On Tuesday local time, the rebound of technology stocks boosted the strength of the US stock market, with Nvidia rebounding nearly 7% again after a few days of adjustment. The overall performance of the chip sector was excellent, driving the Nasdaq up more than 1.2%. However, excluding Nvidia and some other major technology stocks, the Dow Jones Industrial Average did not benefit, and Tuesday was also the eighth time in 10 trading days that the Nasdaq and Dow Jones have seen a reverse trend.
Federal Reserve Governor and well-known hawkish spokesperson Bauman spoke out on Tuesday, stating that if inflation does not continue to improve, he will be willing to support interest rate hikes, and now is not the right time to start cutting interest rates; There are multiple upward risks to the inflation outlook, and it is expected that there will be no interest rate cuts in 2024. From the recent public statements of several Federal Reserve officials, the view that "we need to wait for some time before we can discuss interest rate cuts with more inflation cooling data" is quite common.
In addition to chip stocks, the "weight loss drug duo" also performed outstandingly on Tuesday in the US stock market, with both stocks reaching historic highs: Novo Nordisk closed up 3.25% at $146.91; Lilly Pharmaceuticals closed up 1.63% at $904.61.
According to CCTV News, on June 25th local time, the Midwest of the United States was facing floods and extreme heat. US President Biden issued a major disaster statement on the morning of the same day and promised to provide federal assistance to support recovery efforts in affected areas.
The three major stock indexes in the United States have mixed closing gains and losses
Nvidia surged nearly 7%
On Tuesday local time, the three major US stock indexes closed with mixed gains and losses. As of the close, the Dow Jones Industrial Average fell 0.76% to 39112.16 points, the S&P 500 Index rose 0.39% to 5469.3 points, and the Nasdaq rose 1.26% to 17717.65 points.
On the market, technology stocks rose overall, with Apple up 0.45%, Amazon up 0.41%, Netflix up 0.51%, Google up 2.68%, Facebook up 2.34%, and Microsoft up 0.73%.
Chip stocks have strengthened overall, with Nvidia rebounding on Tuesday, rising 6.76% and returning to the $3 trillion club after its market value evaporated by over $400 billion in the previous three days. In addition, TSMC rose 2.84%, ASMC rose 2.13%, Applied Materials rose 1.93%, Micron Technology rose 1.52%, Grid Chip rose 1.13%, Qualcomm rose 0.66%, Intel rose 0.56%, and Broadcom fell 0.72%.
UBS Group stated that Nvidia's recent sell-off does not reflect a deteriorating outlook for technology or the market, as other demand signals are positive. "Nvidia's stock price correction should not be mistaken for a warning signal of artificial intelligence structured investment cases or the overall stock outlook."
Steve Eisman, Senior Portfolio Manager at Luboma, also stated that Nvidia's market value drop of $430 billion within three days is not a big deal. Eisman is widely known for short selling subprime mortgages before the financial crisis. He said he holds a "significant" amount of Nvidia stock and sees it as a long-term investment, believing it will make sense in the coming years.
Novo Nordisk's stock price reaches a historic high
On Tuesday's US stock market, the stock prices of "Weight Loss Drug Twin Heroes" both reached historic highs, with Novo Nordisk closing up 3.25% at $146.91; Lilly Pharmaceuticals closed up 1.63% at $904.61. Novo Nordisk, listed in Copenhagen, Denmark, rose about 4% to close at 1028 Danish kroner, reaching a historic high and breaking through 1000 Danish kroner for the first time in history.
On June 25th, Novo Nordisk announced that a new indication for Smegglutide Injection has been approved for marketing by the National Medical Products Administration of China (product name: Novo Nordisk®) as an adjunctive therapy for a low calorie diet and increased physical activity, for initial body mass index (BMI) ≥ 30kg/m2 (obesity), or ≥ 27kg/m2 and< Adult patients with a weight of 30kg/m2 (overweight) and at least one comorbidity associated with overweight.
In June 2021, the weight loss indication of Smegglutide (trade name: Wegovy) was approved for marketing by the US Food and Drug Administration (FDA), becoming the first and only weekly GLP-1 receptor agonist used for weight management.
According to the first quarter financial report of 2024, three products of Smegglutide generated a total revenue of 42.2 billion Danish kroner (6.132 billion US dollars). Among them, sales of Ozempic, an injectable hypoglycemic drug, continued to climb to 27.81 billion Danish kroner (4.041 billion US dollars), with a growth rate of 43%; The sales revenue of Rybelsus, an oral hypoglycemic product, was 5.013 billion Danish kroner (728 million US dollars), a year-on-year increase of 17%; The sales of weight loss drug Wegovy doubled to 9.377 billion Danish kroner (1.363 billion US dollars).
Even mentioning interest rate hikes?
Senior Federal Reserve officials release hawks
On Tuesday local time, Federal Reserve Governor Bowman once again "hawked" during his speech on monetary policy, warning the market of the risk of upward inflation and reiterating that it is not yet time to cut interest rates and that interest rates need to be kept high for a period of time.
Bauman stated that inflation has only "slightly improved" so far this year. The surge in labor supply brought about by supply chain improvement and immigration is unlikely to continue. Geopolitics, fiscal stimulus, and a relaxed financial environment are additional potential risks to inflation, which is expected to remain high for a period of time.
Bauman also stated that there is no expected interest rate cut in 2024, and the Federal Reserve may postpone the rate cut until 2025. "We have not yet reached the appropriate point for lowering policy interest rates, and given the risks and uncertainties in my economic outlook, I will remain cautious when considering future changes in policy stance."
It is worth mentioning that Bauman is one of the hawkish spokespersons for the Federal Reserve, and his remarks this time are no exception.
On the same day, Federal Reserve Governor Cook also delivered a public speech. Cook said that the timing of interest rate cuts depends on economic data, and it is expected that inflation will slow down more significantly next year. Among them, core commodity inflation may maintain a slight negative growth, while core service inflation excluding housing will gradually slow down. As inflation gradually comes under control, it will be appropriate to lower interest rates at some point in the future, but Cook did not disclose when the Federal Reserve will take action.
Rivian, the "new tycoon of electric vehicles," rose over 50% after market hours
In addition, during post market trading on Tuesday, American electric vehicle startup Rivian Automotive surged by over 50%.
On the news side, Volkswagen plans to invest up to $5 billion in Rivian, with an initial investment of approximately $1 billion and an expected increase of approximately $4 billion by 2026. According to a joint announcement by two car manufacturers on Tuesday, the plan includes an investment of approximately $1 billion each in 2025 and 2026, followed by an investment of $2 billion in 2026. The remaining $4 billion will be related to an expected joint venture to jointly create electrification architecture and software technology.
Due to the significant cash flow required for the manufacturing of electric vehicles, Rivian has suffered significant losses for several quarters. Due to the company's need to consume a large amount of cash to build a factory and manufacture cars, cash flow was once depleted, and as a result, Rivian's stock price has been under huge selling pressure from Wall Street investment institutions. Rivian's stock price closed at $11.96 per share on Tuesday, and has fallen by about 49% so far in 2024.
Tesla announces a recall of 23000 Cybertruck models in the United States
On Tuesday, the National Highway Traffic Safety Administration (NHTSA) released a recall notice stating that Tesla will recall a total of 11688 2024 Cyberracks.
The reason for the recall is that excessive current can cause the front windshield wiper motor controller to malfunction, which can reduce visibility and increase the risk of collision. Tesla's after-sales service department will replace the wiper motor free of charge.
In addition, Tesla will recall 11383 2024 Cybertruck models due to the risk of detachment caused by improper adhesion of the sail shaped decorative panel on the trunk lid. Tesla's after-sales service department will use adhesive accelerators and pressure-sensitive tape as necessary, or replace missing trim panels free of charge.
The central and western United States is facing floods and extreme high temperatures
Biden issues a major disaster statement
According to CCTV News, on June 25th local time, the Midwest of the United States was facing floods and extreme heat. US President Biden issued a major disaster statement on the morning of the same day and promised to provide federal assistance to support recovery efforts in affected areas.
The National Weather Service of the United States has warned that potential storms may bring hail, strong winds, and tornadoes. Approximately 31 million people in the United States will face severe weather risks on the evening of the 25th, and parts of Missouri, Iowa, Illinois, and Minnesota can receive up to 5 centimeters of rainfall per hour.
It is reported that at least 2 people have died due to floods. In addition, it is expected that 29 river coastal areas in the United States will be severely affected by floods.
