Macro trends
US consumer inflation returns to a downward trend as demand cools
The US CPI fell from 3.50% in March 2024 to 3.40% in April. In April 2024, the US core consumer price index rose 3.60% year on year, down from 3.80% in March.
US retail sales data stagnated after being revised downward in previous months
Retail sales in the US stagnated in April, and growth data for the previous two months were revised downward, indicating that high borrowing costs and rising debt are prompting shoppers to be more cautious. The value of retail purchases not adjusted for inflation changed little compared to the previous month, rising 0.6% after the March correction. Bloomberg's survey of economists predicted a median value of 0.4%. Excluding cars and gasoline, sales fell 0.1%.
Funding trends
David Tepper boosts Alibaba, hedge funds look for bargains in China
Billionaire investor David Tepper (David Tepper) increased his holdings of hard-hit Chinese stocks last quarter while reducing his holdings in ambitious US tech companies. At a time when there was a record gap in the valuations of the two markets, Tepper led hedge fund managers to slowly heat up against China.
According to a regulatory document, Taper's Appaloosa Management more than doubled its investment in Alibaba Group in the first three months of this year, making the Chinese e-commerce giant the largest position in its $6.7 billion stock portfolio. The fund also increased its holdings in PDD Holdings and Baidu Inc. (Baidu Inc.), and added JD.com (JD.com) and two Chinese-listed trading funds in the third quarter. As of the end of the previous quarter, Chinese stocks and ETFs accounted for 24% of the fund's stock portfolio.
The MSCI China Index (MSCI China Index) has soared nearly 30% since its January low, as government-backed funds stepped in to support the market and the Chinese government's economic stimulus plan began to take effect.
FMS investors are net optimistic about the “old economy” sector (energy, materials, industry) for the first time in more than a year
Investors have invested $12 billion in Bitcoin ETFs, but since the January listing, the flow of funds has clearly slowed
Torke says the increase in aluminum prices is “excessive” due to a recovery in supply
Henry Van (Henry Van), a metal analyst at Trafigura Group (Trafigura Group), expects aluminum prices to drop by at least 6% over the next six months, as rising supply and high interest rates dampen manufacturing demand. Van said at CRU World Aluminum Conference in London that the current demand outlook is bleak and hinted that recent price increases are unsustainable. London Metal Exchange (London Metal Exchange) three-month copper has risen 8% this year, and he expects the price to return to the previous range of $2,100 to $2,400 per ton, especially as consumption outside of China is expected to decline.
Company news
Walmart's Earnings Exceed Expectations, E-Commerce Sales Grow Sharply
The quarterly earnings and revenue announced by Walmart on Thursday exceeded expectations and achieved significant growth in the e-commerce sector. New businesses such as advertising boosted profit growth and won the favor of more high-income shoppers.
The major retailer said it is currently expected to be higher or slightly higher than previous full-year guidance. In the three months ending April 30, Walmart's net profit jumped to 5.1 billion US dollars, or 63 cents per share, compared to 1.67 billion US dollars, or 21 cents per share in the same period last year. Revenue increased 6% from US$152.3 billion in the same period last year.
Reddit reaches content collaboration with OpenAI, and stock prices soar
OpenAI has reached an agreement with social media platform Reddit to use the platform's content for its artificial intelligence chatbot, a move that boosted the company's stock price by 15% in after-hours trading.
Thursday's announcement is the latest in a growing number of deals between media brands and OpenAI as they compete for high-quality, reliable data to support powerful new artificial intelligence models. Meanwhile, OpenAI is fighting copyright lawsuits from publishers, and some publishers don't want chatgpt to use their content.
The agreement allows OpenAI to access content on the Reddit website and allows social media platforms to embed more artificial intelligence tools.
Snowflake plans to buy Reka AI for $1 billion
Cloud data analytics company Snowflake Inc. is reportedly in talks to acquire Reka AI, a startup focused on large-scale language models, for more than $1 billion to enhance its generative artificial intelligence products. Reka AI was founded by former Google and Meta researchers in 2022 and is valued at $300 million in 2023. The acquisition is in line with Snowflake's strategic expansion after their venture capital division invested in Reka and recently launched their own large-scale language model, Arctic, which enables customers to integrate third-party artificial intelligence technology such as Reka into Snowflake's platform.
Shifting to e-commerce and artificial intelligence in domestic competition, Alibaba recorded the highest profit since 2021
Alibaba Group Holdings experienced its most profitable year since 2021, with net profit rising 10% to reach RMB 79.7 billion (US$11 billion), exceeding analysts' expectations and last year's profit. Despite increased domestic competition and an 8% increase in revenue to RMB 941.2 billion, the company has refocused its focus on core e-commerce and technology sectors. This is the first time that financial reports have been announced since co-founder Joe Tsai (Joe Tsai) became the chairman in September last year.
TSMC's stock price surged 42%, limiting the weight of some funds
Due to its leading position in producing advanced chips for artificial intelligence, TSMC's stock price has soared 42% this year, making it the first choice for investors. However, the stock's rapid growth poses a challenge to funds subject to restrictions on holding a single share, such as those that comply with UCITS regulations, which have an exposure limit of 10%. As a result, some funds are unable to further increase their holdings in TSMC and are considering selling some of their shares, causing investors such as BNP Paribas Asset Management to seek other investment opportunities and invest in companies that are several generations behind TSMC in technology.
Important economic data for the week
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