World economy, growing India and China, oil, shares of GameStop, Nvidia, AMD and other companies
• The global economy is sending mixed signals.
-In Europe, industrial improvement. And in the USA there are different data from PMI and ISM.
- France Industrial PMI rose from 45.3 to 46.4 (46.7 expected)
- Germany Industrial PMI rose from 42.5 to 45.4 (as expected)
- US Industrial PMI rose from 50.0 to 51.3 (50.9 expected)
However, the Industrial ISM unexpectedly fell from 49.2 to 48.7 ( expected 49).
• A large oil field has been discovered in the east of South Korea - the country's president, Yun Seok-yeol.
The field could hold about 14 billion barrels. oil and gas. The volume of gas could last Korea for 29 years, and oil for 4 years.
• FT: Chinese companies are refocusing on Vietnam and Mexico amid deteriorating relations with the United States. Vietnam is indeed increasingly moving closer to China. But with Mexico there will be big questions. The US will not go unnoticed by China's attempts to circumvent US sanctions through Mexican-Chinese factories.
• Goods from China may rise in price sharply due to an acute shortage of containers. Due to the conflict in the Red Sea, export routes had to be adjusted, which required the use of more containers.
The cost of transportation has already increased by 15-30% and will continue to grow. This will entail an increase in prices for all Chinese imports.
China sees the upcoming introduction of tariffs on Chinese electric cars by the EU as an attempt by the union to suppress Chinese companies - Bloomberg And it promises to take measures to protect its own interests.
• As Asian stocks posted their biggest gains this year on Monday before a weak ISM US manufacturing report sent yields tumbling, investors could err on the side of caution and reduce exposure rather than increase it. If so, it would mean that the “bad news is bad news” idea is gaining ground: easing financial conditions alone is not enough to lift asset prices; instead, deteriorating macroeconomic conditions leading to lower yields and the dollar are what matter to asset prices.
• By some estimates, a shift in the US economic outlook is already underway. The Atlanta Fed on Monday cut its GDPNow forecast for second-quarter GDP growth to 1.8% from 2.7%. Two weeks ago it was 3.5%, and three weeks ago it was over 4.00%.
• Waiting for rate cuts to last for a very long time. And in truth, expectations for rate cuts haven't changed much recently as inflation remains more resilient than policymakers would like.
• Unexpectedly strong factory activity in China and, to a lesser extent, South Korea and Taiwan also helped. China's "unofficial" Caixin/S&P Global Manufacturing PMI report showed the fastest pace of growth since June 2022, in contrast to Friday's official survey, which showed an unexpected drop in activity. The Caixin survey is believed to be more focused on smaller, export-oriented firms, which may help explain why Asian shares rose so sharply on Monday. However, some optimism may cool on Tuesday.
• Inflation in Turkey rose to 75.45%. This is a new high for 1.5 years.
• Shares of INDA, an exchange-traded fund focusing on Indian equities, rose to a record high on Monday.
Investors are awaiting the results of the country's general elections amid expectations that Prime Minister Narendra Modi will remain in power.
“We believe India is witnessing strong consumption growth,” BofA analysts said. “India is probably at the same stage that China was at 6-7 years ago in terms of a tipping point in discretionary income, leading to ongoing spending on lifestyle improvements.” Indian markets' initial reaction on Monday to weekend exit polls showing Prime Minister Narendra Modi's decisive mandate and third term was overwhelmingly positive - stocks hit all-time highs, the rupee rose and bond yields fell.
• On artificial intelligence, BofA analysts said they see India as the “heartbeat” of the global shift to AI, “given its historical stronghold in coding.”
• The third largest European tour operator FTI went bankrupt. This will affect tens of thousands of vacationers - trips will begin to be canceled from June 4. The FTI Group, which employs about 11 thousand people, found itself in distress during the coronavirus pandemic. At that time, the German government provided the company with about 600 million euros, but now refused to provide new financial assistance.
• European gas prices jumped 13% after disruption in Norway - Bloomberg. Analysts say rising prices indicate continued market unease despite near-record levels of gas storage in storage.
• Microsoft is investing $3.2 billion in cloud technologies and artificial intelligence in Sweden. Microsoft plans to place 20,000 of the latest graphics processors, which speed up computer calculations, at its Swedish data centers in Sandviken, Gavle and Staffanstorp.
• The insurance market is flirting with natural disasters - WSJ. Investors are once again becoming interested in catastrophe risk as the hurricane season is expected to be very active.
• The surge in GameStop (GME) stock took center stage. This has reignited speculation about a return to the 2021-style meme rally. At one point in early trading, the stock soared more than 100% after an influential trader made a big bet in a Reddit post by Keith Gill, aka Roaring Cat. Shares of another meme darling, AMC (AMC), rose 27% in tandem with the move. E*Trade is considering banning Roaring Cat from trading on their platform. GME stock ended up only up 21% and AMC only up 11%. GameStop broke the stock market.
• Shares of Warren Buffett's Series A Berkshire Hathaway and gold miner GOLD fell 99%. The New York Stock Exchange says it is investigating the issue. Investors were not harmed. Only surprise and nerves.
Advanced Micro Devices (AMD) has unveiled its latest artificial intelligence processors. And it detailed its development plan over the next two years, aiming to challenge industry leader Nvidia.
But investors believed more in Nvidia CEO's words about the next generation AI chip - AMD shares fell 2% yesterday, and NVDA rose 5%.
• Coherent shares rose 23%. The optoelectronics company said it has named James Anderson, former CEO of Lattice Semiconductor, as CEO.
• Lattice shares fell 16%.
• Autodesk shares rose 5%. The software company said late Friday it had completed an investigation into its accounting records and determined there would be no restatement of its financial results. The company also reported preliminary first-quarter earnings and sales that were higher than Wall Street expected.
• Paramount shares rose 8%. The Wall Street Journal reported that Skydance Media's revised offer allows shareholders to receive cash at a premium.
• JetBlue shares rose 1% after the airline provided guidance for the second quarter. It said revenue would decline 6.5% to 9.5% year-on-year, down from its previous forecast of a 6.5% to 10.5% drop.
• Best Buy shares rose 2.5% to $87. A Citi analyst twice upgraded the stock to Sell from Buy and raised its price target to $100 from $67. The analyst wrote that the electronics retailer should see increased demand for products with generative artificial intelligence capabilities.
• Boeing shares rose 3.9% after Bloomberg reported Qatar Airways was close to an order for the 777x.
• The European Energy Exchange, which is part of Deutsche Boerse, is seeking to acquire Nasdaq's European energy trading and clearing unit Nasdaq Power. Their platforms are of key importance to users and businesses in the Nordic countries.
• According to GlobalData, the global cloud computing market will reach $1.4 trillion in 2027. And a compound annual growth rate (CAGR) of 17.1% from $639 billion in 2022.
• Spotify (SPOT) shares rose 6% yesterday. The streaming giant has announced another price hike for its US subscription plans.
• Oil prices fell by 3-4% after the OPEC decision and weak data from the ISM. This softens inflationary pressure and helped the US government bond market rise in price by more than 1%.
• The decline in government bond yields caused the US dollar to fall.
• The stock market was trading mixed. NVDA was again in the lead.
Today
- Reports from Bath & Body Works, CrowdStrike, Ferguson, Hewlett Packard and PVH.
- The Bureau of Labor Statistics publishes a study of job vacancies and labor turnover. There were expected to be 8.38 million job openings on the last working day of April, about 100,000 fewer than in March. The number of vacancies is down from a peak of 12.2 million in March 2022, but still well above pre-pandemic levels.
- Beginning of the three-day Jefferies Global Healthcare Conference. Participating companies include Aldeyra Therapeutics, Savara, Agilent and Gilead Sciences.
- Deutsche Bank Global Consumer Conference in Paris, with presentations or informal conversations from Kraft Heinz, Kellanova, Sysco, Procter & Gamble, Starbucks and Philip Morris International.
- Snowflake will host the 2024 Investor Day event.