Momentum In Nvidia Powers Nasdaq's Rise Above 17,000

Alexander Garcia
28 May, 2024
Miami

Stocks on Wall Street inched higher as investors looked ahead to the release of inflation data later in the week. 

Market sentiment was subdued after Minneapolis Fed President Neal Kashkari said that policymakers will like to see sustained slowdown in inflation for several months before interest rates could be lowered. 

Market sentiment was subdued after Minneapolis Fed President Neal Kashkari said that policymakers would like to see a sustained slowdown in inflation for several months before interest rates could be lowered. 

Kashkari's comments echo comments from other participants in the rate-setting committee and minutes from the latest policy meeting. 

“Many more months of positive inflation data, I think, to give me confidence that it’s appropriate to dial back,” Kashkari said in an interview with the CNBC. 

Kashkari is not a voting member of the rate-setting committee in 2024, but he does participate in the policy decision. 

Kashkari said that the Federal Reserve could potentially hike interest rates if inflation fails to weaken further in the coming months. 

Tech stocks advanced after investors returned from a 3-day weekend amid ongoing interest rate jitters and worries of a consumer pullback. 

The Nasdaq Composite advanced by 0.7%, and traded above 17,000 for the first time after Nvidia surged 5.5%.  

This month, the S&P 500 index has advanced more than 5% and the Nasdaq Composite has gained about 8%, and the two popular market indexes are set to extend gains in this holiday-shortened week of trading. 

Investors are looking forward to the release of the persona income and outlay report, which includes the persona consumption expenditure index, on Friday. 

The PCE index, the preferred measure of inflation by Federal Reserve policymakers, is likely to provide fresh insights into the inflationary forces and how consumers are adjusting to the sustained increase in prices of food, fuel, and shelter. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index rose 0.1% to 5,308.81, and the Nasdaq Composite jumped 0.5% to 17,006.51. 

The yield on 2-year Treasury notes edged lower to 4.93%, 10-year Treasury notes decreased to 4.46%, and 30-year Treasury bonds edged lower to 4.55%.

WTI crude oil increased $1.07 to $79.68 a barrel, and natural gas prices advanced 2 cents to $2.53 a thermal unit.

Gold increased by $8.61 to $2,361.14 an ounce, and silver rose 7 cents to $31.53. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.36.

 

U.S. Stock Movers

GameStop jumped 21% to $23.30 after the specialty retailer said it raised $933.4 million through the sale of 45 million in a secondary offering. 

United States Cellular Corp. jumped 10.3% to $47.50 after the wireless services provider agreed to be acquired by T-Mobile. 

Deutsche Telekom-controlled T-Mobile agreed to pay $4.4 billion for the wireless operation of U.S. Cellular and 30% of its wireless spectrum assets. 

The deal is expected to be completed in the second quarter of 2025, and T-Mobile will also enter into a new licensing agreement on more than 2,000 towers. 

 

European Indexes Struggled to Advance

European market indexes struggled to rise above the flatline as investors awaited the release of inflation surveys in the eurozone and in the U.S. 

Benchmark indexes in Frankfurt, Paris, and London as investors reviewed the latest economic updates. 

The Euro Area consumer expectations' for the next 12 months eased to 2.9% in April from 3.0% in March, according to the survey from the European Central Bank released on Tuesday. 

Inflation expectations fell to their lowest level since September 2021. 

The U.K. shop price inflation slowed to an annual increase of 0.6% in May after an increase of 0.8% in April, the British Retail Consortium and the market research company NielsenIQ reported Tuesday. 

The shop price inflation rose at the slowest pace since November 2021. 

 

Germany's Wholesale Price Decline slowed In April

Germany's wholesale prices declined and slowed in April, according to the Federal Statistical Office, or Destastis. 

The wholesale price index decline slowed to an annual pace of 1.8% in April, after falling 2.7% in March and 2.6% in February. 

The latest wholesale price index is based on a new series that reflects the revised base rate for 2021 from 2015 and changes in baskets of goods and weights for individual items. 

On a monthly basis, wholesale prices rose 0.4% in April from the previous month.

The main reason for the overall decline in wholesale prices was the drop in prices in the wholesale trade in chemical products (17.9%), grain, raw tobacco, seeds, and animal feed (12.2%), ores, metals, and semi-finished metal products (7.2%), scrap and residues (6.8%), and milk, milk products, eggs, edible oils, and food fats (6.3%).

Meanwhile, wholesale prices for coffee, tea, cocoa, and spices rose (9.3%), sugar, confectionery, and baked goods (7.2%), and tobacco products (5.0%).

 

Europe Indexes and Yields

The DAX index decreased by 0.6% to 18,664.33; the CAC-40 index fell by 1.0% to 8,046.34; and the FTSE 100 index decreased by 0.8% to 8,253.64. 

The yield on 10-year German bonds edged down to 2.56%; French bonds inched higher to 3.05%; the UK gilts edged lower to 4.23%; and Italian bonds inched higher to 3.87%.

The euro edged higher to $1.087; the British pound inched higher to $1.277; and the U.S. dollar gained to 91.06 Swiss cents.

Brent crude increased $1.20 to $84.05 a barrel, and the Dutch TTF natural gas fell by €1.42 to €33.51 per MWh.

 

Europe Stock Movers

Rheinmetall AG increased 0.3% to €533.80 after the German automotive and arms company won an order from a European government for the supply of 35 mm AHEAD ammunition for the Skynex air defense system. 

Cadeler AS decreased 1.7% to €5.80 after the offshore wind turbine installation vessel reported a loss in the first quarter. 

Revenue in the first quarter was €19 million, matching the level in the period a year ago, and operating income swung to a loss of €10 million compared to a gain of €8 million a year ago. 

The company reiterated its 2024 revenue to range between €225 million and €245 million and its operating income between €105 million and €125 million. 

The company's order book swelled to €1.8 billion. 

In addition, the company completed a successful private placement on February 15 and sold 39.5 million shares at a price of NOK 44.50 per share, raising €155 million before transaction costs.

Softcat PLC declined 0.9% to 1,700.0 pence despite the IT infrastructure company reiterating its full-year outlook. 

ThyssenKrupp AG rose 1.9% to €4.82 after the company's material services unit's chairman, Martin Stillger, decided to resign effective May 31. 

Intermediate Capital Group rose 2.7% to 2,382.0 pence after the private equity group reported record management fees and assets under management. 

Management fees in the financial year increased 5% to £505 million, and fund management profit before tax soared 21% to £375 million. 

Total fee earnings and assets under management rose 11% to £70 billion at the end of the financial year 2024. 

The company declared a total ordinary dividend of 79 pence per share, increasing its annual dividend for the 14th year in a row. 

 

Japan Stocks Lack Direction Amid Rate Path and Yen Uncertainties 

Stocks in Tokyo traded sideways amid ongoing interest rate jitters and uncertainty surrounding the Bank of Japan's policy response. 

The Nikkei 225 and the Topix index edged lower in a choppy trading session as investors parsed comments from Bank of Japan Deputy Governor Shinichi Uchida. 

On Monday, Deputy Governor Uchida suggested that Japan's persistent battle against deflation is nearing an end amid sustained price increases driven by the increase in energy prices and that estimated wages are likely to keep rising in the near future. 

Moreover, investors also reviewed the latest comments from the European Central Bank's policymakers, suggesting that the first interest rate cut may be announced as early as next week after the next policy meeting. 

The Japanese yen traded at 156.87 against the U.S. dollar in late afternoon trading in Tokyo as currency traders bet that the Bank of Japan will keep its accommodative stance intact amid the large rate gap between the U.S. and Japan. 

 

Japan Stock Movers 

The Nikkei 2225 Stock Average declined 0.1% to 38,864.32, and the Topix index advanced 0.1% to 2,768.73. 

Technology stocks traded mixed, and Tokyo Electron, Advantest, and Screen Holdings declined, but Socionext and Renesas Electronics fell as much as 1.0%. 

Financial stocks also traded mixed for the second session in a row, with Sumitomo Mitsui Financial and Mitsubishi Financial advancing 1% and Mizuho Financial falling about 0.8%. 

Power generators and distributors led the gainers in Tokyo trading. 

Toray Industries, Furukawa Electric, and Kansai Electric Power advanced between 3% and 7%. 

 

Shanghai Announces Measures to Support Property Market Amid Weak Demand and High Prices 

Benchmark indexes in Shanghai and Hong Kong attempted to trade higher after the Shanghai government announced measures to support local property market transactions. 

Shanghai authorities announced several measures to revive property market transactions and became the first tier-1 city as the central government offers financial incentives for regional governments as a part of a national plan. 

Shanghai lowered down-payment requirements and mortgage interest rates for first-time home buyers, permitted families with more than one child to purchase additional houses, and eased property purchase restrictions for out-of-city residents. 

The moves are designed to encourage buyers to acquire additional properties and increase liquidity for property developers. 

However, these measures are likely to fall short as buyers struggle with affordability issues amid sky-high house prices and job market uncertainty. 

The CSI 300 index and the Hang Seng index jumped nearly 1% in early trading but lost momentum in afternoon trading. 

 

China Stock Movers 

The CSI 300 index decreased 0.4% to 3,620.25, and the Hang Seng index edged up 0.04% to 18,829.03. 

China Vanke declined 1.3% to HK$6.03 after the state-controlled residential property developer agreed to sell an unfinished project for 2.24 billion yuan, or $309 million, and the company is likely to take a loss of 1.8 billion yuan. 

China Vanke sold the plot of land to its largest shareholder, Shenzhen Metro, and Baishuo Investment, and the land was acquired in December 2017 with the plan to build the company's headquarters for 3.1 billion yuan. 

Longfor Group decreased 1% to HK$13.48, and China Resources Land was nearly unchanged at HK$30.55. 

Semiconductor stocks traded higher after Beijing announced the setting up of a $47.5 billion investment plan to achieve self-sufficiency in advanced semiconductor production. 

SMIC gained 0.5% to HK$16.36, and Hua Hon Semiconductors jumped 0.4% to HK$19.86. 

Alibaba Health Information Technology soared 10.4% to HK$3.40 after the company reported annual income rose 65% from a year ago in its latest financial year ending in March.