Good morning. Here's what happened overnight and what you need to know today.
1.
Nvidia on top: Nvidia has overtaken Apple and Microsoft to become the world's most valuable company, fuelled by an AI frenzy and following a recent back-and-forth jostling among the three tech giants. Nvidia's shares rose as much as 4% on Tuesday, US time, bringing its market capitalisation over USD3.3 trillion ($4.9 trillion). The semiconductor giant’s stock has surged by two fifths in the past month and over 160% this year, driven by high demand for its AI chips, which are essential for data centres and complex computing tasks. “This is animal spirits now, it’s human emotion taking over,” Ted Mortonson, a tech strategist at Baird, told the Financial Times. “Nvidia is a fantastic company, don’t get me wrong. There are lots of drivers [for the stock]... but 40 per cent in a month, that’s not normal.” In recent weeks, Nvidia briefly surpassed Apple in market value for the first time since 2002. The two companies have since traded places, with Apple briefly reclaiming the top spot last week. Analysts are now predicting a race to the USD4 trillion market capitalisation between Nvidia, Apple, and Microsoft. (Bloomberg) (Financial Times)
2.
Yields rally: US Treasuries rallied as traders increased the odds of two Federal Reserve rate cuts this year, following weaker-than-expected May retail sales data indicating cooling consumer demand. The US Census Bureau reported retail sales, excluding vehicles, decreased by 0.1%, against economists' forecast of a 0.2% rise. Yields, which move in the opposite direction to bond prices, declined across the maturity spectrum after the release. Two-year Treasury yields fell by nearly 0.08 percentage points to below 4.69%, and the yield on the 10-year Treasury dropped by 0.06 percentage points to 4.22%. “Even a modest slowdown in consumption growth, and consequently GDP growth too, could be enough to tip a finely balanced [Federal Reserve] in favour of a rate cut in September,” Paul Ashworth from Capital Economics told Bloomberg. Market-implied odds of a quarter-point rate cut at the September meeting edged up to 68%, with a rate cut fully priced in for November and a total of 0.48 percentage points of easing anticipated by year-end. (Bloomberg)
