The benchmark S&P 500 (SP500) fell nearly 2% from Monday through Friday, and in the process, it posted its worst weekly performance since late October 2023. The retreat was primarily due to yet another hotter-than-anticipated consumer price index (CPI) report published on Wednesday. Investors reacted to the CPI data by dialing back their Federal Reserve rate cut expectations and all but shutting the door on a 25 basis point cut in June. Also grabbing headlines this week were geopolitical tensions in the Middle East and the start of the first quarter earnings season at home. Friday saw results from household names such as JPMorgan (JPM), Citi (C), and Wells Fargo (WFC). For the week, the S&P 500 (SP500) dipped -1.6%, the tech-heavy Nasdaq Composite (COMP:IND) lost ground by -0.5%, and the blue-chip Dow (DJI) slipped -2.4%. Read a preview of next week’s major events in Seeking Alpha’s Catalyst Watch.
Self-driving developments made headlines as General Motors’ (GM) Cruise unit resumed testing its robotaxis (with safety drivers) in Phoenix, Arizona. While Cruise plans to expand the effort to other cities – with the goal of eventually restarting driverless operations – it did not provide a timeline for doing so. Note that most WSB subscribers see the robotaxi market as a niche service. Cruise suspended all U.S. operations after an accident in California led to the temporary loss of its license in the state, while the fallout saw the exit of many top executives, including its CEO. (75 comments)
Nvidia (NVDA) shares entered correction territory, with companies battling to challenge the semiconductor giant’s dominance. Another leg down for the stock on Tuesday meant NVDA was off 12% from its record high seen in March. Turning up the heat in the chip race, Google (GOOG, GOOGL) unveiled its in-house processors and Intel (INTC) introduced its latest AI chip to rival Nvidia’s H100. As for the other Magnificent 7 stocks, Apple (AAPL) entered correction territory last month and Tesla (TSLA) is in a bear market, compared to the rest of the group which was trading near their 52-week highs. (16 comments)
Wrapping up a trip to China, U.S. Treasury Secretary Janet Yellen called on Beijing to change its industrial policy, as “artificially” cheap Chinese products flood the global market and threaten the viability of American and foreign firms. She also recalled the “China shock” of the 2000s that caused millions of job losses, asserting that the U.S. “will not accept that reality again.”Soon after the statements, Fitch cut China’s credit outlook to negative, reflecting growing risks to public finances and uncertain economic prospects, but affirmed the country’s A+ sovereign rating. (36 comments)
What goes on six in the morning, three at midday, one in the evening, and possibly none at night? Traders trying to play the legendary Oedipus were up against that riddle posed by the Federal Reserve as rate cut predictions continued to dwindle for 2024. The latest Consumer Price Index reinforced more hawkish expectations and saw Treasuries across the curve make some big moves on Wednesday, while the Dow Jones Industrial Average shed over 500 points. A day later, indices ended higher as a cooler Producer Price Index eased some concerns. (8 comments)
The Biden administration doubled down on efforts to cancel student loan debt, with a new initiative aimed at forgiving the bills of around 30M Americans. The latest pitch builds on dozens of executive actions taken to cancel $146B for 4M borrowers, which followed a Supreme Court decision that struck down a broader proposal aimed at eliminating nearly a quarter of America’s $1.7T in student debt. Expect additional legal challenges this time around, but the new measures could have more weight in court, given their scope and basis on the Higher Education Act of 1965. Student loan-related stocks include Navient (NASDAQ:NAVI), Nelnet (NYSE:NNI), Sallie Mae (NASDAQ:SLM) and SoFi (NASDAQ:SOFI). (226 comments)
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