Market 06/06: ECB cuts interest rates but raises inflation forecast putting pressure on FED

FED To Cut Rates In September? NVDA Hits 3 Trillion Dollar Mark

Morning ADP employment data shows labor demand continues to cool in line with FED expectations, however not too strong to cause recession fears. ISM survey also shows economic activity slowing, so is this the condition for FED to cut rates in September?

Europe: ECB cuts rates for the first time since 2019

ECB cuts deposit rate to 3.75% - first cut since 2019

ECB forecasts Eurozone inflation for 2024 and 2025 to be higher than expected, at 2.5% and 2.2% respectively, up from previous 2.3% and 2%.

Following BOC's cut and today ECB, September is seen by the market as the right time for Fed and BOE to cut rates

Initial jobless claims last week rose to near 8-month high - layoffs drop sharply

• Initial jobless claims rise to 229,000, higher than estimate 220,000

• Continuing claims rise to 1.792 million vs estimate 1.79 million

4-week moving average of initial jobless claims only slightly higher than 52-week average

→ initial jobless claims trending higher

Challenger layoffs in May drop -20.3% Y/Y vs -3.3% last month

Layoffs in auto industry drop 13.3 thousand after rising 12.5 thousand in April - both moves largest since mid-2020

Finance sector layoff cycle appears to have ended as May layoffs drop to lowest since Sep/2023

Q1 labor productivity revised lower

• Q1/2024 productivity revised to +0.2% Q/Q vs initial +0.3%

• Unit labor costs +4% Q/Q, below initial estimates +4.9% & +4.7%

Labor cost growth pace, in line with cooling core PCE trend

US international trade deficit smaller than expected

April trade deficit at 74.6 billion USD", lower than estimates of 76.5 billion USD & 68.6 billion USD from last month"

Imports up +3.1% in April - largest M/M increase since March 2022

Crypto Market: Binance limits stablecoin access in Europe

Binance restricts 'Unauthorized Stablecoin' for users in EU starting from 06/30

Binance may once again allow Mastercard users to buy cryptocurrency on the exchange, after disabling that feature in August 2023.

Robinhood to acquire European crypto exchange Bitstamp for 200 million USD as part of its plan to expand outside the US

Q1/2024 earnings update: Lululemon

• Revenue: 2.2 billion USD, +10% Y/Y

  • US: 1.45 billion USD, +3% Y/Y

  • International: 758.9 million USD, +35% Y/Y

• Gross profit: 1.3 billion USD, +11% Y/Y

• Gross margin: 57.7%, +20 bps

• Diluted EPS: 2.54 USD, higher than 2.28 USD last year

Other news

1. Nvidia reaches 3 trillion USD market cap, surpassing Apple to become the world's 2nd largest company and will soon catch up to Microsoft.

, $NVDA and $AAPL about to become the first trio to reach 10 trillion USD total market cap

• This trio currently has a total market cap larger than every stock market in the world except the US.

2. Salesforce opens first AI center in London, as part of a 4 billion USD investment in the United Kingdom

3. US regulatory agencies launch antitrust investigations against Nvidia, Microsoft, and OpenAI

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