On Thursday, the S&P 500 and Nasdaq extended their record highs for the fourth straight session, boosted by a tech rally. Broadcom surged 12.8% on strong AI chip forecasts and a share split, while Tesla gained 2.7%. Conversely, Virgin Galactic dropped 14.2% following news of a reverse equity split. Meanwhile, European equities faced losses, with the Stoxx 50 declining 1.9% to a one-month low at 4940. ASML Holding fell over 2%, SAP over 1%, amidst broader market concerns exacerbated by political turmoil in Southern Europe and widening yield spreads between French and German bonds.

Summary for 14.06.2024

Most Asian equities fell on Friday amid cooling US inflation and focus on the Bank of Japan's meeting. Chinese shares were the worst hit due to new EU tariffs on electric vehicles, while Japanese shares remained flat. Australian shares declined, and South Korea's KOSPI rose on tech sector strength.

European bourses are poised for a higher open while US equity futures also held steady as Adobe surged 15% in extended trading after exceeding fiscal second-quarter estimates and raising its full-year guidance.

Oil prices fell in Asian trade on Friday as traders took profits, though crude prices are set for a weekly gain on hopes of tighter supplies. Brent and WTI futures rose over 3% this week due to OPEC+ assurances on production cuts. Despite this, US inventory builds and oversupply concerns remain.

US factory gate prices dropped 0.2% month-on-month in May 2024, contrary to expectations of a 0.1% increase, following a 0.5% rise in April. The decline, the largest since October 2023, was driven by a 7.1% drop in gasoline prices. Prices for final demand services remained unchanged after April’s 0.6% increase.

US unemployment claims rose unexpectedly to 242,000, the highest since August 2023, indicating a softening labour market. Outstanding claims also increased, supporting expectations for multiple Federal Reserve rate cuts if inflation trends toward target levels.

Industrial production in the Euro Area fell 0.1% month-over-month in April, contrasting with a revised 0.5% growth in March and missing expectations of a 0.2% increase. Yearly output declined by 3%, deeper than the previous month's 1.2% drop, with mixed performances across sectors including a rebound in consumer goods but declines in intermediate and capital goods.

Adobe reported better-than-expected Q2 results, with adjusted earnings of $4.48 per share on $5.31 billion in revenue. Shares rose over 14% in afterhours trading. Q3 guidance exceeded EPS estimates but fell slightly short on revenue. For fiscal 2024, Adobe projects EPS of $18.00-$18.20 on $21.40B-$21.50B in revenue.

Tesla shareholders approved Elon Musk's $56 billion pay package at their annual meeting, highlighting strong retail investor support despite institutional opposition and ongoing legal challenges. The package, the largest in US corporate history, underscores confidence in Musk's leadership amid concerns over governance and future business strategies.

Boeing is investigating a quality issue with its 787 Dreamliner involving incorrectly installed fasteners on the fuselages of undelivered jets. Over 900 fasteners per plane were affected, potentially requiring rework. Despite no immediate safety concerns, Boeing is conducting inspections and working with regulators and customers to address the issue.

Visa and Mastercard's proposed $30 billion antitrust settlement, aimed at limiting card fees, faces rejection by a New York judge, jeopardising resolution of a long-standing case over swipe fees. The judge signalled dissatisfaction, citing concerns that the settlement did not adequately address merchant grievances about fee control and anti-steering practices.

Renault unveiled its first electric sports car, the Alpine A290, aiming to compete in the premium EV market amid rising Chinese competition. Priced at €38,000, it targets Audi, BMW, Mercedes, and Tesla, part of Renault's strategy to boost margins with seven new electric models under its Alpine brand despite challenges in the EV sector.

Bank of America raised Broadcom's price target to $2,000 after exceeding sales expectations, raising FY 2024 outlook to $51 billion, and announcing a 10:1 share split. Barclays also upgraded Broadcom, highlighting its AI chip growth, networking leverage, and strong Q2 results with EPS of $10.96 and revenue of $12.49 billion.

Shein, known for low-cost fashion, has raised prices on core products by over 30%, exceeding rivals like H&M and Zara. This move aims to boost revenues ahead of its anticipated IPO, potentially valuing the company at around $50 billion. Shein faces higher costs and regulatory challenges as it prepares for public listing.

Keith Gill, known as RoaringKitty, increased his GameStop holdings to 9,001,000 shares from 5 million by exercising call options. He sold 80,000 call options and converted 40,000 into shares, now holding no options. Gill's average cost per share is $23.4135, with a current paper gain of $51 million.

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