The S&P 500 rebounded ahead of the long weekend, rising 0.7% on Friday, while the Nasdaq Composite closed at a new record, driven by a rally in AI shares. In contrast, the blue-chip Dow remained subdued, following a more than 600-point drop the previous day. On the week, the S&P 500 lost 0.3% and the Dow declined 2.3%, snapping a 5-week win streak, while the Nasdaq added 0.7%.  Meantime, the Stoxx 50 index in the Euro Area closed flat on Friday at 5,036, paring morning losses, while booking a 0.6% drop for the week. 

Summary for 27.05.2024 

  • Most Asian equities advanced on Monday, rebounding from last week’s losses, though cautiousness prevailed ahead of forthcoming US inflation and interest rate cues. China’s indices edged higher, supported by improved industrial profits, while Hong Kong’s Hang Seng retreated. Japan’s Nikkei 225 and South Korea’s KOSPI rose, with technology shares driving gains. Australia’s ASX 200 rebounded. 
  • Shares in Europe could waver in muted trade on Monday given the public holidays in the US and UK. 
  • Oil prices inched up this morning, recovering slightly from last week’s losses as traders awaited US inflation cues and an OPEC+ meeting. Brent futures rose to $82.22 a barrel, and WTI crude climbed to $77.85. Concerns over high interest rates impacting demand lingered, while the OPEC+ meeting on 2nd June could provide supply cues. 
  • US durable goods orders rose by 0.7% month-over-month in April, surpassing expectations of a 0.8% decrease. This marked the third consecutive monthly advance, driven by robust demand for transport equipment, computers/electronics, fabricated metal products, machinery, and electrical equipment. Non-defence capital goods orders excluding aircraft also increased by 0.3%, rebounding from March. 
  • China’s industrial profits increased by 4.3% year-on-year to 2,094.69 billion yuan in the first four months of 2024, maintaining the same pace as the previous period. Despite challenges like weak domestic demand, deflation risks, and a property downturn, efforts to sustain recovery persisted. Private sector profits accelerated, while state-owned firm profits declined further. 
  • China has established a new state-backed investment fund, the third phase of its national integrated circuit industry investment fund, with registered capital totalling 344 billion yuan ($47.5 billion). The finance ministry holds the largest stake at 17%, aiming to bolster the country’s semiconductor sector.  
  • The Russell 1000 Index is set to welcome 38 new members, including notable additions like Super Micro Computer and MicroStrategy from the Russell 2000 Index. These companies represent a shift of 28 firms from small-cap to large-cap, with significant boosts observed in the Technology sector. 
  • GameStop announced the sale of 45 million shares, generating nearly $933.4 million, leading to a 12% surge in its share price. The struggling retailer, facing challenges from e-commerce, initiated the sale amid a retail frenzy triggered by the return of “Roaring Kitty” Keith Gill. The proceeds will be used for general corporate purposes. 
  • Eli Lilly doubled its investment in Lebanon, Indiana plant to $9 billion to meet surging demand for weight-loss and diabetes drugs. The expanded facility will boost production of active pharmaceutical ingredients for Zepbound and Mounjaro, addressing shortages expected to persist through the second quarter. 
  • Novo Nordisk‘s obesity drug Wegovy showed a 22% reduction in adverse kidney-related events in overweight and obese individuals, based on a recent analysis. Semaglutide, the drug’s active component, exhibited potential in improving kidney function without increasing acute kidney injury risk, highlighting benefits beyond diabetes and weight loss management. 
  • Wedbush’s research suggests stabilisation in iPhone demand, prompting a price target raise for Apple shares to $275. They anticipate a forthcoming “iPhone 16 supercycle” driven by AI technology integration, foreseeing monetisation opportunities and growth in both services and hardware. Apple’s upcoming AI-focused WWDC event between the 10th and 14th June is expected to lay the groundwork for further Services expansion. 
  • This week, in the US, investors will focus on PCE Price Index, personal income, spending, Fed speeches, GDP growth, corporate profits, consumer confidence, pending home sales, and home prices. Globally, attention is on inflation, GDP, and unemployment rates across various countries, alongside key indicators from Germany, China, and Japan.