Macro trends
The main inflation index of the Federal Reserve in March rose 2.8% from the same period last year, exceeding expectations
In March 2024, the US annual PCE inflation rate rose to 2.7%, the highest level in four months, compared to 2.5% in February, which is forecast to be 2.6%.
The core PCE price index rose 2.8% from the previous year. This figure is higher than the market forecast of 2.6%. On a monthly basis, core PCE prices rose 0.3% in March, in line with February data and in line with market expectations.
Figure: Core PCE Price Index
New home sales in the US rebounded to a six-month high
According to data from the US Department of Commerce, sales of new homes jumped 8.8% last month, and the seasonally adjusted annual growth rate was 693,000 units, the highest level since September. The median price of new home sales soared from $406,500 to $430,700 in March, while the average sales price reached $524,800.
Builders are building smaller, cheaper homes, but fewer are cutting prices. According to NAHB's survey last week, the percentage of prices cut by builders in April fell to 22% from 24% in March and 36% in December. There have also been fewer builders offering incentives to boost sales.
Goldman Sachs expects the US PCE inflation rate to trend to 2% by the end of 2025, which may bring a more predictable and stable economic landscape to American consumers
Funding trends
The Chinese stock market rebounded sharply this week. After a long period of poor performance, it will outperform the US stock market by the biggest margin in nearly a year and a half
Bitcoin bulls suspend leveraged betting as demand cools down after halving
According to CryptoQuant data, Bitcoin's bullish momentum has waned as its financing rate (a measure of market demand) turned negative for the first time since October 2023, which indicates a decline in trader interest. Prior to that, the cryptocurrency surged to an all-time high due to the launch of a US spot Bitcoin ETF and expectations of a Bitcoin halving event, but in the end, there was little impact on its price. As net inflows of Bitcoin ETFs have recently slowed, and risk aversion has been intensified by external factors such as tension in the Middle East and delays in interest rate cuts anticipated by the Federal Reserve, Bitcoin has fallen 13% from its peak in March, and the transaction price is around $64,214.
Copper price tests 10,000 US dollars
BHP Group Ltd. (BHP Group Ltd.), the world's largest mining company, bought Anglo American Plc (Anglo American Plc) for $39 billion, mainly its South American copper mines, highlighting the bullish prospects for copper. The move coincided with a 16% rise in copper prices this year, underscoring the aggressive strategies of large resource companies to use this metal. Metallic copper is critical to the transition to a green industry, and is expected to face long-term shortages and rising prices.
Company news
Alphabet's first-quarter earnings beat expectations and made a $70 billion share buyback
Alphabet's first-quarter revenue jumped 15% and announced its first dividend of 20 cents per share while buying back $70 billion in shares, thanks to profitable growth in its main business lines. In after-market trading, Alphabet's stock price once rose 13%, increasing its market value by more than 250 billion US dollars and breaking through 2 trillion US dollars, joining the “Big Seven” Microsoft (Microsoft), Apple (Apple), and Nvidia (Nvidia). Alphabet's capital expenditure rose to $12 billion, exceeding expectations of $10 billion. Chief Financial Officer Ruth Borat said the company will spend at least this amount each quarter for the rest of the year.
Stimulated by demand for artificial intelligence, Microsoft's sales and profits exceeded expectations
The company said in Thursday's earnings report that revenue for the third quarter ended March 31 increased 17% to US$61.9 billion, with profit per share of US$2.94. Analysts on average estimated earnings of $2.83 per share and revenue of US$60.9 billion. Azure's revenue increased 31% this quarter, higher than the average forecast of 29%, and slightly rebounded from the 30% increase in the previous quarter. About 7% of this increase was due to artificial intelligence, compared to 6% in the previous quarter.
Tesla switches to low-cost cars, Mexico and India plant plans stall
Tesla announced that it plans to use existing plants to produce new, cheaper cars by the end of this year, and has delayed recent investments in new plants in Mexico and India. The leading electric vehicle manufacturer aims to increase production by 50% from current capacity before expanding production facilities. Despite not meeting quarterly financial targets, Tesla's prudent growth strategy led to a 12% post-market rise in the face of market uncertainty. Investors and analysts believe that the company's decision to optimize its existing business rather than expand significantly was a positive response to market conditions.
A sharp drop in Meta earnings reports triggered a $400 billion sell-off in tech stocks
Meta Platforms Inc. (Meta Platforms Inc.)'s weaker-than-expected sales expectations and increased capital expenditure plans made technology investors uneasy, causing the Nasdaq 100 Index (Nasdaq 100 Index) to drop sharply by 2%, and the market value evaporated by about $400 billion. Despite Meta's investment in artificial intelligence, the company's poor prospects have raised doubts about the potential returns of such technology and raised concerns about excessive expectations from other leading tech companies.
Important economic data for the week
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