Stock Market Report: Inflation Data, Nvidia AI Chip Delay, and Stocks to Watch
Stock Market Report: June 13, 2023
Top Stock Market News
Inflation Data Boosts Hopes for Fed Rate Pause
The stock market received a boost on Tuesday as new data indicated that inflation eased last month to around half of last year's peak level. The Consumer Price Index (CPI) rose 4% in May from a year earlier, down from 4.9% in April and marking the smallest annual increase in over two years. This slowdown in inflation has bolstered speculation that the Federal Reserve will pause its aggressive rate hike campaign, providing relief to the markets.
Nvidia Delays China Launch of AI Chip
Nvidia Corp. has delayed the launch of its new artificial intelligence chip in China due to the ongoing trade restrictions imposed by the United States. The company's highly anticipated H100 chip, designed for AI applications, was supposed to be available in China this month. However, Nvidia has decided to postpone the launch until the U.S. government clarifies its export control regulations. This move highlights the growing tensions between the U.S. and China over advanced technologies like AI and semiconductors.
Coinbase Stock Rallies, Virgin Galactic Slides
In the cryptocurrency space, Coinbase Global Inc.'s stock rallied after the company announced plans to restructure its operations and cut costs. On the other hand, Virgin Galactic Holdings Inc. saw its shares slide following news that the company's commercial spaceflight service will be further delayed due to technical issues.
Foot Locker's Missteps Lead to Downgrade
Foot Locker Inc. received a downgrade from analysts at UBS, who cited the company's missteps in adapting to changing consumer trends and the competitive landscape. The athletic footwear and apparel retailer has been struggling to maintain its footing amid increased competition from online retailers and direct-to-consumer brands.
Dow Jones Futures Rise, Nvidia Rival Leads Stocks in Buy Zones
Ahead of the market open, Dow Jones futures were trading higher, indicating a potential positive start for the day. Among the stocks in buy zones, a rival of Nvidia in the AI chip market was leading the pack, potentially benefiting from the delayed launch of Nvidia's H100 chip in China.
Top Stocks to Watch
Tesla Inc. (TSLA): Tesla's stock will be in focus today as the company holds its annual stockholder meeting. Investors will be watching for updates on the company's production plans, new models, and any potential news regarding CEO Elon Musk's legal battles.
Advanced Micro Devices Inc. (AMD): AMD is expected to announce a significant push into the AI chip market, taking on rival Nvidia. The company's strategy and product roadmap in this crucial sector will be closely monitored by investors.
AXA SA (AXA): According to Morningstar's premium analysis, AXA's tilt towards commercial insurance and technical income shows nascent positive signs, making it a stock to watch in the insurance sector.
CRH plc (CRH): CRH's recent $1.1 billion divestment reinforces its exposure to fast-growing end markets, according to Argus Research's premium analysis, potentially making it an attractive investment opportunity.
Johnson Controls International plc (JCI): With concerns growing about a spending slowdown that could temper sales during the upcoming holiday season, retailers like Johnson Controls International plc will be closely watched for any signs of weakness or resilience.
Stock Market Expected Movement
Based on the positive inflation data and the potential for a Fed rate pause, analysts expect the stock market to continue its upward momentum today. However, the ongoing trade tensions between the U.S. and China, as well as company-specific news, could introduce volatility.
Sectors that may benefit from the easing inflation include consumer discretionary, technology, and financials, as lower interest rates could boost consumer spending and borrowing. On the other hand, sectors like energy and utilities, which are traditionally sensitive to inflationary pressures, may experience some selling pressure.
Overall, traders and investors will be closely monitoring the market's reaction to the inflation data, company-specific news, and any potential developments related to the Fed's monetary policy stance.
It's important to note that the stock market is subject to constant fluctuations, and investors should exercise caution and conduct thorough research before making any investment decisions.
