Federal Reserve’s Policy Meeting Takes Center Stage
Attention Shifts to the Federal Reserve: The financial world turns its gaze to the start of the Federal Reserve’s two-day policy meeting. With the announcement expected on Wednesday, speculation abounds regarding the U.S. central bank’s stance on interest rates. Although a steady rate is anticipated, the focal point will be the Fed’s economic projections and potential rate cuts for the year, spurred by Chair Jerome Powell’s hint at nearing confidence in falling inflation.
Global Central Banks in the Limelight: Alongside the Fed, the Bank of England (BOE) and the Swiss National Bank (SNB) are also slated to meet this week. Both are projected to maintain current interest rates. The BOE’s decision hinges on further clarity on wage growth dynamics, especially in comparison to the U.S. and the eurozone. Meanwhile, the SNB might hold off on any changes until after the Fed and the European Central Bank initiate rate cuts, expected in June, to stabilize the Swiss franc.
Market Movements and Corporate Spotlight
Stock Market Rebounds: The main indices saw an uplift on Monday, recovering from a fortnight of losses amidst growing anticipation of the Fed’s meeting outcomes. This comes in the wake of recent hotter-than-expected inflation readings, fueling concerns over prolonged higher interest rates.
Nvidia and Pfizer Under the Microscope: Nvidia remains a focal point as it proceeds with its annual developer conference, where CEO Jensen Huang unveiled the B200 “Blackwell” chip, promising a substantial performance leap. Despite these advancements, Nvidia’s stock experienced a slight premarket dip. On another front, Pfizer reduced its stake in Haleon by approximately $3.9 billion, adjusting its holding to 22.6%.
Cryptocurrency and Commodity Updates
Cryptocurrency Watch: The crypto market eagerly awaits the Fed’s post-meeting stance, which could significantly influence Bitcoin’s appeal compared to traditional investments. Bitcoin has already seen a 50% gain this year, buoyed by U.S. ETFs. Standard Chartered predicts the $150,000 milestone for Bitcoin is within reach, citing rapid ETF inflows.
Oil Prices Dip Ahead of Fed Meeting: In commodity news, oil prices experienced a slight decline, retreating from four-month highs as the market anticipates the Federal Reserve’s meeting outcome. The U.S. and Brent crude futures both saw marginal drops early Tuesday, following a surge fueled by robust demand signals and geopolitical tensions. The industry also braces for the latest U.S. inventory data, expected later in the session.
As these events unfold, the financial landscape remains rife with anticipation, with central bank decisions and corporate developments steering market sentiments.
$NVDA- Morgan Stanley says there “were no big surprises” during CEO Jensen Huang’s keynote as part of Nvidia’s GPU Technology Conference, but adds that Blackwell performance claims highlighted the “impressive” and says that the performance of the Blackwell family “will raise the bar yet again.” Despite all that has happened in the last 18 months, it is clear from the GTC keynote that Nvidia believes it is “still early when it comes to unlocking the potential of generative AI” and the company also continues to push forward in services, omniverse, and robotics, says the firm, which continues to prefer Nvidia over other AI contenders and keeps an Overweight rating and $795 price target on the shares.$DIS- George Lucas, who received 37.1M Disney shares as part of the sale of Lucasfilm in 2012 and is currently the largest individual investor in the company, is supporting Disney CEO Bob Iger in the company’s proxy battle with activist investor Nelson Peltz, reported CNBC’s Becky Quick. In a statement provided to CNBC, the filmmaker wrote: “Creating magic is not for amateurs. When I sold Lucasfilm just over a decade ago, I was delighted to become a Disney shareholder because of my long-time admiration for its iconic brand and Bob Iger’s leadership. When Bob recently returned to the company during a difficult time, I was relieved. No one knows Disney better. I remain a significant shareholder because I have full faith and confidence in the power of Disney and Bob’s track record of driving long-term value. I have voted all of my shares for Disney’s 12 directors and urge other shareholders to do the same.”
$MU- UBS analyst Timothy Arcuri raised the firm’s price target on Micron to $120 from $95 and keeps a Buy rating on the shares. UBS sees results biased to the high-end of guidance, with revenue and gross margin likely guided $6B-6.1B and high teens at the midpoint, a number that will likely be viewed as “okay” but not “great,” the analyst tells investors in a research note. The firm expects pricing to continue moving higher in 2H. Remember in 2016 (our older members) when I begged for everyone to load up on shares at $10🫡
Bernstein says the firm is not surprised that Apple (AAPL) is looking to potentially partner with Google (GOOGL) on AI capabilities. Going it alone – or with another partner – would risk a highly profitable and proven revenue stream with Google today, the firm adds. Bernstein also believes a deal also makes sense for Google as it solidifies its relationship with Apple plus provides validation for Gemini, both of which have been recent question marks for Google investors. Apple could potentially partner with more than one AI player, providing access to different LLMs for different functionalities. That said, the firm does not believe that an AI partnership with Gemini or anyone else is essential for Apple to do right now.
$UAL- United Airlines (UAL) planes have seen eight incidents over the past two weeks involving aircraft manufactured mainly by Boeing (BA) and Airbus (EADSY), The New York Times’ Christine Chung reports. All of the incidents happened on flights that took off from or were headed to airports in the United States, and five involved airplanes made by Boeing, Chung writes, and while no injuries have been reported, the incidents have increased anxiety about aviation safety among federal officials. Kyra Dempsey, who writes about aviation accidents in a blog called Admiral Cloudberg, said that United’s recent issues were being “falsely conflated with Boeing’s troubles.” “While it’s bad luck that United had so many incidents in such a short period, in general such incidents happen frequently around the world and they aren’t on the rise overall,” Dempsey said.
Cognizant (CTSH) is advancing the application of generative AI technology with the Nvidia (NVDA) BioNeMo platform to solve complex challenges of drug discovery in the life sciences industry, such as improving productivity in the development process and increasing the speed at which new, life-saving treatments can be brought to market. By leveraging gen AI technologies, clinical researchers can rapidly sift through extensive datasets, more accurately predict interactions between drug compounds and create new, viable drug development pathways.
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