Zhitong Finance learned that on Wednesday, the three major indices set closing records. The US consumer price index (CPI) data for April was tepid, increasing the market's optimism that inflation is easing after being higher than expected for three consecutive months. This has led traders to increase their bets that the Federal Reserve will cut policy interest rates in September and December.

[US stocks] At the close, the Dow rose 349.89 points, or 0.88%, to 39908.00 points; the NASDAQ rose 231.21 points, or 1.40%, to 16742.39 points; and the S&P 500 rose 61.47 points, or 1.17%, to 5308.15 points. The three major stock indexes all hit record highs. GameStop (GME.US) fell 18%, AMD (AMD.US) rose 4%, and MicroStrategy (MSTR.US) 15%. The Nasdaq China Golden Dragon Index rose slightly, Alibaba (BABA.US) rose 1.8%, and Xiaopeng Motors (XPEV.US) fell 3.5%.

[European stocks] The main indices of European stocks rose. The German DAX30 index rose 0.82%, the French CAC40 index rose 0.17%, the European Stoxx 50 index rose 0.41%, and the British FTSE 100 index rose 0.21%.

[Asia Pacific Stock Market] The Nikkei 225 Index rose slightly, the Singapore Straits Times Index fell 0.71%, Vietnam's VN30 Index rose 0.99%, and Indonesia's Jakarta Composite Index rose 1.23%.

[Cryptocurrency] Bitcoin rose more than 7% to $65875.2; Ethereum rose more than 4.6% to $3015.2.

[Crude oil] U.S. crude oil futures prices closed higher on Wednesday. West Texas Intermediate (WTI) futures for June delivery on the New York Mercantile Exchange closed up $0.61, or 0.79%, to close at $78.63 a barrel. The April US CPI report shows that inflation is cooling down, making the market expect the Federal Reserve to speed up the pace of interest rate cuts in 2024. Retail sales in the US slowed markedly in April, indicating that high interest rates have seriously weakened consumers' spending power.

[Metals] Most metals in London rose, with aluminum up more than 2%, nickel up more than 2.5%, copper up 1.6%, and lunzine down 0.68%.

[Macro News]

The US core CPI monthly rate has cooled down for the first time in six months, giving the Federal Reserve a sigh of relief. The monthly rate of the US core CPI cooled down for the first time in 6 months, indicating that price pressure is gradually weakening and supports the Federal Reserve's intention to maintain high interest rates for a longer period of time. Economists believe that the core indicator reflects potential inflation better than the overall CPI. According to data from the US Bureau of Labor Statistics, the overall CPI rose 0.3% from the previous month and 3.4% from the same period last year. Housing and gasoline spending accounted for more than 70% of this increase, the Bureau of Labor Statistics said in its report. While these data may give the Federal Reserve some hope that inflation is returning to a downward trend, officials would like to see more data to gain the confidence they need to start considering cutting interest rates. Federal Reserve Chairman Powell said yesterday that the Federal Reserve will “need to be patient to let restrictive policies work,” and some policy makers don't expect interest rates to be cut at all this year.

Retail sales in the US unexpectedly remained flat in April. Retail sales in the US unexpectedly remained flat in April, as rising gasoline prices lowered spending on other products, indicating that consumer spending is losing momentum. The US Department of Commerce said on Wednesday that retail sales remained unchanged in April, and retail sales increased 0.6% in March after being revised down. In the face of rising prices, consumers are focusing on necessities and reducing consumption of luxury goods. However, retail sales have remained stable as a strong labor market helped families survive a high inflationary environment. However, retail sales, excluding automobiles, gasoline, construction materials, and food services, fell 0.3% in April after rising 1.0% in March.

New York Federal Reserve: New York industry failed to improve in May. According to the New York Federal Reserve survey, factory activity in New York State declined even more in May, breaking expectations for a slight improvement. The data shows that the overall business situation in New York State is deteriorating, falling from -14.3 a month ago to -15.6. New orders continue to drop sharply, indicating that demand in the state is still weak. In contrast, there has been a significant improvement in shipment volume. The survey shows that the outlook for the future has also become bleaker. The overall outlook index for the next few months has declined, and companies' expectations for orders and shipments have also declined. Richard Deitz, economic research adviser at the New York Federal Reserve, said that the manufacturing situation in New York State was still sluggish in May, and activity and orders continued to decline; labor market conditions were also weak because employment and working hours were declining.

Federal Reserve Goulsby: Optimistic about the decline in housing inflation. Federal Reserve Goulsby said that he is “optimistic” and believes there is evidence that US housing price inflation will drop drastically, bringing the overall level of inflation down to the Fed's 2% target. In an interview, he said that as can be seen from today's CPI data, there has been a decline in the housing sector. He was referring to the CPI data just released in April. The index rose 3.4% from the same period last year, with rent growth slowing down markedly. He thinks it would be great if this continues. If this does not continue, then the Federal Reserve will have to conduct an in-depth investigation to try to figure out what happened.

Inflation across the US has cooled, but prices have jumped in four major metropolitan areas, including New York and San Francisco. Although the overall rise in consumer prices in the US slowed in April, the inflation rate in the four major metropolitan areas rose to the highest level in a year or more. According to data released by the US Bureau of Labor Statistics on Wednesday, the CPI in the Philadelphia region rose 4.1 year on year in April, St. Louis rose 4%, and New York and San Francisco were both 3.8%. These figures are all higher than the national average. The factors driving price increases in these metropolitan areas are not the same, but overall, energy and housing costs are the main reasons for rising consumer prices in New York, San Francisco, and Philadelphia.

NAHB: Rising mortgage interest rates hurt builder confidence. Mortgage interest rates have averaged over 7% over the past four weeks, and builder confidence declined for the first time since November 2023, according to Freddie Mac. Builders' confidence in the newly built single-family home market in May was 45, down 6 points from April, according to data released by the National Association of Home Builders (NAHB) today. NAHB Chairman Carl Harris said that since mortgage interest rates rose, the market has slowed, causing many potential buyers to retreat to the second tier. NAHB chief analyst Robert Dietz said that the Fed's lack of progress in curbing inflation pushed up long-term interest rates in the first quarter, which dragged down builders' confidence. The final step in fighting inflation is reducing housing inflation, which can only be achieved if builders are able to build more affordable homes.

[Individual Stock News]

Buffett sold 110 million shares of Apple (AAPL.US) in the first quarter to open a position with Chubb Insurance (CB.US). According to the 13F US stock holdings documents submitted by Buffett's Berkshire Hathaway, in the first quarter, Berkshire increased its holdings of Occidental Petroleum (OXY.US) by 4.3 million shares, cleared HP (HPQ.US), reduced its holdings by 116 million shares, fell to 40%, and purchased 25.92 million shares of Anda Insurance. As of the end of Q1, the total market value of Berkshire's holdings was US$332 billion, and the market value of Apple shares held was US$135.4 billion (previously announced at the shareholders' meeting).

“Big short” Michael Burry took a heavy gold position in the first quarter. On May 15, a recent regulatory document showed that Michael Burry drastically increased his physical gold trust holdings in the first quarter of this year, which became the number one position target in Scion Asset Management's holdings he manages. As head of Scion Asset Management, Burry purchased more than 440,000 copies of Sprott Physical Gold Trust (PHYS) in the first quarter, with a total value of over $10 million. A Sprott physical gold trust is a closed-end fund characterized by directly holding physical gold rather than gold derivatives or stocks. Currently, the market price of this gold trust is below its net asset value (NAV). According to data provided by Nuveen, PHYS's current discount rate is 1.67%, which is slightly higher than its average discount rate of 1.57% over the past 52 weeks. During this period, PHYS's maximum discount rate reached 2.52%, and in the past year, its transaction price has never been higher than its net asset value. According to public information, Michael Burry is a famous investor. He is famous for accurately predicting the subprime mortgage crisis. His move was later written into the book “The Big Short” and adapted into a film of the same name. Judging from the top 10 positions held by Scion Asset Management, in addition to increasing its gold holdings, the second and third largest stocks are China's two e-commerce giants JD (JD.US) and Alibaba (BABA.US), and Burry is also increasing its investment in them. In addition, his main holdings include companies such as HCA Healthcare (HCA.US), Citigroup (C.US), and Block (SQ.US).