The Dow Jones closed above 40,000 points for the first time, gold and copper hit a new high, silver and nickel exploded, and GME plummeted again

Wall Street Sights

2024-05-18 05:07Posted on the official account of Shanghai Wall Street

The Conference Board's leading economic indicator fell 0.6% month-on-month in April, weaker than expectations and the previous reading of a 0.3% decline. According to some analysts, this is the second consecutive month that the index has fallen, indicating that "US economic growth is facing serious headwinds". Factors such as a deteriorating outlook for business conditions among consumers, weak new orders, and reduced permits to build new homes have all contributed to the decline.

Eurozone inflation rose 2.4% year-on-year in April, unchanged from March, reinforcing market expectations that the ECB would start cutting interest rates as early as June. Some analysts said that inflation in Europe will fall faster than previously estimated this year, and the impact of the Red Sea conflict will be smaller than expected. The European Commission said that inflation will return to the 2% target in the second half of next year, and a number of central bank members praised the process of easing inflation.

Fed Governor and Voting Committee member Bowman reiterated that he would be willing to support interest rate hikes if U.S. inflation cools to a halt or the trend reverses, pushing U.S. Treasury yields to quickly extend to daily highs due to his openness to resuming interest rate hikes.

The Dow Jones hit a new high and closed above 40,000 points for the first time, Google hit a three-day high, Fang Duoduo rose 311%, and Haidilao rose 53% intraday

Before midday, the major indexes except the Dow were hovering between gains and losses, the S&P regained at the end of the session, the Nasdaq was close to recovering all losses, and the Dow, where blue chips converged, extended its gains at the end of the session, closing above 40,000 points for the first time in history, but small-cap stocks turned lower than 2,100 points.

As of the close, the Dow hit a record high, rising 1.2% for the week and rising for five consecutive weeks. The S&P and Nasdaq are both approaching their all-time highs set on Wednesday, rising 1.5% and 2.1%, respectively, for the week, and both winning for the first time since February.

The S&P 500 closed up 6.17 points, or 0.12%, at 5,303.27. The Dow closed up 134.21 points, or 0.34%, at 40,003.59. The Nasdaq closed down 12.35 points, or 0.07%, at 16,685.97.

The Nasdaq 100 edged lower, and the Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of the Nasdaq 100 technology constituents, fell 0.27%, falling for two consecutive days from an all-time high, but rose 2.1% and 3.1% respectively this week.

The Russell 2000 small-cap index fell 0.03%, up 1.7% for the week, and the "fear index" VIX fell 3.5% less than 12, approaching the close of 11.75 on November 27, 2019, down 4.54% for the week.

Enter an image here to illustrate the weekly gains in the U.S. stock index, with the Dow hitting a new high on Friday and closing above 40,000 points for the first time

The industrials sector was the only one to close the week in the red, with technology and financials stocks outperforming

The information technology and real estate sectors led the market this week, rising 3% and 2.5%, respectively. This was followed by the healthcare and communication services sectors, which rose 1.8% and 1.7%, respectively. Consumer discretionary and industrials were the worst performers. However, the technology sector fell 0.5% on Friday.

Morgan Stanley believes that a soft landing for the U.S. economy is still the most likely scenario, but the probability of its occurrence will be reduced from 80% to 50%, and the S&P market is expected to fall by 15% to 4,500 points by the end of the year. Both the bank and BlackRock expect the Fed to start cutting interest rates in September, and it could cut rates three times this year. Barclays warns of potential stagflation and geopolitical risks that could catch investors off guard.

Expectations of interest rate cuts have risen this week, with the market fully pricing in three rate cuts this year and two next year.

Most of the star tech stocks rose. "Metaverse" Meta fell 0.3%, Amazon rose 0.6% and still hovered at the low level of the month, Apple turned to a nearly four-month high, and Microsoft turned 0.2% from a one-month high for two consecutive days. Netflix rose 1.7% to a one-month high. Google A rose more than 1%, rising for five consecutive days and hitting a record closing high for three consecutive days. Tesla rose 1.5%.

Most chip stocks fell, but AMD rose more than 1%, rising for four consecutive days to the highest in a month. The Philadelphia Semiconductor Index opened higher and lower, turning down 0.7% and falling below the 5,000-point mark, falling from a two-month high for two consecutive days, but not far from the all-time high set in early March, and up 3.6% this week. Nvidia fell about 2% and continued to get out of about two months high, but it rose 2.9% this week and rose for four consecutive weeks; Nvidia's double-long ETF fell about 4%; Intel fell 0.6% off a three-week high; Arm fell more than 3%, and after the good financial report, Applied Materials opened 2.5% higher but fell nearly 1%.

AI concept stocks rose and fell. Palantir and C3.ai rose nearly 1%, SoundHound.ai fell 1%, Oracle rose more than 1%, rising for four consecutive days to the highest in nearly six weeks, BigBear.ai fell more than 3%, Supermicro Computer and Snowflake fell nearly 2%, Silicon Valley AI infrastructure hardware unicorn Astera Labs fell 0.7%, Alibaba ADR rose up to more than 4%, continuing yesterday's 7% gain.

On the news side, there are reports that Snowflake is in talks to buy Reka AI, a large language model startup founded by Google and Meta researchers, for more than $1 billion. Nvidia-backed AI cloud supply startup Coreweave raised $7.5 billion from investors including Blackstone, The Carlyle Group and BlackRock to advance AI computing. Apple may plan to launch a significantly thinner and more expensive iPhone next year.

Microsoft plans to make a major adjustment to its video game sales strategy by adding the latest Call of Duty game to its subscription service next month. The UK's antitrust authorities are no longer investigating Microsoft's partnership with French startup Mistral AI, but the EU has asked Microsoft to provide sufficient information about the risks posed by the generative AI capabilities of the Bing search engine by the end of the month.

The Chinese concept stock index outperformed the U.S. stock market, but the late gains narrowed. ETF KWEB rose 0.3%, CQQQ rose 0.2%, and the Nasdaq Golden Dragon China Index (HXC) closed up 0.4% after rising 1.7%, after rising above 7,000 points intraday to an eight-month high since September last year.

Among the popular stocks, JD.com rose nearly 3%, Baidu fell nearly 2%, Pinduoduo and Alibaba rose about 2%; Tencent's ADR fell 0.4%, Bilibili rose 2.5%, NIO rose 0.3%, Li Auto fell more than 1%, and Xpeng Motors, which plans to launch its first flying car in 2026, rose 0.4%. Haidilao's Tehai International (HDL) rose as much as 53% on the first day of its U.S. IPO and closed up 14%. Faraday Future rose 136% before plummeting and triggering a circuit breaker, closing down more than 38%, and still up more than 2,100% this week.

The People's Bank of China issued three real estate financial policies to stabilize the property market, causing Shell US stocks to rise by more than 9% and Fang Duoduo by more than 450% before the market. After the opening, Shell rose 7% and then closed up nearly 2%, rising for seven consecutive years to the highest in 14 months; Fang Duoduo once surged 412% and triggered a circuit breaker, the largest increase since June 2020, and finally closed up 311% to an eight-month high.

Other stocks that have moved more include:

Reddit, the "American post bar" where retail investors are concentrated, closed more than 10% after rising more than 17%, setting the third highest record after its listing in late March, and reached a cooperation agreement with OpenAI, and the content will be introduced into products such as ChatGPT, which can use forum data to train AI models.

The enthusiasm of retail investors to hold the concept of stocks subsided, the game station fell nearly 20%, this week's increase narrowed sharply from 271% to 27%, and plans to issue up to 45 million additional Class A shares, saying that there has been no major change in the financial situation, but the preliminary sales in the first quarter fell and fell short of expectations. AMC Cinemas fell more than 5% on Friday, and the weekly increase narrowed from 308% to 51%.

Cracker Barrel Old Country Store, an American restaurant that specializes in rustic and nostalgic goods, fell more than 14% to a 12-year low since early 2012 and will slash its dividend by 80% to support the transformation plan.

Enterprise technology stack IT company DXC Technology Company closed down 17% after opening 21% lower, hitting a four-year low since September 2020, and despite beating expectations in the fourth quarter of the fiscal year, it has poor earnings and revenue guidance for the next quarter.

Walmart, the largest retailer in the United States, rose more than 1% to an all-time high, and yesterday surged 7% on the back of positive earnings reports, as a component stock to support the Dow's rise. Internet celebrity online brokerage Robinhood rose 12%, and BofA turned bullish and upgraded its rating by two notches to buy.

Chubb Insurance rose 3.6%, hitting a record high for two consecutive days, and rose 8.4% in the last two days, the largest two-day increase since 2020 when the "stock god" Warren Buffett's Berkshire Hathaway disclosed its holdings.

European stocks fell on Friday, with the pan-European Stoxx 600 index falling from a record high for two consecutive days, dragged down by industrial and technology stocks, which ended a nine-day winning streak on Wednesday, but rose 0.4% for the week and rose for two consecutive weeks. Swiss luxury goods group Li Feng rose more than 5%, and its annual sales reached a new high.

Germany's stock index fell 0.4% for the week, off Wednesday's all-time high. The French stock index fell 0.6% for the week, the British stock index fell 0.2% for the week, but the stock indexes of Italy and Spain, which are deeply indebted on the periphery of the eurozone, rose 2% for the week.

European and U.S. Treasury yields moved in a V-shape late this week, rising on Friday and off their one-month lows

The hawkish speech of the Federal Reserve governor extended the yield on the two-year Treasury note, which is more sensitive to monetary policy, to a daily high at midday, rising 4 basis points to 4.83%, returning above 4.80% and recovering losses since Wednesday. The yield on the 10-year base bond rose 5 basis points to 4.42%, rising above the 4.40% mark, recovering more than half of the losses since Wednesday, and the yield on short-term bonds is off a one-and-a-half-month low.

Throughout the week, the two-year Treasury yield fell by 4.4 basis points and the 10-year yield fell by 8.4 basis points, falling for two weeks in the past three weeks. The yield on the 30-year bond fell by 8.5 basis points for the week and fell for three consecutive weeks, falling 22 basis points during the period. Some analysts say this is because leading indicators of the U.S. economy suggest that there is serious headwinds to growth.

U.S. Treasury yields moved in a V-shape this week, off a one-month low on Friday

In recent weeks, Fed officials have been cautious about starting to cut interest rates, saying they are still waiting for more evidence that inflation is slowing. Financial markets generally expect no rate cuts before the end of the summer, with the first rate cut taking place in September and multiple rate cuts this year. Barclays Capital and other Wall Street's largest group of bond bears suggested selling 10-year U.S. Treasury bonds on the upside.

European Treasury yields moved higher on Friday, shaking off a one-month low set on Wednesday and showing a V-shaped trend with U.S. Treasury yields this week after releasing U.S. CPI inflation, essentially erasing losses since Wednesday. The 2-year and 10-year German bond yields on eurozone benchmarks both rose about 6 basis points in late trading. The yield on the 10-year Treasury note rose 5 basis points, falling 4 basis points for the week along with Italian bonds.

U.S. oil rose above $80 for the first time in the month, while Brent oil rose to $84 and rose for the first time in three weeks, and natural gas jumped

Economic indicators in major consumer countries such as the United States and China have strengthened hopes for improvement on the demand side, and international oil prices have expanded their intraday gains:

WTI crude oil futures for June delivery closed up $0.83, or 1.05%, at $80.06 per barrel, the highest since April 30, standing above the $80 integer psychological mark for the first time in the month, up 2.3% for the week and rising for two consecutive weeks.

Brent crude oil futures for July delivery closed up $0.71, or 0.85%, at $83.98 a barrel, the highest since April 30, up 1.4% for the week, the first weekly weekly gain.

U.S. oil rose above $80 for the first time in the month to a two-week high

According to some analysts, China's economic data and stimulus measures, a two-week decline in U.S. commercial oil inventories, and another attack on Russia's oil infrastructure have all helped boost short-term oil prices. The next focus will be on the OPEC+ production meeting on June 1.

The slowdown in US inflation data has strengthened the case for the Fed to start cutting interest rates in the near future, leading to a depreciation of the dollar against other major currencies, which is also good for oil prices. Morgan Stanley also believes that global oil demand will grow faster than historical trends this year.

In addition, tight inventories ahead of the summer demand peak supported natural gas prices. U.S. June natural gas futures rose more than 5% on Friday and rose more than 16% for the week. TTF Dutch natural gas futures, the European benchmark, rose nearly 2% on Friday and rose for four consecutive days and more than 3% for the week.

The U.S. dollar erased intraday gains, falling 0.8% in a single week and hovering at a one-month low, while the yen and the yuan edged lower

DXY, a basket of U.S. dollar indexes against a basket of six major currencies, rose 0.3% to 104.80 during the European session, while U.S. stocks turned lower late and returned to 104.45, close to yesterday's one-month low, down 0.8% for the week and 1.7% in May.

According to some analysts, this is because the market is betting on the Federal Reserve to cut interest rates from September amid signs of cooling inflation and a weak U.S. economy, and may cut interest rates by 47 basis points this year.

The U.S. dollar erased gains since April CPI inflation

The euro and the pound edged higher against the dollar, both hovering at near two-month highs. The Bank of Japan kept its bond purchases unchanged, and the yen edged lower against the dollar to 155.66, off a more than one-week high and maintaining the lowest level since the bursting of Japan's asset bubble in 1990. The offshore renminbi fell 100 pips against the dollar and fell below 7.23 yuan, erasing most of the gains since Wednesday.

Mainstream cryptocurrencies are on the rise. Bitcoin, the largest leader by market capitalization, rose 2% and rose above $66,400 to its highest level in nearly four weeks since April 22. The second-largest Ethereum, rose more than 4% and returned above the $3,000 mark, hitting a two-week high.

Bitcoin rose above $67,000 and returned to a six-week high

Gold futures and New York copper closed at an all-time high, silver hit an 11-year high of $31, and London nickel rose more than 11% in a single week

Gold prices rose for two consecutive weeks and rose nearly 2% for the week as expectations of interest rate cuts by European and American central banks improved, silver surged 11% this week, and platinum, which faces persistent structural supply deficits, rose nearly 9% this week and hit a one-year high.

COMEX June gold futures closed up $31.90, or 1.3%, at $2,417.40 an ounce on Friday, the highest close on record. July silver futures closed up $1.38, or 4.6%, at $31.26 an ounce, the highest close since Feb. 8, 2013.

Gold futures closed at an all-time high, closing above $2,400 for the first time

On Friday, spot silver rose as high as 6.4% to $31.51 an ounce, and silver futures rose as high as 6.3% to $31.77 an ounce, both breaking through $30 an ounce for the first time in more than a decade, and the highest since February 2013 during the day, driving the iShares Silver ETF to rise 6.4% to an 11-year high. In the night session, the main contract of Shanghai silver futures exceeded 8,000 yuan/kg, up more than 5%.

Spot gold rose as much as 1.8% or more than $42, not only rising above the $2,400 integer psychological mark, but also pushing up to $2,420, a one-month intraday high since April 12, when gold hit an all-time high of more than $2,431.

Against the backdrop of safe-haven demand, supply chain disruptions, and strong financial and industrial demand, silver prices have risen faster than gold. Silver is up more than 31% year-to-date, outpacing gold, which is up 17%, making it one of the best-performing major commodities this year.

This week, silver outperformed gold by $30, the best weekly differential performance since August 2020

Industrial base metals in London are rising:

The economic bellwether "Dr. Copper" closed up 2.3% on Friday, standing above the $10,000 integer psychological mark, up 6.6% for the week. COMEX New York copper futures for July delivery closed up 3.6% at $5.05/lb, the highest close on record.

Due to the riots in the world's third-largest nickel producing area affecting production, London nickel rose nearly $1,300 or 6.5% on Friday, rising above the two barriers of $20,000 and $21,000 one after another, up more than 11% for the week.

London aluminum rose 1% and rose above $2,600, up 3.2% for the week. London zinc rose 2.4% and rose above $3,000, up 3.5% for the week. London lead, which fell slightly on Friday, rose 2.8% for the week. Lunxi rose 1.6% to break above $34,000, up 6.7% for the week.

In addition, most of the main domestic futures contracts rose in the night session, with soda ash closing up about 4.8%, LPG up about 2.4%, styrene up about 2.2%, and iron ore up 0.4%. Alumina rose more than 4.2% in night trading, Shanghai nickel rose more than 3.4%, Shanghai silver closed up more than 6%, and Shanghai gold rose 1.6%.

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