Morning Reads
- A German Initiative to Keep Workers Employed by Retraining Them
- ECB June Rate Cut ‘Most Likely’ If Outlook Holds, Elderson Says
- Britain Shakes Off Recession as Economy Grows Faster Than Expected
- Biden Set to Impose Tariffs on China EVs, Strategic Sectors
- Why Higher Fed Rates Are Not Totally Off the Table
- Hedge Funds Draw Pension Money to Riskiest Corner of a $1.3 Trillion Credit Market
- UBS Mulls Bonus for Investment Bankers Who Lure Rich Clients
- Ackman Scolded Over DEI Views at Closed-Door Milken Session
- Corporate America Is Sitting Out the Trump-Biden Rematch
- Severe Solar Storm Threatens Power Grids and Navigation Systems
- Did You Make Your Connecting Flight? You May Have A.I. to Thank
- Microsoft’s Hedge Against OpenAI Makes Perfect Sense
- Tech Conference Touched on Everything From AI Fears to a Belching Robot
- The Dangerous and Lucrative Business of Space Clean-Up
- China Auto Sales Fell in April Amid EV Price War
- Does Your EV Hurt, or Help, the Economy?
- Elon Musk Changes Tune on Tesla Superchargers After Mass Firing
- Honda Motor Expects Annual Profit to Fall, Announces Share Buyback
- Novavax Soars on $1.2 Billion Sanofi Vaccine Licensing Deal
- ‘The Caitlin Clark Effect Is Real,’ and It’s Already Changing the WNBA
- Why Your Chocolate Fix Is About to Get More Expensive
Options
PREMIUM
Prepper
Momentum is back in the markets, with major indices like the Dow (DJI), S&P 500 (SP500) and Nasdaq (COMP:IND) all just 1% away from their all-time record highs. The bull run is continuing despite concerns that the Fed might hold rates higher for longer, with recent data tilting expectations toward future easing. Among those are higher-than-estimated jobless claims, rising unemployment, and slowing growth that could force the central bank's hand before it falls behind the curve.
Snapshot: It's not all bad news is good news. Results from earnings season have caused the recent rally to grow legs, while the AI frenzy continues to be featured on corporate earnings calls and in daily headlines. In fact, over 80% of S&P 500 companies have already finished reporting, with around 5% growth in Q1 earnings per share, according to FactSet. That's the largest Y/Y increase since Q2 of 2022 and would handily beat most analyst expectations.
What happened to "Sell in May"? As previously mentioned on Wall Street Breakfast, staying fully invested could "prove safer than trying to time the market in any given year." While seasonal patterns do exist and equities could face some increased risk in the summer months, they still tend to go up over the long term despite additional volatility.
SA commentary: Investing Group Leader Lawrence Fuller, who previously flagged the weak track record of the 'Sell in May and go away' adage, is back with a fresh outlook on the rest of the year. "The bears are looking in the rearview mirror today to predict what may happen tomorrow. I think this is a big mistake, as was selling stocks during the pause to refresh in April. This bull market should march on throughout the remainder of 2024."
Tariff time
The Biden administration is expected to announce new tariffs on Chinese electric vehicles and other strategic sectors, including batteries and solar equipment, on Tuesday. The fresh duties are a result of the White House's multi-year review of the Trump-era Section 301 tariffs that began in 2022. It's not just EVs. Biden last month proposed raising tariffs on Chinese steel and aluminum products to 25%, more than triple the current levy of 7.5%. An investigation into Chinese trade practices in shipbuilding, maritime and logistics may also lead to new tariffs. (26 comments)
AI content
Popular short-form video hosting service TikTok is starting to automatically label artificial intelligence-generated content from other platforms. "We want to make sure people have the ability to understand what is fact and what is fiction," said Adam Presser, head of operations, TikTok. Meta's (META) Facebook and Instagram, as well as Alphabet's (GOOGL) YouTube, already have such labels in place. OpenAI is also working on a tool to let content creators manage how their content is used to train artificial intelligence. (1 comment)
Search competitor
Speaking of OpenAI, the company is likely to unveil its AI-powered search product as soon as Monday, as it attempts to break into a space dominated by Google (GOOGL). The product, which will be added to ChatGPT, will be able to search the web for information and cite sources in its results. Search is a major area of focus for the AI industry, as companies crowd the market with their own chatbots, prompting competition over features. ChatGPT has also been integrated with Microsoft's (MSFT) Bing, while generative AI features have been added to Google. (16 comments)
Today's Markets
In Asia, Japan +0.4%. Hong Kong +2.3%. China flat. India +0.4%.
In Europe, at midday, London +0.8%. Paris +0.7%. Frankfurt +0.6%.
Futures at 7:00, Dow +0.3%. S&P +0.3%. Nasdaq +0.4%. Crude +0.8% to $79.92. Gold +1.8% to $2,383.40. Bitcoin +3.6% to $63,006.
Ten-year Treasury Yield unchanged at 4.46%.
Today's Economic Calendar
9:00 Fed's Bowman Speech
10:00 Consumer Sentiment
10:00 Fed's Logan Speech
10:00 Fed's Kashkari Speech
12:45 PM Fed's Goolsbee Speech
1:00 PM Baker Hughes Rig Count
1:30 PM Fed's Barr Speech
2:00 PM Treasury Statement
Companies reporting earnings today »
What else is happening...
BHP-Anglo American deal sets off alarm bells in Japan's steel industry.
BP (BP) eyes Tesla's (TSLA) supercharging sites for U.S. expansion.
Musk’s Neuralink reports malfunction in first in-human brain implant.
Pride Month: Target (TGT) limits LGBTQ-themed items in stores.
Roblox (RBLX) plummets after cutting full-year bookings forecast.
T-Mobile (TMUS), Verizon (VZ) in talks to split up US Cellular (USM).
Report: Sinclair (SBGI) explores sale of 30% of broadcast stations.
Warner Bros. (WBD) flips to gain as Lord of the Rings set to return.
Norfolk Southern (NSC) CEO keeps job, activists win board seats.
Another investigation: SEC probing Boeing’s (BA) 737 safety claims.