Source: Sina US Stocks On the evening of the 20th Beijing time, the US stocks opened mixed on Thursday, and then the three major indexes rose slightly. Nvidia hit another new high and consolidated its position as the largest market cap company in the US stock market. Initial jobless claims in the United States last week were higher than expected, and real estate and manufacturing indexes were below expectations. Until the manuscript was submitted, the S&P 500 index rose 0.29% to break through 5500 points, the Nasdaq Composite Index rose 0.37%, and the Dow Jones Index rose 0.13%. The US stock market was closed on Wednesday due to the June holiday (Juneteenth). On Tuesday, the S&P 500 index and the Nasdaq both set new historical highs. The US stock market is expected to record gains this week. The S&P 500 index set its 31st new high this year on Tuesday. Due to the continued AI craze and the resilience of economic growth, it is expected to continue to support corporate profits, especially in the technology sector. Nvidia's stock price hit another new high. The AI darling and chip maker surpassed Microsoft last Tuesday and became the world's most valuable company. Against the background of the continued AI craze boosting the stock market, Nvidia's stock price has risen 174% from 2024 to date. As Nvidia consolidates its position as a thriving market leader in the AI theme market, its market value has surpassed that of Apple in early June. "Nvidia is still the most important stock in the world," said Chris Weston, head of Pepperstone research, in a report. However, Weston warned that the overall performance of the index market was poor, and the market participation was mediocre, suggesting that the rise was built on an unstable foundation. "The fact remains that the market is still very bullish on AI-related stocks and large tech stocks, and given the lack of clear immediate risks, the path of least resistance is for stock indices to rise." While consumer spending has shown signs of slowing and hints at potential economic weakness, investors continue to flock to the AI giant. The rise of Nvidia has also boosted its peers. Chip maker Broadcom has surged more than 60% from 2024 to date. Scott Chronert, Citigroup's US stock strategy director, wrote in a report on Tuesday: "We still believe that Wall Street (the S&P 500) is diverging from the corporate sector (the foundation of the US economy), is this strange? There is no doubt that generative AI is currently infiltrating the US stock market environment as a sustained driver of growth." Nevertheless, some commentators have noted that while this doldrums has not yet fully affected the US stock market, which repeatedly sets new highs, the rise lacks breadth beyond the largest tech companies, and this situation may continue to deteriorate. Thomas Fitzpatrick, managing director of R.J. O'Brien and Associates, said, "There's a feeling of AI theme that's very similar to the 2000-2001 US stock style, but as we know, markets stay irrational longer than you stay solvent. But for now, it's hard to stop the speeding train." Sam Stovall, chief investment strategist at CFRA Research, said that due to three major unfavorable factors that will suppress stock prices, the US stock market will see a correction. This Wall Street veteran pointed out that so far this year, the stock market has performed strongly, with the S&P 500 index up 15% from 2024. However, he predicted that the benchmark index would fall 5% due to unfavorable interest rates, inflation, and stock valuations. The inflation rate is declining but still above the Federal Reserve's target of 2%, leading Fed officials to expect only one interest rate cut by year-end. As for Thursday's economic data, the initial claims for unemployment benefits in the United States were almost unchanged last week, and the data for the previous week rose sharply. These data tend to fluctuate before and after holidays and school vacations. Data released by the US Department of Labor on Thursday showed that as of June 15, the number of initial claims for unemployment benefits decreased by 5,000 to 238,000. The number of continued claims for unemployment benefits as of June 8 rose to 1.82 million. In the past year, the number of people applying for unemployment benefits has remained low as the labor market has shown resilience in the face of high prices and high interest rates. The four-week moving average of initial jobless claims rose to 232,750, the highest level since September last year.
After opening slightly down, the three major indexes of US stocks diverged. As of press time, the Dow Jones fell 0.03%, the Nasdaq rose 0.14%, and the S&P 500 index rose 0.34%. The earnings report of Micron and others depressed investors' sentiment. The continuous increase in the number of people applying for unemployment benefits in the United States has reached the highest level since the end of 2021, indicating that it takes longer for job seekers to find work.
Goldman Sachs and JPMorgan and other bank stocks have become the focus. Earlier on Wednesday, the Federal Reserve stated that some of the largest financial companies in the United States can withstand serious economic recession scenarios.
Several of America's largest banks have successfully passed the Federal Reserve's annual stress tests, paving the way for them to increase shareholder dividends, demonstrating the resilience of the banking industry in the face of potential economic downturns.
Although the industry is currently expecting a weak version of the proposed stricter capital rules, the results of the stress tests undoubtedly provide powerful evidence of the soundness of the banks.
In a statement issued on Wednesday, the Federal Reserve 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 US$685 billion, resulting in a larger decline in capital than last year, this result is still within the expected range of the stress test.
Despite the recent sluggish trading activity, the large technology stocks continued to outperform the broader market on Wednesday, reversing the recent downturn trend. Amazon's share price reached a historic high on Wednesday, and its market value broke through US$2 trillion for the first time, becoming the fifth company in the US stock market with a market value exceeding US$2 trillion.
Nevertheless, investors are still considering whether AI trading can continue to maintain market growth in the second half of this year, or whether the market breadth needs to be expanded. According to a survey, US stock strategists currently expect the S&P 500 index to rise 1% higher than its current level by the end of this year.
Brian Levitt, global market strategist at Invesco, said: 'At present, we are in an environment where the US stock market is in line with the Federal Reserve. You are likely to need a grand expectation that 'inflation has been accepted, the Federal Reserve can cut interest rates, and the economy can land softly' to be accepted by this market.'
In terms of economic data on Thursday, the US Department of Labor reported that the number of initial jobless claims for the week ending June 22 dropped to 233,000, lower than expected. The number of continued unemployment insurance applicants rose to the highest level since the end of 2021, indicating that it takes longer for job seekers to find work, which is not a positive sign for the economy.
Analysts said that the number of continued unemployment insurance claimants in the United States last week rose to the highest level since the end of 2021, which is a warning signal that job seekers are taking longer to find work. Data released by the US Department of Labor on Thursday showed that the number of continued unemployment insurance claimants increased to about 1.84 million as of the week of June 15. At the same time, the number of initial jobless claims last week fell to 233,000, including the US Independence Day holiday period.
Jan Hatzius, chief economist at Goldman Sachs, recently stated that the labor market is reaching a potential 'turning point', and further weakening demand for workers may lead to an increase in the unemployment rate.
Wall Street is awaiting the latest inflation data favored by the Federal Reserve. The US May Personal Consumption Expenditure Price Index (PCE) will be released on Friday this week. Investors hope that the report will show that price pressures have eased, thereby consolidating the case for the Fed to cut interest rates later this year.
Focus stocks
Star technology stocks collectively rose, and Salesforce rose more than 2%, and ASML Holding rose nearly 2%. Meta and Netflix rose more than 1%.
Most new energy auto stocks have weakened, with xpeng and Rivian falling nearly 5%, while Faraday Future has risen against the trend by over 16%.
chips manufacturer$Micron Technology (MU.US)$After the earnings report was released, the stock price fell more than 4%. The company's fourth-quarter performance guidance did not meet Wall Street's 'ultra-high expectations', and HBM chip production was limited.
$Faraday Future Intelligent Electric Inc. (FFIE.US)$Up another 15%, soared over 73% in the previous trading day. On the news front, founder Jia Yueting's comments on Volkswagen's investment and cooperation with Rivian Automotive on social media site X were published.
Chip giant Nvidia held its 2024 shareholder meeting on Wednesday. Shareholders approved all 12 director nominees and approved executive compensation plans. At the meeting, Nvidia CEO Huang Renxun introduced the latest business situation and responded to many questions raised by shareholders, elaborating on company strategic investments, business transformations, chip economics, and other content.
According to insiders, SpaceX, a space and satellite company owned by Musk, will sell insider stocks in a tender offer at a price of $112 per share, which is higher than expected and will bring the company's valuation close to $210 billion. It was reported that the company was valued at $180 billion in December last year.
According to reports, AMD is redesigning the Ryzen 7 9700X processor internally and increasing its thermal design power (TDP) from the current official 65W to 120W.
Mustafa Suleyman, the CEO of Microsoft AI, said that the default social contract for many open networks is to allow such use. Since the 1990s, the social contract for network content has been based on the principle of "fair use," which means that anyone can copy, rebuild, or reproduce publicly available content.
Google said on Thursday that, with the help of the fully managed unified AI development platform Vertex AI, the company has made significant progress in model and enterprise platform capabilities. Google Cloud can expand its base capabilities on Vertex AI. In addition, from the next quarter, Vertex AI will also launch new services to enable customers to use professional third-party data to support AI agents.
Semaglutide, known as the "miracle weight-loss drug," has been approved in China, opening the door to the Chinese weight-loss drug market for Novo Nordisk. However, considering the huge demand for weight-loss drugs worldwide, Novo Nordisk has decided to limit early-stage sales of this online celebrity drug in China.
On Thursday local time, Maziar Mike Doustdar, head of Novo Nordisk's international business, said in an interview with the media that the company plans to launch Wegovy (known as Novo and Win in China), but will limit the supply to avoid depleting supplies in other parts of the world.
Rivian, the American electric vehicle start-up, expects to produce 91,000 to 93,000 vehicles in the second quarter and deliver 13,000 to 13,300 in the same period.
Prior to this, German automaker Volkswagen announced on Wednesday that it would invest in Rivian. According to a joint statement released by both parties, Volkswagen's initial investment is about $1 billion, and the total investment is expected to increase to about $5 billion by 2026. The investment plan includes investing about $1 billion each in 2025 and 2026, and then investing another $2 billion in 2026. In addition, the two parties plan to jointly establish a joint venture that focuses on the development of electrification architecture and software technology.
Editor/Lambor