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In the last year, we've had:
10 rate hikes
Record high 9.1% inflation
Unprecedented bank crisis
Despite this, the S&P 500 has erased ALL of the losses since the FED started raising rates. The S&P 500 is now up +20% in the last year and is only 8% away from the all-time high.
This is the most resilient market I have ever seen 🔥
🌏 When President Xi Jinping declared victory over Covid 5 months ago, China looked poised for a sharp recovery.
With growth still struggling, that rebound has yet to materialize.
Now, following a series of interest rate cuts by its central bank this week, Beijing is considering fiscal stimulus measures to help rescue its flailing economy.
On the table are an increase in infrastructure spending, incentives to boost consumption, and a loosening of rules around its property sector to encourage investments.
📊 Shifting focus to the US, yesterday featured a slew of economic data releases.
Regional manufacturing gauges from New York and Philadelphia were mixed but offered signs of optimism.
Broader factory production showed slowing growth, suggesting manufacturers remain cautious amid weak global demand and spending.
The cost of imports fell for the fourth time in five months which bodes well for inflation.
Initial jobless claims were higher than expected but were unchanged from last week’s total and remain at the highest level in 18 months.
🛒 Retail sales, meanwhile, unexpectedly rose 0.3% in May in a sign that consumers are spending their way through uncertainty.
Most categories (10/13) saw an increase over the previous month.
Core retail sales—which exclude gas and autos–rose by 0.4% while the control group—which is used in calculating GDP—increased by 0.2%.
Resilience among consumers poses a challenge for the Fed as it attempts to reign in inflation by cooling the economy.
📈 Shares of Microsoft closed at a new all-time high yesterday.
The stock has risen for 6 straight sessions, marking its longest winning streak since January.
It joins Apple and Nvidia as the third mega-cap tech company to reach new highs this year.
With its 45% YTD performance, Microsoft has added over $800 billion to its market value.
🎉 Mediterranean restaurant chain Cava made its stock market debut yesterday and it did not disappoint.
At one point, the stock was up close to 120%.
Shares nearly doubled their $22 listing price, ending the day at $43.78 and giving the company a market value of $4.9 billion–well above the initial valuation of $2.45 billion.
With the best debut performance since July 2022 (and before that, since June 2021), Cava’s warm reception could help reignite a historically slow IPO market.
🚘 How bullish should investors be following Tesla’s record 13-day winning streak? Depends on who you ask.
According to BofA analysts, Tesla’s share of the US electric vehicle market is poised to fall to 18% by 2026 from 62% in 2022.
Analysts at RBC Capital, on the other hand, have raised their price target to $305 from $212, reflecting a bright future filled with robotaxis, full-self driving tech, and expanding margins.
Retail investors, meanwhile, bought more shares of Tesla than any other company for the second week in a row, and it wasn’t even close.
⛽ At the start of June, the trading price for European gas benchmark TTF was at a 2-year low of €23/MwH.
Today, that price is more than twice as high.
The recent surge comes despite record-high storage levels for this time of year, reflecting renewed fears about supply disruptions and the need to replace Russian supplies which met 40% of the EU’s demand prior to the invasion of Ukraine.
📊 Yesterday’s highlights:
Adobe: $3.91 EPS (vs. $3.79 expected) ✅, $4.82 billion in sales (vs. $4.77B expected) ✅.
Adobe reported record revenue in Q2 with growth across all 3 business segments.
It also issued quarterly and full-year guidance for profits and revenue that exceeded expectations.
👀 What we’re watching today:
Full earnings here.
ECB hikes: The European Central Bank raised interest rates to the highest level in over 2 decades.
Junk fees: President Biden has renewed his fight against hidden junk fees to increase transparency and protect consumers.
Retail throne: Analysts expect online sales to propel Amazon past Walmart as the largest US retailer in 2024.
Auto chatbot: Mercedes-Benz is partnering with Microsoft to roll out an optional beta program that features in-car ChatGPT.
Dr. Copper: Copper prices are rallying on renewed growth prospects from China.
Attractive credit: Relative to the earnings yield on the S&P 500, the yield on BBB credit is at its highest in 15 years.
SEC vs. AI: The SEC is considering implementing new rules to govern the use of AI in wealth management firms.
Happy OpEx day: Around $4.2 trillion of contracts tied to stocks and indexes are set to mature today.
BTC ETF: BlackRock’s iShares has submitted paperwork to the SEC for an ever-elusive spot Bitcoin ETF.
Battle prep: Binance.US is laying off employees to cut costs as it prepares for an expensive legal battle with US regulators.
Another Binance exit: After withdrawing from Cyprus, Binance is now leaving the Netherlands to focus on fewer regulated EU markets.
US vs. SBF: The US government punted 5 charges against Sam Bankman-Fried into 2024.
Dorsey’s wallet: Block (formerly Square) will integrate its Bitkey Bitcoin wallet with Coinbase and Cash App with public beta testing starting in a few weeks.
Check out GritCRYPTO for more.
PGA x LIV: The US Justice Department will investigate PGA Tour’s planned merger with LIV to determine potential antitrust violations.
Book deal: KKR and HarperCollins are among the bidders for Simon & Schuster, which is pursuing a sale for the second time in less than 3 years.
O&G M&A: Patterson-UTI Energy has agreed to acquire NexTier for $1.9 billion in an all-stock deal.
No, thanks: First Quantum Minerals has rejected an informal takeover offer from Barrick Gold.
Domains: Alphabet is selling its Google Comains business to Squarespace for ~$180 million.