Fixed Income Market Overview
U.S. Treasury yields fell on Friday after the Federal Reserve’s preferred inflation data met expectations. The 10-year Treasury yield dropped over 5 basis points to 4.501%, and the 2-year yield fell similarly to 4.877%. The core personal consumption expenditures (PCE) price index rose 0.2% in April and 2.8% year-over-year, slightly above expectations. Despite these figures, inflation remains high, delaying rate cut expectations. The Fed’s next policy meeting is set for June 11-12, with officials needing more evidence of easing inflation before cutting rates. Concurrently, the European Central Bank (ECB) cut its key interest rate to 3.75% from 4%, its first reduction since 2019, due to updated inflation assessments. Despite lingering inflationary pressures, the ECB deemed it appropriate to ease monetary restrictions. ECB staff raised their 2024 inflation forecast to 2.5% from 2.3% and their 2025 forecast to 2.2% from 2%. Markets had anticipated the 25 basis point cut, with one more reduction expected this year.
European stocks close at record highs after European Central Bank cuts interest rates for the first time since 2019.
ASML Has Another 35% Upside After Hitting Record High, BofA Says.
TSMC-backed Vanguard and Dutch firm NXP to build $7.8 billion Singapore wafer plant.
Oil prices gain for second day, traders hope for Fed to ease interest rates in September.
Bernard Arnault names son Frédéric at top of LVMH family holding group.
Major Indicies
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DJIA | 38,886.17 | 78.84 | 0.20%↑ |
| NASDAQ | 19,021.19 | -13.86 | -0.07%↓ |
| SNP 500 | 5,352.96 | -1.07 | -0.02%↓ |
| NIKKEI | 38,703.51 | 213.34 | 0.55%↑ |
| HSI | 18,476.80 | 51.84 | 0.28%↑ |
| VIX | 12.58 | -0.05 | -0.40%↓ |
Bonds
| Name | Yeild | CHG |
|---|---|---|
| US 10-YR | 4.29% | 0.01 |
| US 30-YR | 4.44% | 0.01 |
| US 5-YR | 4.31% | 0.01 |
| JPN 10-YR | 0.97% | -0.04 |
| UK 10-YR | 4.18% | -0.01 |
Futures & Commodities
| Name | Last | Change | %Change |
|---|---|---|---|
| WTI CRUDE | 75.55 | 1.48 | 2.00%↑ |
| NAT GAS | 2.821 | 0.064 | 2.32%↑ |
| GOLD | 2,390.90 | 15.40 | 0.65%↑ |
| SILVER | 31.37 | 1.29 | 4.30%↑ |
| COPPER | 4.678 | 0.072 | 1.56%↑ |
Equity Market Overview
Nvidia
Nvidia surpassed Apple in market cap, becoming the second-most valuable public company behind Microsoft. Nvidia hit a $3 trillion market cap after shares rose over 5%, while Apple’s market cap stood at $2.99 trillion. Nvidia shares have surged over 24% since May, driven by its dominant 80% market share in AI chips for data centers. The company’s data center revenue rose 427% year-over-year to $22.6 billion. Apple shares are up about 5% this year, with recent quarterly sales down 4%. Nvidia’s stock has been more volatile, with a 3,290% increase over five years, and it announced a 10-for-1 stock split in May.
EFG International AG
EFG International AG shares surged by up to 10% amid speculation of a potential takeover by Julius Baer Group Ltd. Inside Paradeplatz website reported that an announcement could come on Friday, causing Julius Baer shares to drop by 6.7%. Both banks declined to comment. Bloomberg previously reported that Julius Baer had engaged in preliminary discussions with EFG. A deal would create a wealth manager with over 500 billion Swiss francs in assets. Analysts are divided: KBW sees financial sense in the deal, while Citigroup highlights potential drawbacks such as unattractive returns and client losses.
Salesforce
Salesforce is opening a 40,000-square-foot AI center in London, aiming to position the UK as a global tech hub. The facility, located in the Blue Fin Building, will support over 300 people and facilitate AI training, upskilling programs, and industry collaboration. Salesforce expects the center to contribute to creating 500,000 AI-related jobs in the UK. This initiative is part of Salesforce’s $4 billion UK investment over five years, announced in 2023. The company has also invested over $200 million in UK startups through Salesforce Ventures. The AI center will officially open on June 18 with a free event for developers. This move aligns with Salesforce’s broader strategy despite recent weaker-than-expected revenue reports and investor concerns about its AI investments’ returns.
