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Market Moves Yesterday
S&P 500 @ 5,308.15 ( ⬆️ 1.17%)
Nasdaq Composite @ 16,742.39 ( ⬆️ 1.40%)
Bitcoin @ $65,787.33 ( ⬆️ 2.03%)
Hey Scoopers,
Happy Thursday! Here’s what we’re covering today:
👉 The S&P 500 touches all-time highs
👉 Tariffs drag China’s EV stocks lower
👉 Alphabet drives S&P 500 gains in Q2
So, let’s go 🚀
Market Wrap 📉
The S&P 500 and Nasdaq Composite indices touched new record highs on Wednesday, adding to their strong performance in 2024. The equity averages were boosted by a lighter-than-expected U.S. consumer inflation report.
The consumer price index (CPI) rose 0.3% for the month of April, lower than estimates of 0.4%. The inflation gauge increased 3.4% year-over-year and was in line with expectations. Moreover, retail sales remained flat in April, lower than estimates of a 0.4% jump.
These reports raised hopes for interest rate cuts in the near future. There is now a 75.3% chance that the U.S. central bank would begin easing rates at its September meeting, up from a 65.1% chance recorded earlier this week.
Stocks have been surprisingly hot this year as the S&P 500 index has already surged 11% in 2024.
BMO Capital Markets now expects the S&P 500 index to surge to 5,600 by the end of 2024, up from its earlier forecast of 5,100. It is now the highest target for the S&P 500 on Wall Street and indicates an upside of 6% from current levels.
Trending Stocks 🔥
Meme stocks - GameStop and AMC retreated significantly after a two-day rally as the meme stock frenzy seems to have fizzled out (for now!).
Chubb- The property and casualty insurer gained 8% after Berkshire Hathaway revealed it brought 26 million shares of the Zurich-based company for a stake worth $6.7 billion.
Cisco Systems - Shares popped 5% after the networking giant announced fiscal Q3 results and reported revenue of $12.7 billion with earnings of $0.88 per share, topping estimates of $12.53 billion and $0.82 per share, respectively.
The Tariff War Escalates
The Biden administration announced new tariff rates on $18 billion worth of Chinese imports to protect domestic industries from unfair competition.
The U.S. government will quadruple tariffs on China’s electric vehicles from 25% to 100%, while import taxes on solar cells will double to 50%. Tariffs on steel and aluminum imports will also rise from 7.5% to 25%.
Starting in 2025, tariffs on imported Chinese semiconductors will jump from 25% to 50%, while first-time tariffs will be levied on imports of medical needles, syringes, rubber gloves, and masks.
Biden explained, “China heavily subsidized all these products, pushing Chinese companies to produce far more than the rest of the world can absorb and then dumping the excess products on the markets at unfairly low prices.”
Officials at the White House have raised concerns about China’s subsidies for clean energy manufacturing. These subsidies will help companies overproduce cheaper clean energy products such as solar panels and EVs that far outpace domestic demand.
The surpluses are then dumped in global markets, making it difficult for nascent clean energy companies in other countries to compete.
China’s EV stocks, such as Nio, Byd, and Li Auto, fell on Wednesday following the announcement.
Alphabet Gains Big In Q2
The best-performing Magnificent Seven stock in Q2 is Google and YouTube owner Alphabet, which is up 14.1%. The next top performer is Apple with gains of 10.8%, followed by Nvidia and Amazon at 4.8% and 2.4%, respectively.
These four stocks have outpaced the S&P 500, which is up 2.1% in Q2. On the other hand, Microsoft, Tesla, and Meta are trailing the flagship index in this period.
Utilities is the best-performing sector, having surged 9.9%, followed by Communications Services at 3.9% and Information Technology at 2.8%.
All other eight S&P 500 sectors are lagging the benchmark, led by real estate, which is down over 2%.
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Millennium Management Holds Bitcoin Worth $2 Billion
International hedge fund Millennium Management has revealed it held nearly $2 billion worth of spot Bitcoin exchange-traded funds as of Q1 of 2024, according to a Coin Telegraph report.
The hedge fund held $1.94 billion across five spot Bitcoin ETFs and has invested $844 million in BlackRock’s Bitcoin fund.
It is estimated institutional ownership in spot Bitcoin ETFs has surpassed $5 billion as of Q1 of 2024.
Headlines You Can't Miss!
What can you expect from Walmart’s upcoming earnings?
Palo Alto Networks to acquire IBM’s security assets
Microsoft’s carbon footprint rises 30% due to data center expansion
Netflix’s ad-supported tier has 40 million subscribers
North Korea laundered $147 million via Tornado Cash
Chart of The Day
The median retirement savings for Americans is $87,000, much lower than what’s needed to lead a comfortable life in retirement. A Northwestern Mutual survey reveals the ideal savings target for retirement is $1.46 million.
The median savings for those under age 35 is $18,880, while the amount for those between the ages of 65 and 74 is much higher, at $200,000.
The savings gap suggests that Americans must rely on Social Security benefits to make ends meet once their paychecks stop. Estimates suggest that state and federal governments would need $1.4 trillion for public assistance costs by 2040.
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.