Pre-market market trends

1. Pre-market trading on June 27th (Thursday), all three major US stock index futures declined. As of press time, Dow Jones futures fell 0.12%, S&P 500 index futures fell 0.11%, and Nasdaq futures fell 0.13%.

2. As of press time, the German DAX index rose 0.22%, the UK FTSE 100 index fell 0.29%, the French CAC 40 index fell 0.58%, and the EuroStoxx 50 index fell 0.04%.

3. As of press time, WTI crude oil rose 0.51% to $81.31 per barrel. Brent crude oil rose 0.46% to $84.86 per barrel.

Market News

US banks easily passed the stress test, and the shareholder dividend feast is coming soon! Several of the largest US banks have successfully passed the Fed's annual stress test, paving the way for increased shareholder dividends and demonstrating the resilience of the banking industry in the face of potential economic downturns. Although the industry is currently expecting a weakened version of a more stringent capital rule proposal, the results of the stress test undoubtedly provide solid evidence for the bank's soundness. In a statement released on Wednesday, the Fed pointed out that the capital levels of each bank participating in the test exceeded the minimum requirements even during an economic downturn. Although these banks are expected to suffer losses of nearly $685 billion, resulting in a greater decline in capital than last year, the results are still within the expected range of the stress test.

The first debate for the 2024 US Presidential Election is here! On the night of June 27th at 9pm EST, US presidential candidates Trump and Biden will hold the first televised debate for the 2024 election. This 90-minute debate may involve the two candidates discussing details of their economic policies and other issues. Among them, inflation, taxation, tariffs, and government debt have always been topics of discussion among voters and in election campaigns.

BMO raises its forecast: Gold is bottoming and gold and silver will rise by the end of the year! BMO Capital Markets stated that although the gold market may lack bullish catalysts to push gold prices higher, gold prices are establishing a solid support bottom. In the near term, the bank expects the average gold price this year to be about $2,263 per ounce, a 4% increase from the previous average estimate of $2,168 per ounce. Looking ahead to 2025, BMO expects the average gold price to be around $2,200 per ounce, a 5% increase from the previous estimate of $2,100 per ounce. Although gold is expected to maintain a range-bound volatility in the third quarter, BMO expects prices to rise by the end of the year, with an average estimate of $2,350 per ounce in the fourth quarter. Analysts pointed out that changes in central bank demand are changing the investment pattern of precious metals and are a key factor explaining why gold has largely ignored the impact of the Fed's interest rate hikes. BMO is not only bullish on gold, but also raised its forecast for the price of silver. BMO expects the average silver price this year to be $27.30 per ounce, a 7% increase from the initial estimate of $25.60 per ounce. Looking further ahead, the bank expects the average silver price to be $26.30 per ounce next year, a 4% increase from the initial estimate, and $25.30 per ounce in 2026, a 5% increase from the previous estimate.

Long on US long-term bonds! Traders continue to "oppose the Fed". This week, as a group of investors re-adjusted their bets on when the Fed will cut interest rates this year, the largest long-term bond ETF attracted record cash inflows. iShares 20+ Year Treasury Bond ETF (TLT) under BlackRock, with about $54 billion in assets, attracted $2.7 billion of funds on Monday, the largest single-day inflow since its inception in 2002. This brings its funds flow to about $4.4 billion so far this year, despite a loss of nearly 3%. ETF analyst Athanasios Psarofagis said: "It looks like investors are starting to challenge the Fed again. They are betting that the Fed will reduce interest rates -- if they are correct, the price trend will fluctuate violently." He added that mid-year portfolio rebalancing may also play a role.

Individual stock news

Micron Technology (MU.US) Q3 revenue increased by 82%, but the performance expectations did not impress Wall Street. The financial report shows that the total revenue of Micron Technology for the third quarter of fiscal year 2024 was US$6.811 billion, a year-on-year increase of 81.5%, slightly better than the market-expected US$6.661 billion. The Q3 revenue acceleration was mainly driven by the growth of the company's core business DRAM and NAND businesses. The changes in the company's Q3 product shipments were not significant, and price increases were the main factor in performance recovery. The adjusted EPS was $0.62, better than the market expectation of $0.50. In addition, the company expects Q4 revenue to be between $7.4 billion and $7.8 billion, which is in line with the market's average expectation of $7.57 billion. The estimated adjusted EPS is approximately $1.08, slightly higher than the market's average expectation of $1.02. However, due to the market's high expectations for Micron Technology as the expected AI wave will stimulate storage demand, the latest guidance provided by the company is actually somewhat mediocre. At the time of publication, Micron Technology fell nearly 6% in pre-market trading on Thursday.

Novo Nordisk (NVO.US): Will limit the supply of the weight-loss drug Wegovy in China to avoid global supply disruption. Maziar Mike Doustdar, head of Novo Nordisk's international business, said in an interview with the media that the company plans to launch Wegovy (the product approved in China is called Nuoheying) in China soon, but will limit the supply to avoid depleting the supply in other parts of the world.

NVIDIA (NVDA.US) shareholder meeting was uneventful. As the world's leading company in the artificial intelligence chip market, NVIDIA's stock price continued to decline after becoming the company with the highest market capitalization recently. This attracted widespread attention from the market to CEO Huang Renxun's speech. However, the entire shareholder meeting did not seem to provide too much new information that investors expected. At the meeting, investors approved all four proposals put forward by the company. Huang Renxun emphasized the company's new Blackwell platform and the opportunities that the company will gain with the development of artificial intelligence technology.

Levi Strauss & Co. (LEVI.US) Q2 sales fell short of expectations due to cautious consumer sentiment. The financial report shows that Levi Strauss Q2 revenue was US$1.44 billion, a year-on-year increase of 7.5%, lower than market expectations; net profit was US$18 million, and net loss was US$2 million in the same period last year; diluted EPS was US$0.04, and was US$0.00 in the same period last year. The company's CFO Harmit Singh attributed the decline in sales to unfavorable foreign exchange conditions and weak Docker's sales. He said: "People are generally cautious." "The current environment is not necessarily suitable for a large amount of purchasing, and consumers are more cautious." The company still expects EPS to be between US$1.17 and US$1.27 for the full year, and expects full-year net revenue to increase by 1% to 3% year-on-year. At the time of publication, Levi Strauss fell more than 15% in pre-market trading on Thursday.

Suzano (SUZ.US) terminates acquisition plan, International Paper (IP.US) fell more than 14% in pre-market trading. Suzano SA terminated its acquisition of International Paper, which rejected Suzano SA's acquisition proposal and instead supported its own merger plan with another competitor. International Paper stated that Suzano has been unable to allow it to participate in the acquisition seriously, and is unwilling to further raise the offer. Suzano stated: "There has always been a condition for completing this transaction, that is, contact between the two parties must be based on a private, confidential and friendly basis. Since it is not possible to do so, Suzano has decided to terminate negotiations."

UBS Group (UBS.US) restructures its global wealth management division to seek more investment services for wealthy clients. This is the first major move since Rob Karofsky and Iqbal Khan co-managed the bank's global wealth management division, aiming to achieve UBS's long-term goal of providing more investment services to its super-rich client base. According to a memorandum, as part of the restructuring, UBS will create a new department called GWM Solutions, which will integrate all wealth products. The memorandum pointed out that Yves-Alain Sommerhalder, a former Credit Suisse wealth banker, will lead the department; the specific business of the department will include investment management, loans, family and institutional wealth, and alternative investments.

Boeing (BA.US) was punished by the US NTSB for illegally disclosing investigation details. The National Transportation Safety Board (NTSB) of the United States stated on Thursday that it will punish Boeing and submit its behavior to the U.S. Department of Justice because Boeing has disclosed non-public details of the ongoing 737 MAX airborne emergency investigation to the media, speculating on the possible cause of the cabin door falling off the Alaska Air (ALK.US) 737 MAX 9 airliner on January 5. Boeing's move further deepened the tense relationship between the embattled aircraft manufacturer and government agencies. Currently, the company is trying to avoid being criminally charged by the US Department of Justice before the deadline on July 7.

Important economic data and events notice

US initial jobless claims for the week ending on June 22, at 8:30 p.m. Beijing time.

US Q1 real GDP annualized rate final value, at 8:30 p.m. Beijing time.

US May seasonally adjusted pending home sales index month-on-month, at 10:00 p.m. Beijing time.

Performance forecast.

Nike (NKE.US) on Friday morning