On Monday, the S&P 500 fell 0.3%, the Nasdaq lost 1.1%, and the Dow Jones gained 260 points as markets braced for key PCE inflation data and Federal Reserve commentary. The energy sector outperformed while tech lagged, with Nvidia extending losses and ResMed plunging 13.2%. Meta rose 0.8% on AI partnership news with Apple, and Affirm soared 12.8% on a Goldman Sachs buy recommendation. In Europe, the Stoxx 50 climbed 1%, led by gains in Siemens, LVMH, and Deutsche Telekom, while UniCredit surged nearly 4%. However, ASML Holding and SAP saw declines.

Summary for 25.06.2024

Asian equity markets rose on Tuesday as improved risk sentiment led investors to rotate out of high-flying technology shares into more reasonably valued sectors like banking and energy. Positive data on consumer confidence from South Korea and Australia, along with slowing services producer inflation in Japan, also buoyed markets ahead of key US events.

European shares are set to open lower while US equity futures steadied early Tuesday as investors continue to rotate out of semiconductor and AI shares into other sectors.

Oil prices hovered near their highest levels in almost two months this morning, driven by geopolitical tensions in Eastern Europe and the Middle East. Supply concerns were heightened by Ukrainian attacks on Russian oil facilities and EU sanctions on Russian oil shipments, despite ongoing demand uncertainties from China and the US Federal Reserve's cautious stance.

Bitcoin remained under pressure early Tuesday after tumbling about 5% yesterday to its lowest in nearly two months amid steady outflows from Bitcoin ETFs, with US ETFs seeing significant withdrawals. Investor sentiment was dampened by uncertainties over anticipated interest rate cuts, German government selling, and Mt. Gox’s plans to repay $9.4 billion in Bitcoin to creditors.

Airbus adjusted down its delivery forecast to about 770 jets this year from 800, citing supply disruptions and commercial risks, particularly in its space activities. The company postponed increasing A320neo production and revised 2024 financial targets lower due to ongoing industrial challenges and shortages, notably in engine supplies.

Apple reportedly declined Meta's proposal to integrate its Llama AI chatbot into iPhones earlier this year, citing concerns over Meta's privacy practices. Discussions were brief and did not progress to a formal partnership, contrasting Apple's recent adoption of OpenAI's ChatGPT and Alphabet's Gemini for its AI strategy unveiled in June.

Novo Nordisk plans to invest $4.1 billion in a new US facility at its Clayton, North Carolina site to boost production of Wegovy and Ozempic injection pens. Expected to be completed by 2029, the expansion aims to meet high demand for its obesity and diabetes treatments amidst competition and global growth prospects.

Jefferies analysts upgraded Nvidia to Buy with a new price target of $150 per share, citing positive insights from their recent Asia trip and upcoming AI industry meetings. They highlight Nvidia's dominant position in AI, upcoming product transitions, and increased chip production capacity as key drivers of optimism despite sector concerns.

Bank of America raised Broadcom's price target to $2,150, noting its shift from a value to growth share driven by AI and VMware contributions. They expect a doubled growth rate, foreseeing AI silicon and VMware sales comprising over half of revenue. Risks include AI sentiment shifts and competitive pressures from Nvidia.

Micron received significant price target upgrades from both Citi and Baird analysts ahead of its fiscal Q4 2024 earnings report on 26th June. Citi, designating Micron as a Top Pick, raised its target to $175, anticipating strong results driven by DRAM upturn and expanding AI memory sales. Meanwhile, Baird increased its price objective to $172, highlighting optimistic prospects in DRAM pricing and high-bandwidth memory (HBM) growth.

RBC analysts highlighted LVMH as a potential buying opportunity after its 18% decline over three months, contrasting with a 2% rise in the European MSCI index. They foresee revenue acceleration in the second half of 2024, buoyed by favourable comparisons. Despite a reduced EBIT forecast, they maintain an "outperform" rating with a target of €900, signalling a 27% upside from current levels.

Jefferies analysts are optimistic about Airbnb due to increased bookings in Paris during the upcoming Olympics, expecting a significant boost in Night growth. They anticipate a ~2% increase in 2Q24 Nights growth and highlight Airbnb's potential to attract new users and drive long-term growth beyond the event.

UBS analysts predict Tesla will deliver around 420,000 vehicles in Q2, below market expectations but an improvement from Q1. They note potential impacts from regional dynamics, anticipate challenges in gross margins despite delivery improvements in the US and China, and highlight upcoming events like Tesla AI Day and new vehicle reveals.

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