Pre-market market movements
1. Before the market on Tuesday, May 30, the three major stock index futures of the US stock market were mixed. At press time, Dow futures were down 0.02%, S&P 500 futures were up 0.56%, and Nasdaq futures were up 1.29%.
2. As of press time, Germany's DAX index rose 0.62%, Britain's FTSE 100 fell 0.45%, France's CAC 40 index fell 0.31%, and the Euro Stoxx 50 index rose 0.41%.
3. As of press time, WTI crude fell 0.89% to $72.02 per barrel. Brent crude fell 1.27 percent to $76.12 a barrel.
Market news
U.S. tech stocks rally? Recession fears are growing, and technology stocks are gaining popularity. The latest Markets Live Pulse survey shows that big tech stocks will continue their rally this year as the risk of a U.S. recession prompts investors to buy stocks that deliver earnings growth during a downturn. Of the 492 market participants surveyed, about 41 percent said the highest returns this year would come from buying high-quality stocks focused on profitability, including big tech stocks like Apple and Microsoft; Also sell stocks that are underperforming in these areas. In the midst of uncertain economic conditions, technology stocks with strong cash flow and good revenue growth prospects are fully attractive.
Many Republicans have openly objected, can the United States successfully raise the debt ceiling? A handful of far-right Republican lawmakers said Monday they would oppose a deal to raise the $31.4 trillion U.S. debt ceiling, a sign that the bipartisan deal could face a difficult passage in Congress before the U.S. runs out of money next week. The crucial first test will come Tuesday, when the House Rules Committee will consider the bill, a necessary first step before the full House vote. While the committee typically maintains close ties with House leadership, McCarthy was forced to include some skeptical conservatives as the price of winning the speaker's seat.
The turmoil over U.S. bond defaults has temporarily subsided, but the flight of deposits in the U.S. banking sector may intensify. Bond traders' focus seems to have shifted from worrying that the U.S. won't raise the debt ceiling to worrying about what impact this will have on currency markets. According to recent estimates, the U.S. Treasury will soon replenish its cash balance by selling more than $1 trillion in bonds by the end of the third quarter, which could suck out a lot of liquidity from financial markets. As the Treasury competes with banks for cash, lenders may see their own short-term financing rates rise, forcing them to raise borrowing costs for businesses and households. It could also further stimulate outflows from banks that have been reluctant to raise deposit rates to money market funds that invest directly in Treasury bills and other high-yielding short-term instruments.
Wharton professors support the "AI boom" that will propel big tech companies to prosperity. Wharton finance professor Jeremy Siegel recently said he is optimistic about the boom of big tech companies driven by the artificial intelligence (AI) boom. While many economists worry that a speculative bubble is forming into an AI investment frenzy, Siegel believes the bubble is not emerging. Siegel said these AI-powered hot stocks helped boost the broader U.S. stock market, the S&P 500, which could be a "big winner in the banking crisis."
The AI boom is nowhere near as good as the Meme craze, and retail investors are still on the sidelines. Vanda Research, a research firm that tracks the flow of retail traders in the United States, said that Nvidia (NVDA. The recent sharp rally in artificial intelligence (AI) stocks such as US) has been driven by institutional investors, while retail investors, who are important participants in the U.S. stock market, have not bought aggressively. "Our internal U.S. stock positions show that retail investors are still on the sidelines despite the recent AI boom," the agency said. Previously, DataTrek Research, a well-known data research firm, said that retail investors have not yet flooded AI stocks and fueled the bubble frenzy as they did during the pandemic, and these AI stocks have more room to rise as retail investors return to the market.
Individual stock news
NVIDIA (NVDA. US) rose more than 4% premarket, with a market capitalization of more than a trillion dollars. Before the U.S. stock market on Tuesday, as of press time, Nvidia rose more than 4% to $405.1, with a total market value of more than $1 trillion, becoming a successor to Alphabet (GOOGL. US), Amazon (AMZN. US), Apple (AAPL. US) and Microsoft (MSFT. US) is the fifth U.S. company to have such a large market cap and the first chipmaker worth $1 trillion.
GOTU. US) Q1 cash income increased 69.4% year-over-year and nearly 13% premarket. According to the financial report, as of March 31, 2023, Gaotu's revenue continued to increase steadily, increasing by 12.3% month-on-month to 710 million yuan, increasing for three consecutive quarters; Cash income was RMB540 million, a significant increase of 69.4% year-on-year; At the same time, the efficiency of customer acquisition increased significantly by 73.8% year-on-year, and all important profit indicators increased significantly year-on-year, and operating profit increased significantly by nearly 3 times year-on-year. Adjusted net profit was RMB134 million, with an adjusted net profit margin of 18.9%, the highest quarterly level since the business transformation in 2022. Looking ahead, management expects revenue guidance for the second quarter of 2023 to be capped at $668 million, representing a year-over-year growth rate of 24.2%, while cash income will grow significantly faster than revenue. In addition, management expects to remain profitable next quarter.
Tiger Brokers (TIGR. US) turned a profit year-on-year in Q1, with 53,000 new account opening customers worldwide. Data show that Tiger International's first-quarter revenue was $66.33 million, up 26.0% year-on-year. Non-GAAP net income attributable to parent companies was $10.33 million, up 128.5% sequentially. Net income attributable to owners was $8 million, compared to a net loss of $5.9 million in the year-ago quarter. In the first quarter, Tiger International's global account opening customers increased by 53,000, up 39.8% from the previous quarter, reaching a total of 2.06 million; Deposit customers increased by 30,000, up 11.2% month-on-month, to a total of 810,000. During the period, the company's total trading volume was US$67 billion, of which the stock trading scale was US$23 billion, and the options and futures contracts traded about 7.89 million. Total client assets exceeded US$16.1 billion, up 15.2% sequentially, with net customer deposits of nearly US$1.2 billion during the quarter. At press time, Tiger Brokers rose more than 10% premarket on Tuesday.
Important economic data and event forecasts
22:00 Beijing time, U.S. Chamber of Commerce Consumer Confidence Index for May
At 01:00 Beijing time the next day, Richmond Fed President Barkin, the 2024 FOMC voting committee, attended a video conference on monetary policy and prospects hosted by the National Association for Business Economics (NABE).
At 03:00 Beijing time the next day, the U.S. House Rules Committee met to discuss the debt ceiling bill
Performance forecast
Wednesday morning: HP (HPQ. US), Agora (API. US), Best Group (BEST. US), Happy Gathering (YY. US), Noah Fortune (NOAH. US)
Wednesday premarket: Qinhuai Data (CD.US), EHang (EH. US)