Market news - capital outflow from China, coronavirus returns, Fed rates, Apple, Google, Tesla, Microsoft
The United States suspects China of espionage through submarine cables - WSJ. US government officials have warned telecommunications companies that undersea internet cables across the Pacific Ocean are vulnerable to spying by "Chinese repair ships."
China has imposed sanctions on three more US defense companies. China included the defense and space divisions of Boeing, as well as General Atomics Aeronautical Systems and General Dynamics Land Systems on the list of “unreliable enterprises,” the Chinese Ministry of Commerce reported. They are prohibited from making new investments in China, and their leaders are prohibited from entering the country.
In April, capital outflows from China worsened to the highest level since December 2016. Which underscored the unfavorable conditions for the yuan amid a weak domestic economy and uncertainty over the US Federal Reserve interest rate - Bloomberg.
Coronavirus could return this summer - Financial Times. Strains of COVID-19 from the FLiRT group are now actively spreading in Western countries, which could trigger a surge in incidence in the summer of 2024. Symptoms of FLiRT are the same as for classic corona: fever, cough, nasal congestion, sore throat, loss of taste or smell.
Global tax on billionaires? Janet Yellen says no. The US Treasury Secretary has spoken out against a proposed global tax that supporters say would prevent the rich from moving capital to countries where they can avoid paying the tax - WSJ.
Grayscale CEO Michael Sonnenschein is resigning. The cryptocurrency asset manager is struggling with an outflow of investors from its flagship Bitcoin fund, WSJ.
The German budget in 2025 will receive 21 billion euros less than planned. The government must decide where to save.
According to a survey by Bild and the public opinion institute INSA, out of 1005 respondents:
- 40% consider it necessary to save on supporting Ukraine,
- 38% on aid to developing countries,
- 36% on Bürgergeld unemployment benefits.
Finland and Britain signed a declaration of strategic partnership to counter the Russian threat.
The US warns that cyberattacks on water utilities are becoming more frequent and severe
and more protection measures are needed. The recent attacks are not just carried out by private individuals. Some recent hacks of water utilities involve geopolitical rivals and could disrupt the supply of safe water to homes and businesses.
The threat comes from Russia, Iran and China.
On Monday, two Federal Reserve officials confirmed they believe it would be appropriate to keep rates at current levels. Until there is more evidence that inflation is falling. They became the latest central bank officials to emphasize the stance of raising rates for longer.
Fed Vice Chairman Philip Jefferson and Fed Vice Chairman for Supervision Michael Barr pointed to disappointing first-quarter inflation as a reason for keeping rates at current levels, allowing more time to implement contractionary policies.
And the Fed's Bostic expects only one rate cut this year.
Bear Michael Wislon of Morgan Stanley has given up. He stopped waiting for the US stock market to crash and raised his 12-month forecast for the S&P 500 (second quarter of 2025) from 4,500 to 5,400.
BMO Capital Markets and Deutsche Bank last week raised their end-2024 index targets to 5,600 and 5,500, respectively.
The biggest bear remains JP Morgan's Dubravko Lakos-Bujas, the bank's chief global equity strategist, at 4,200 at the end of the year.
The median of forecasts is 5400.
Blue Origin sent six space tourists into orbit. Jeff Bezos' company has resumed space flights after a nearly two-year hiatus. There were six customers aboard the ship, which launched from a site in West Texas.
Gold jumped to an all-time high. Underpinned by growing optimism that the Fed will begin easing monetary policy this year along with rising geopolitical tensions in the Middle East.
Saudi Arabia's national carrier is ordering more than 100 new Airbus aircraft. Because it is increasing the pace of tourism development.
Google is investing €1 billion to expand its data center in Finland. To boost AI development in Europe - Reuters.
Rumors of a secret meeting between Apple and TSMC: planning to reserve all the power of 2nm chips? There are suspicions that Apple plans to reserve all the production capacity of 2nm chips from TSMC, as it did with 3nm technology. Now the company produces 3nm processors only for Cupertino residents - Apple has reserved 100% of the capacity for 3nm chips for its A17 Pro, M3 and M4, so it is likely that 2nm will be a complete Apple exclusive for the first year or more.
Apple cuts iPhone prices in China. Amid fierce competition with Huawei - Reuters.
But AAPL stock held its ground.
Tesla will continue cutting jobs through June. Workers in a State of Uncertainty - Bloomberg.
Microsoft announced several hardware and software related to consumer devices
at an event at its Redmond, Washington, campus as part of its developer conference. The Windows maker revealed a new version of its Surface Pro tablet and Surface Laptop, which are powered by Qualcomm chips based on Arm's wearable chip technology.
Shares of most Chinese developers continue to decline. Despite government support measures - Reuters.
Google is using the uncertainty surrounding TikTok to boost revenue - Business Insider. Google is trying to push advertisers to spend more by investing in YouTube instead of TikTok in the US.
Reddit (RDDT) will issue an additional 1.93 million shares. RDDT shares fell 2%.
JPM shares fell 4% yesterday. After the CEO's comments about limiting the buyback, he believes JPM stock prices are too high: "We are not going to buy back a large number of shares at these prices." Another Monday negative investor day included comments from Dimon, 68, that he would leave the top sooner than previously thought.
Bloomberg analysts increased the likelihood of ETH ETF approval from 25% to 75%. This sparked a rally in crypto yesterday.
PANW shares fall 9% after the report. The company beat its forecast but lowered its expectations for 2024. Investors are still unhappy with the cybersecurity company's transition to a new business model. Last quarter, Palo Alto lowered its full-year guidance and said it was moving to a platform model to get its customers to use more of its products while it absorbed some of the costs. The day after the report, the stock had its worst day ever, falling more than 28% as analysts cut their estimates and price targets. This was followed by shareholder lawsuits.
ZM shares fall 1% after the report.
Elon Musk's compensation package at Tesla has come under attack from a group of shareholders.
“Shareholders should not pretend that this award has any incentive effect—it does not,” the letter said. “What it does have is a problem of excess, which has been glaringly obvious from the beginning.”
Signatories to Monday's letter include Amalgamated Bank, the Danish pension fund AkademikerPension, Nordea Asset Management and United Church Funds, an investment firm primarily serving churches and ministries of the United Church of Christ, as well as New York City Comptroller Brad Lander.
Microsoft and other Windows PC makers announced new laptops on Monday. Which are initially designed to support artificial intelligence functions. Qualcomm chips will power them all. QCOM shares yesterday rose by 2% to a new record on this generally expected news.
Yesterday the stock market showed growth fatigue. Only semiconductor stocks pulled the market.
Today
IBM (IBM) will host its Think 2024 event. The keynote will focus on scaling businesses with artificial intelligence and hybrid cloud.
Microsoft (MSFT) will host its annual Microsoft Build event for developers in Seattle. The event will focus on generative AI, and AI Explorer is expected to include a set of features that take advantage of next-generation NPU hardware that allows Windows to run AI in the background. Intel (INTC) and ASUS are planning to introduce PCs with AI accelerators.
June futures for WTI oil are expiring. There may be increased volatility in oil.
Fed members will speak: Richmond Federal Reserve Bank President Thomas Barkin, New York Federal Reserve Bank President John Williams and Atlanta Federal Reserve Bank President Raphael Bostic.
The US Federal Trade Commission will meet behind closed doors - some mergers and acquisitions may be announced.