US economic slowdown, corporate news from Berkshire Hathaway, Google, Ford, TikTok and other companies
• A softening labor market and a cooling economy are keeping traders upbeat ahead of the Federal Reserve's rate cut in September, sending stocks higher and keeping the dollar under pressure. However, there are still concerns that the economy could miss a soft landing and head into recession.
• The European Central Bank's meeting on Thursday is likely to keep risk appetite in check as traders await comments to gain clarity on how the central bank will act following a widely expected rate cut this week.
• Asian shares rose broadly after data showed U.S. job openings fell more than expected in April to their lowest level in more than three years, leading markets to price a 65% chance of a decline rates in September and 45 basis points of easing of this rate. year.
• US labor market data showed an unexpectedly strong slowdown. JOLTS job openings fell from a revised 8.355 million to 8.059 (expected 8.37). To the lowest level since February 2021.
The jobs and labor turnover survey also showed that 5.6 million people were hired during the month, little changed from the March figure. The labor market update comes ahead of Friday's important May jobs report, which will be the week's main news trigger.
• But in US industry everything is still good. The volume of orders expectedly increased by 0.7% m/m.
• The cost of a Chinese worker in industry has reached the level of Poland and Hungary / About $1300 per month.
• Capital Economics on the S&P 500: The market is in the early stages of a bubble. The S&P 500 could rise 23% to 6,500 in 2025, followed by a painful correction in early 2026. Optimists. Don’t you think that a “painful correction” could happen a year earlier?
• Buffett's Berkshire Hathaway buys about 3% of short-term US government securities at auctions/
• Google secretly collected dozens of types of data about its users for six years - 404media. The publication gained access to a copy of the company's database and found in it tens of thousands of children's voices, deleted browsing histories, license plates, home addresses, as well as emails from third-party Google services and other personal information.
• Japanese companies Toyota, Honda and Mazda lied about the safety of their cars. Toyota and Mazda falsified crash test results required for vehicle certification - Japanese Ministry of Transport. Now Japanese authorities have ordered automakers to stop selling models identified in the falsification report. We are talking about the Corolla Fielder, Axio and Yaris Cross (Toyota), as well as the Roadster RF and Mazda2 (Mazda).
• A 3-5 second ad will appear on Instagram that you cannot skip. Instagram is testing a new type of advertising - first you will need to watch a mandatory advertising video and only then watch the feed.
• TSMC discussed with customers the relocation of factories from Taiwan. Well-known chipmaker TSMC has been discussing with customers the relocation of its factories from Taiwan amid rising tensions with China.
• Intel introduced new Lunar Lake chips for AI laptops. The company has developed a new SoC design that promises 14% higher CPU performance at the same clock speed, 50% better graphics performance and 60% better battery life. The Verge reports this. INTC shares react lower. Investors do not believe in the company's technological success.
• Ford's U.S. sales rose 11.2% in May, driven by hybrids, trucks and even Inbox electric vehicles.
The Maverick was especially popular, with sales up nearly 96% in May to 13,616 trucks. Sales of the Maverick hybrid version rose 111% to 7,687 vehicles. Ford said sales of Maverick pickup trucks and hybrid versions reached record levels in May. F shares fell 1%.
• Oil continues to fall amid weak production data and concerns about supply oversupply.
Oil futures continued to fall on Tuesday as markets continued to digest the latest OPEC+ production decision. Also, weaker-than-expected manufacturing data raised concerns about the health of the US economy. This affected energy stocks - XLE fell
• TikTok failed the “disinformation test” ahead of the EU vote. The international campaign Global Witness created 16 adverts targeting Irish audiences with false information about this week's EU elections and tried to gain approval on three platforms - TikTok, YouTube and X.
TikTok, which is particularly popular among young voters, approved all 16 for publication, YouTube accepted 14, and X filtered all advertising and suspended the group's fake accounts, the Global Witness report said.
• Musk: Tesla will spend $3-4 billion on Nvidia chips in 2024.
Musk has repurposed about 12,000 Nvidia H100 GPUs that Tesla originally supplied to its two other companies, X and xAI. “Tesla had nowhere to send the Nvidia chips to power them, so they would just sit in the warehouse.”
Musk said Tesla's Giga Texas plant is nearly complete and will eventually "place 50,000 H100s for FSD training."
• Novelis is postponing its nearly $1 billion U.S. IPO, citing market conditions.
Novelis is the world's largest aluminum recycler with operations in North America, Europe, Asia and South America. It is a subsidiary of the Indian company Hindalco Industries. Is the stock market trading near all-time highs, but conditions for IPOs are poor? – it looks like we still have a lot of amazing things ahead of us.
• Intel and Apollo struck an $11 billion deal for a chip plant in Ireland. The WSJ wrote about the deal in May.
• HPE shares rise 15% after the report. High demand for AI servers helps.
• CRWD shares rise 7% after the report. The company beat expectations and improved forecasts.
• Shares of PVH (brands Tommy Hilfiger and Calvin Klein) fall 2% after the report. The company beat expectations and improved forecasts.
“While we are still in the early stages of making Calvin Klein and Tommy Hilfiger the most desirable lifestyle brands in the world, we are already generating one of the highest levels of consumer engagement in the history of our brands.”
However, the CFO noted the “continued difficult macroeconomic situation around the world.”
• Electric vehicle manufacturer Fisker defaulted on a short-term loan for $3.5 million. The company has long been on the verge of bankruptcy.
• Massachusetts securities regulator is “investigating” Roaring Kitty.
• BBWI shares fell 13% yesterday. The company reported worse than expected and noted the desire of cosmetics buyers to save money. Interestingly, men's products are the fastest growing in Bath and Body Works' grooming segment.
• IWM is getting weaker and the growth of AI stocks has stopped. Leading stock indices also hovered close to historical highs.
The weakening labor market supported the US bond market, but IWM was not supported this time.
• Quiet voices are increasingly being heard - how justified are the current high stock market multipliers and is there a threat that the Fed will miss the moment when it needs to help the weakening economy.
The voices are still quiet and covered in the optimism of the bulls, who have not seen a real bear market since March 2009 - for 15 years now.
And this will make the future more interesting.
Today
- Reports from Brown-Forman, Campbell Soup, Dollar Tree and Lululemon.
- ADP releases national employment report for May. Private sector employment is expected to rise by 172,500, following a gain of 192,000 in April.
- ISM will publish the index of business activity in the services sector for May. An increase is expected from 49.4 to 50.8.
- GreenPower Motor will present a new, state-of-the-art, all-electric refrigerated truck at Home Delivery World.