Fixed Income Market Overview
U.S. Treasury yields fell after the Federal Reserve noted progress on inflation, following a cool May CPI report. The 10-year Treasury yield dropped 8 basis points to 4.318%, hitting its lowest level since April 1. The 2-year Treasury yield sank over 7 basis points to 4.756%. The Fed kept interest rates unchanged at 5.25%-5.50% and forecasted one rate cut later this year, down from three projected in March. The Fed expressed optimism about inflation meeting its 2% goal. May’s CPI was flat month-over-month and up 3.3% year-over-year, below expectations of 0.1% and 3.4%, respectively. Core CPI also showed a slightly higher increase but remained below expectations.
Revolut moves global HQ to heart of London’s financial district as it awaits UK bank license.
Wise shares plunge 10% after fintech firm projects slower growth this year.
Stellantis plans to grow Jeep sales 50% by 2027.
Amazon adds $230 million in cloud credits to AI startups.
Oil prices hold firm, on pace for weekly gain, as inflation appears to ease in U.S.
Major Indicies
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DJIA | 38,647.10 | -65.11 | -0.17%↓ |
| NASDAQ | 19,576.92 | 111.74 | 0.57%↑ |
| S&P 500 | 5,433.74 | 12.71 | 0.23%↑ |
| NIKKEI | 38,720.47 | -156.24 | -0.40%↓ |
| HSI | 18,112.63 | 174.79 | 0.97%↑ |
| VIX | 11.94 | -0.10 | -0.83%↓ |
Bonds
| Name | Yeild | CHG |
|---|---|---|
| US 10-YR | 4.25% | -0.07 |
| US 30-YR | 4.40% | -0.08 |
| US 5-YR | 4.25% | -0.07 |
| JPN 10-YR | 0.97% | -0.02 |
| UK 10-YR | 4.13% | 0.00 |
Futures & Commodities
| Name | Last | Change | %Change |
|---|---|---|---|
| WTI CRUDE | 78.62 | 0.12 | 0.15%↑ |
| NAT GAS | 2.959 | -0.086 | -2.82%↓ |
| GOLD | 2,318.00 | -36.80 | -1.56%↓ |
| SILVER | 29.07 | -1.20 | -3.97%↓ |
| COPPER | 4.482 | -0.086 | -1.87%↓ |
Equity Market Overview
Broadcom
Broadcom’s shares soared 15% on Thursday, driven by a strong annual forecast that underscored the surging demand for AI-focused technology chips, and further buoyed by the announcement of a 10-for-1 stock split. The rising adoption of generative AI has significantly boosted demand for Broadcom’s chips and networking tools. With shares having risen 76% over the past year, closing at $1495.5 on Wednesday, Broadcom joins Nvidia in making its stock more accessible. Morningstar analysts affirm Broadcom’s advantageous position in the AI investment landscape, bolstered by its acquisition of VMware, which added $2.7 billion to Q2 revenue. Paul Marino of GraniteShares emphasized the necessity of holding Broadcom stock for a well-rounded portfolio.
Tesla
Tesla shares rose approximately 3% following Elon Musk’s announcement that shareholders are likely to approve his contentious $56 billion pay package and a proposal to move the company’s incorporation to Texas. Voting on these resolutions, which concludes at Tesla’s annual meeting, indicates strong support, although the pay plan may still face legal challenges. Critics argue that Musk’s compensation is excessive and that his focus is diluted by other ventures, while supporters assert that Musk’s leadership is crucial to Tesla’s success. The second resolution, to shift incorporation from Delaware to Texas, follows a favorable response on Musk’s social media poll. Prominent investors, including Ron Baron, back the compensation package, emphasizing Musk’s integral role in Tesla’s future, though major investors like Vanguard and BlackRock have not disclosed their voting positions.
Chinese EV shares
Shares of Chinese electric vehicle (EV) makers surged following the European Union’s announcement of additional tariffs of up to 38% on Chinese EVs. BYD, the top gainer on the Hang Seng Index, saw an 8% rise, while Geely, Nio, and Li Auto also experienced increases, although SAIC declined by 1.5%. Analysts considered the tariffs relatively moderate compared to recent U.S. hikes, with EU duties aimed at addressing alleged unfair subsidization by Chinese EV makers. The tariffs are provisional, pending further discussions, and China has expressed strong dissatisfaction, calling the move protectionist and potentially escalating trade tensions. The EU’s actions highlight the strategic need for Chinese EV manufacturers to establish production facilities in Europe to mitigate tariff impacts and support long-term growth.
