This week ahead || Jun 17th - Jun 21st 2024
Stocks enter shortened trading week near record highs: What to know this week
Stocks surged last week, fueled by softer-than-expected inflation data that bolstered hopes for interest rate cuts. The Nasdaq Composite rose over 3%, and the S&P 500 climbed nearly 1.5%, both hitting record highs for four consecutive days, while the Dow Jones Industrial Average dipped by 0.7%. This week is expected to be quieter with no major corporate news, focusing on the May retail sales report and updates in manufacturing and services. The May Consumer Price Index showed the lowest core CPI increase since June 2023, supporting expectations for positive Personal Consumption Expenditures data. Economists predict disinflation and a potential Fed interest rate cut later in the year, although concerns remain about economic softening and rising unemployment. Investors will watch Thursday's jobless claims closely. The retail sales report on Tuesday is anticipated to show a 0.3% increase for May. Despite some economic headwinds, the easing inflation is seen as a key driver for the ongoing bull market.
MAGA hat wearers use tech software too: Morning Brief
In recent weeks, notable tech figures in Silicon Valley have publicly shown support for former President Donald Trump, despite his legal troubles and the Biden administration's favorable policies towards the tech and EV industries. David Sacks hosted a lucrative fundraiser for Trump in San Francisco, while Sequoia Capital's Shaun Maguire voiced his support and substantial donation on social media. Elon Musk, who has warmed up to Trump, echoed Maguire's sentiments. This trend appears to be driven by concerns over potential regulatory challenges under a Democratic president, especially with the rapid advancement of AI. Max Levchin, CEO of Affirm, highlighted the tech industry's need to appeal to diverse political views, indicating a strategic move by some to protect their wealth and business interests in an unpredictable political landscape.
China's Wuhan Tianyu says inclusion on US sanctions list may impact forex transactions
China's Wuhan Tianyu Information Industry has criticized its inclusion on the U.S. sanctions list as a "unilateral" action, potentially impacting its foreign exchange settlements. The U.S. Treasury Department expanded sanctions on Wednesday, targeting entities that support Russia's war efforts, including Chinese electronics suppliers. Tianyu, which denies any wrongdoing and insists on adhering to laws and international business practices, plans to seek a "fair and just" resolution through active communication with involved parties. The company noted it has no subsidiaries, branches, assets, or business operations in the U.S. and will take steps to protect its interests.
Street calls of the week: Upgrade for Shopify; downgrades for AMD, Paramount
Morgan Stanley downgraded AMD to Equalweight with a $176 price target, citing concerns about high AI expectations and competition from Nvidia. AMD's stock rose 4.49% despite the downgrade. JPMorgan downgraded Cleveland-Cliffs to Neutral due to rising capex needs and lack of growth projects, causing the stock to drop 3.32%. Wells Fargo downgraded Paramount Global to Underweight with a $9 price target, citing financial challenges and competition, yet the stock gained 0.72%. Baird initiated coverage on Mereo BioPharma at Outperform, highlighting its rare disease portfolio, leading to a 4.18% stock increase. Evercore upgraded Shopify to Outperform with a $75 price target, emphasizing its growth potential and recent stock drop, resulting in a 4.61% gain.