On Wednesday, US equities ended a choppy session slightly higher, with the S&P 500 and Nasdaq 100 up 0.1% and 0.5%, respectively, and the Dow gaining 15 points. Energy and financial sectors lagged, while consumer discretionary shares outperformed. Amazon and Tesla rose 3.9% and 4.8%, respectively. European equities closed lower, with the Eurozone’s Stoxx 50 down 0.4%, driven by US tech share volatility, monetary policy concerns, and upcoming French elections, with significant declines in chemicals, auto giants, and Airbus.

Summary for 27.06.2024

Asian equities fell, driven by tech weakness following Micron's underwhelming guidance. Japan’s Nikkei 225, South Korea’s KOSPI, and Hong Kong’s Hang Seng declined, alongside Chinese shares hit by weak industrial profits data. Concerns over China's slowing growth and potential trade war with the West further soured sentiment.

European and US equity futures fell on Thursday as investors weighed technology shares trajectories and awaited key US inflation data.

Oil prices fell in early Asian trade on Thursday due to a surprise build in US stockpiles, fuelling demand concerns. However, fears of potential supply disruptions from escalating tensions between Israel and Hezbollah capped further declines. Both Brent and WTI benchmarks had settled slightly higher on Wednesday.

China's industrial profits rose 3.4% year-on-year in the first five months of 2024, down from 4.3% previously, amid a fragile economic recovery. Profits increased in sectors like non-ferrous metals and tech but fell in non-metallic minerals and coal mining. May's profit growth slowed to 0.7% from April's 4.0%.

The Federal Reserve's latest stress tests confirm that the largest US banks are resilient against severe economic scenarios, projecting they could withstand over $685 billion in losses while maintaining adequate capital ratios. This allows banks to resume dividends and announce share buybacks, reflecting confidence in their financial health.

Micron Technology exceeded third-quarter revenue expectations due to strong demand for its memory chips, particularly in AI systems. However, its fourth-quarter revenue forecast, although in line with estimates, disappointed investors, leading to an 8% drop in its shares after hours and impacting related chip shares like Nvidia, AMD, and Intel.

Jefferies Financial exceeded second-quarter profit expectations driven by robust investment banking revenues, reflecting a surge in mergers and acquisitions activity and strong performance in equity and debt underwriting. The company's net profit surged, and it expanded partnerships to capitalise on Canadian dealmaking opportunities. Despite beating profit estimates, its shares fell 0.5% in after-hours trading.

Levi Strauss reported a slight revenue miss in its fiscal second quarter, causing a sharp 12.2% drop in after-hours trading. Despite this, the company exceeded earnings expectations and announced an 8% dividend increase, attributing the revenue shortfall to forex challenges and sluggish sales at Docker’s. Levi’s continues to focus on direct-to-consumer sales for future growth.

BlackBerry beat first-quarter revenue expectations with strong demand for cybersecurity services amid heightened cyber threats. U.S.-listed shares rose 8.1% post-market. Despite a broader tech spending slowdown, cybersecurity investments surged due to major data breaches, driving BlackBerry's performance. The company expects second-quarter revenue slightly below analysts' estimates but reaffirmed its full-year outlook.

Bank of America reiterated a "Buy" rating for Amazon.com, emphasising potential logistics efficiency gains despite current metrics lagging 2018 levels. They project Amazon to lead with over 9 billion global package deliveries in 2024, ahead of UPS, and raised their price target to $220, citing optimism in retail margin projections and strategic initiatives.

Wolfe Research analysts upgraded Robinhood's shares to "Outperform," citing strong prospects driven by solid net deposits, significant operating leverage, and robust free cash flow generation. They expect earnings per share to reach approximately $1 by 2026, far surpassing current Wall Street consensus, and set a price target reflecting a 31% potential increase from recent closing prices.

Bank of America's Savita Subramanian asserts that US value shares, notably neglected this year compared to growth stocks like Nvidia, present compelling opportunities due to their low valuations. She emphasises their potential amid a favourable market environment, highlighting sectors like energy and expecting significant dividend growth in the coming decade.

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