading day (with a cumulative increase of 24.1 basis points) to 3.228%, approaching the top of 3.329% reached on November 13, 2023; on October 4 of the same year, the yield rose to 3.597%.
The yield on 10-year Spanish bonds fell 3.2 basis points to 3.411%.
The yield on 10-year Italian bonds fell 0.1 basis points after rising 25.1 basis points in four days, to 4.072%, hitting a high of 4.180% at 19:42 Beijing time.
The yield on 10-year UK bonds fell 5.3 basis points to 4.268%. The two-year UK bond yield fell 6.7 basis points to 4.346%. The 30-year UK bond yield fell 2.5 basis points, and the 50-year UK bond yield fell 2.6 basis points. The 2/10-year UK bond yield spread rose 1.400 basis points to -7.921 basis points.
The yield on 10-year Greek bonds rose 0.6 basis points to 3.778%, approaching the high of 3.865% reached on November 13, 2023, at 19:42 Beijing time.
Analysis shows that according to Tradeweb's data, the yield spread between 10-year French and German bonds reached 67 basis points, the highest level since March 2020, due to the unstable political situation in France and investors' cautious approach to French assets.
The US dollar index rose over 0.1%, while the yen, renminbi, and euro all fell.
The basket of US dollar index DXY, measuring the exchange rate against six major currencies, rose 0.11% to 105.270 points, standing firm above the 105 level and breaking away from the intraday high of 105.459 points.
The Bloomberg dollar index rose 0.17% to 1265.81 points, breaking away from the intraday high of 1267.26 points.
Among Asian currencies, the dollar against the yen rose 0.05% to 157.12, trading in the range of 156.81 to 157.40 during the session. The euro against the dollar fell 0.20%, the pound against the dollar rose 0.08%, and the dollar against the Swiss franc rose 0.10%; among commodity currencies, the Australian dollar against the US dollar fell 0.03%, the New Zealand dollar against the US dollar rose 0.20%, and the US dollar against the Canadian dollar fell 0.02%.
Offshore renminbi (CNH) against the US dollar reported 7.2717 yuan, down 59 points from Monday's New York close, trading in the range of 7.2625-7.2747 yuan during the session.
CME Bitcoin futures BTC main contract reported a price of 67,615.00 US dollars, a 3.23% drop from the New York closing on Monday. CME Ethereum futures DCR main contract reported a price of 3,493.00 US dollars, a 5.15% drop from Monday.
EIA raised its oil demand forecast, and WTI crude oil rose 0.2%, driving Henry Hub natural gas up more than 7% in hot June.
Oil prices continued to rise on Tuesday. WTI July crude oil futures rose $0.16, or 0.20%, to settle at $77.90 per barrel. Brent August crude oil futures rose $0.29, or 0.35%, to settle at $81.92 per barrel.
US WTI crude oil rose the highest by $0.62 or nearly 0.8%, breaking through the 78 US dollar mark, while Brent crude oil rose the highest by $0.73 or 0.89%, returning above the 82 US dollar mark, both hitting new highs in more than a week.
In addition, the night session of the 2407 contract of the Shanghai Futures Exchange crude oil futures rose 0.60%.
Oil prices rose slightly on Tuesday as the US Energy Information Administration (EIA) raised its forecast for oil demand growth this year. The EIA raised its forecast for global crude oil demand growth to 1.1 million barrels per day in 2024, up from 920,000 barrels per day previously expected. The forecast for global crude oil demand growth in 2025 was also raised to 1.5 million barrels per day, up from 1.42 million barrels per day previously expected. In addition, the OPEC monthly report pointed out that although oil consumption in the first quarter was lower than expected, the service and tourism industries will support consumption in the second half of the year and promote the growth of oil demand. Analysts said that this week's rebound may be the result of traders buying on dips.
European natural gas futures rose and fell, with investors focusing on supply issues related to the Wheatstone LNG project in Australia. Meanwhile, Henry Hub natural gas rose more than 7% due to hot June:
In the European market's closing, the TTF Dutch natural gas futures fell 0.70% to 34.170 euros/mWh, up from a daily high of 35.200 euros.
ICE UK natural gas futures fell 0.97% to 80.520 pence/therm, up from a high of 83.500 pence.
However, US natural gas futures rose more than 7.67% to $3.1290 per million British thermal units. NYMEX July gasoline futures closed at $2.4089 per gallon, and NYMEX July heating oil futures closed at $2.4213 per gallon.
Gold rose 0.29%, silver fell 1.8%, London's basic industrial metals fell together, with London Zinc and lead falling by at least 2.2%.
COMEX August gold futures rose 0.29% to $2,333.85 per ounce, breaking through the $2,330 mark. COMEX July silver futures fell 1.8% to $29.335/oz. Among them, New York gold futures were soft in early European trading.
Spot gold rose 0.29%, to $2,317.01 per ounce, with trading ranging from $2,297.84 to $2,319.98 before and after 8 p.m. Beijing time there was a significant increase of more than $10.
Today, the World Gold Council (WGC) said that global gold mining will be difficult to continue to increase production. After a rapid production increase period of about ten years since 2008, global gold production capacity has basically peaked by 2018, and global gold production capacity fell by 1% in 2020; looking ahead, it will be increasingly difficult to explore and find gold reserves in the mining industry, and even if gold mines are found, mining permits, financing and production operations will become increasingly difficult.
Meanwhile, the cooling of gold demand in China has led to a bearish market sentiment. However, David Tait, CEO of the World Gold Council, said that China is just waiting and observing. If the gold price falls to the level of $2,200 per ounce, the country will resume its purchase of gold. StoneX analyst Rhona O'Connell said that China purchased very little gold in April and zero in May, but that doesn't mean they won't start buying again. (Jinshi Data APP)
Some analysts also pointed out that the dollar and gold both strengthened today, which is an unusual phenomenon. We are facing a special period when there is still demand for safe-haven assets.
The rise of the US dollar led to a simultaneous drop in London industrial metals: Copper, known as the 'copper doctor', fell by more than 1.41% to $9,759 per ton, bidding farewell to the psychological threshold of $10,000. COMEX copper futures fell 0.59% to $4.5168 per pound. Zinc fell by about 2.81%. Aluminum fell by about 1.48%. Lead fell by over 2.26%. Nickel fell by $73. Tin fell by $88.
According to the latest report from the London Metal Exchange, London copper inventories continued to climb last week, reaching 125,325 tons, the highest level in over eight months. Data from the Shanghai Futures Exchange also showed that copper inventories rose 4.75% to 336,964 tons in the week of June 7, reaching a new high in over four years. International copper inventories increased by 1,105 tons to 23,266 tons last week. Last week, New York copper inventories continued to decline, with the latest inventory level at 12,840 tons, the lowest level in three and a half months.
According to the latest report from the London Metal Exchange, London copper inventories continued to climb last week, reaching 125,325 tons, the highest level in over eight months. Data from the Shanghai Futures Exchange also showed that copper inventories rose 4.75% to 336,964 tons in the week of June 7, reaching a new high in over four years. International copper inventories increased by 1,105 tons to 23,266 tons last week. Last week, New York copper inventories continued to decline, with the latest inventory level at 12,840 tons, the lowest level in three and a half months.
Editor/Lambor