Opening: U.S. stocks climbed slightly on Monday This week, the market is focused on CPI inflation data

On the evening of the 13th, Beijing time, U.S. stocks opened slightly higher on Monday. The market will focus on the latest PPI and CPI inflation data this week to further judge the Fed's monetary policy outlook. Morgan Stanley called the U.S. economy "cooling" and expects the Fed to cut interest rates three times this year.

The Dow rose 126.18 points, or 0.32 percent, to 39,639.02, the Nasdaq added 50.10 points, or 0.31 percent, to 16,390.97 and the S&P 500 added 13.06 points, or 0.25 percent, to 5,235.74.

U.S. stocks closed mixed on Friday, with the Dow closing 0.3% higher, its eighth straight session of gains and its fourth straight week of gains. Both the Nasdaq and the S&P 500 posted their third consecutive weekly gains.

The Dow rose 125.08 points, or 0.32 percent, to 39,512.84, the Nasdaq fell 5.40 points, or 0.03 percent, to 16,340.87 and the S&P 500 added 8.60 points, or 0.16 percent, to 5,222.68.

This week, the closely watched producer price index (PPI) and consumer price index (CPI) reports for April will be released in the United States. Investors will further judge the Fed's monetary outlook based on the report.

Despite persistently higher-than-expected inflation data in recent months, traders generally believe that it is largely unlikely that the Fed will resume raising interest rates.

Data released last week showed that the U.S. economy is slowing amid stubbornly high inflation, which poses a challenge to the Fed's policy outlook.

Morgan Stanley believes that the U.S. economy is "cooling" and expects the Fed to cut interest rates three times this year.

The agency's research arm believes that there are signs that the US economy is cooling and that deflation will reappear in the April CPI data and accelerate in the second half of 2024.

"As deflation accelerates from the second half of 2024, inflation data will weaken in the coming months, which should provide the Fed with the confidence it needs to believe that inflation is continuing toward its 2% target," Morgan Stanley Research wrote in a recent note. ”

"We remain bullish on the Fed to cut rates three times this year, but starting in September instead of July, and cutting rates two more times in November and December," the agency said. ”

Against this backdrop, Morgan Stanley writes that it currently favors consumer staple stocks over discretionary stocks.

Morgan Stanley reported: "We believe the U.S. consumer staples sector is in a better position than consumer discretionary stocks. In addition, the recent reversal of the relative earnings revisions of consumer staples companies compared to the consumer discretionary sector suggests that there is potential upside in the latter's relative performance. ”

The April CPI data will be a key indicator of whether the U.S. stock market can remain stable. Despite recent data showing stubbornly high inflation in the US, good earnings results so far have helped the US stock market remain resilient.

The first quarter of the U.S. stock market is coming to an end. As of Friday, 92% of S&P 500 companies had reported earnings, and nearly 80% of them beat Wall Street's forecasts, according to FactSet data.

Barclays analyst Venu Krishna said in a research note: "Earnings expectations may become overly pessimistic ahead of the 1Q24 results. As a result, the earnings season has been generally better than expected, which seems to have catalyzed the improvement in market sentiment. ”

This week, a number of Fed officials will share their latest ideas with the market, including Fed Chair Jerome Powell.

Stocks in focus

According to reports, Tesla's Shanghai energy storage gigafactory construction project has completed the issuance of construction permits. This is Tesla's first energy storage gigafactory project outside of the United States. According to the company's official announcement, the factory plans to start construction in May this year and will achieve mass production in the first quarter of next year. Subsequently, the Shanghai Energy Storage Gigafactory will produce ultra-large commercial energy storage battery Megapacks to help grid operators, utility companies and others store and distribute renewable energy more efficiently. More than 200 Megapacks can form an energy storage power plant that can store 1 million kilowatt-hours of electricity.

According to data released by Mercury Research, AMD's performance in the first quarter of this year was quite good, with shipments in the server market continuing to increase, with a share of 23.6% and revenue growth, with shipments in the desktop terminal market increasing by more than 4% year-on-year and quarter-on-quarter, and a shipment share of 23.9%. Correspondingly, AMD's profit performance in the first quarter earnings report also doubled.

Apple is close to reaching an agreement with OpenAI to use ChatGPT features in iOS 18, the next-generation iPhone operating system, as part of Apple's broader effort to introduce artificial intelligence capabilities to its devices, according to media sources familiar with the matter.

It was also reported that JPMorgan Chase increased its holdings of more than 18 million Apple shares in the first quarter.

Microsoft Corp. said on Sunday (May 12, 2024) that it plans to spend 4 billion euros ($4.3 billion) to build cloud computing and artificial intelligence (AI) infrastructure in France, as well as build a data center in the French city of Mulhouse.

The announcement was made on the eve of the "Choose France" summit, which aims to attract foreign investors to invest in France.

Microsoft said in a statement that it aims to help train 1 million people in France and support 2,500 start-ups by 2027.

Amazon's self-driving car Zoox crashed unexpectedly and suddenly, and the National Highway Traffic Safety Administration (NHTSA) has launched an investigation. The National Highway Traffic Safety Administration's Office of Defective Investigations (ODI) was notified of two accidents involving two Toyota Highlanders equipped with Zoox ADS, and the Zoox vehicle equipped with the Zoox Autonomous Driving System (ADS) suddenly braked unexpectedly, causing a rear-end collision with a motorcyclist following the Zoox vehicle. Both accidents resulted in minor injuries.

There is no clear catalyst for the recent rally, but its recent rally has once again put retail investors in the driver's seat.

Macquarie Group has revised its stock rating on AMC Cinemas, lowering its price target to $3.5 from $4. It is understood that the target price adjustment may be related to the operating conditions and market prospects of AMC Cinemas. Investment banks typically consider factors such as the company's profitability, industry trends, and the macroeconomic environment when adjusting stock price targets.

BlackRock's 13F U.S. stock position filing shows that the institution continued to increase its position in well-known technology stocks in the first quarter: more than 11 million shares of Amazon, more than 7.08 million shares of Microsoft, more than 2.5 million shares of Nvidia, and more than 1.4 million shares of Meta Platforms.

In terms of BlackRock's reduction in the first quarter, Google and Apple were reduced by more than 60,000 shares and more than 1.8 million shares respectively, and the total market value of its Apple holdings fell back to about $170 billion, a decrease of nearly 1% from the previous quarter. The agency also slightly increased its holdings in Tesla and Eli Lilly. At the end of March, its total holdings were $4.3 trillion, down $0.38 trillion from the previous quarter.

JPMorgan Chase's 13F U.S. stock position filing shows that it increased its holdings of more than 18 million Apple shares in the first quarter, accounting for 2.27%; and increased its holdings in star technology stocks such as Microsoft, Nvidia, Meta Platforms, and Google. In addition, Xiaomo also increased his holdings in star stocks such as UBS, Stellantis, and ExxonMobil Oil.

In the first quarter, the United States independently reduced its holdings in Bank of America, Uber, Eli Lilly, etc. JPMorgan Chase & Co.'s total holdings at the end of March were $1.18 trillion, an increase of $0.14 trillion from the previous quarter.

Wells Fargo reduced its holdings in star technology stocks such as Microsoft, Apple, Amazon and Nvidia in the first quarter, with the largest reduction in Amazon, falling by more than 4.6 million shares. However, despite a slight reduction in holdings, the proportion of star technology stocks is still among the highest. In addition, the bank increased its holdings of more than 9 million shares of Starbucks and more than 4.6 million shares of Bank of America. Wells Fargo's total holdings at the end of March were $415 billion, up $32 billion from the previous quarter.

Novavax Pharmaceuticals is in the spotlight. The stock rallied nearly 100% after announcing a multibillion-dollar partnership agreement with Sanofi, the world's leading pharmaceutical giant. According to the agreement, the two parties will jointly commercialize Novavax Pharmaceutical's COVID-19 vaccine and jointly develop a combination vaccine against coronavirus and influenza starting next year.

Arm is said to be developing AI chips and plans to start mass production in the fall of 2025.