23 May

Intel is changing the vector of development. The Japanese index reached a 33-year-high

May 23, 2023

By JustMarkets

The US stock indices traded multidirectional yesterday. By the close of the stock market Dow Jones Index (US30) decreased by 0.42%, S&P 500 (US500) was up by 0.02%. The Technology Index NASDAQ (US100) gained 0.50% on Monday.

The uncertainty in the financial markets still remains. On the one hand, there is still no decision by politicians concerning the US government debt increase. On the other hand, the FOMC is divided on whether to raise the interest rate in June by another 0.25% or to stop the tightening cycle. At the moment, the CME FedWatch tool shows a 75% chance that the US Fed will keep interest rates unchanged next month. But a week ago, there was a 95% chance of that scenario.

On Monday, Intel Corp. (INTC) revealed some new details about the artificial intelligence (AI) computing chip it plans to introduce in 2025. The company plans to radically change its development strategy to compete with Nvidia (NVDA) Corp. and Advanced Micro Devices (AMD) Inc. At a supercomputer conference in Germany on Monday, Intel said its future Falcon Shores chip would have 288 gigabytes of memory and support 8-bit floating-point computing. These specifications are important for artificial intelligence models like ChatGPT services.

Yesterday, China banned some sales of Micron Technology Inc (MU) chips to key industries in its country, citing national security concerns. MU shares fell more than 3%.

Equity markets in Europe also traded without a single dynamic yesterday. German DAX (DE30) decreased by 0.32%, French CAC 40 (FR40) lost 0.18% on Monday, Spanish IBEX 35 (ES35) was up by 0.57%, British FTSE 100 (UK100) closed positive 0.18% yesterday.

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The European Central Bank needs to raise interest rates some more and then leave them in restrictive territory for a while to bring inflation down to its medium-term target of 2%, Spanish Central Bank Governor Pablo Hernández de Cos said Monday. Investors expect the ECB to raise borrowing costs above 4% by the end of the summer.

Analysts at UBS are forecasting gold prices rising to $2100 an ounce by the end of 2023 and to $2200 an ounce by the end of 2024 as the reasons are given for the preservation of increased geopolitical risks and high inflation.

Oil prices rose Monday in response to a more positive tone in negotiations between the White House and its congressional Republicans to raise the US national debt ceiling before the June 1 default deadline. Higher demand and gasoline prices have also influenced energy trade sentiment ahead of the upcoming Memorial Day celebration on May 29, which unofficially marks the start of summer car travel in the United States.

European gas prices, which have been falling in recent weeks, are expected to remain low amid record-high supplies of liquefied natural gas by US exporters. European Union gas supplies are safe for the summer, and it is too early to tell if the EU will be able to prevent price shocks in the winter.

Asian markets were mostly up yesterday, except for the Australian index. Japan’s Nikkei 225 (JP225) gained 0.90% on the day, China’s FTSE China A50 (CHA50) jumped by 1.11%, Hong Kong’s Hang Seng (HK50) gained 1.17% on the day, India’s NIFTY 50 (IND50) added 0.61%, and Australia’s S&P/ASX 200 (AU200) was negative 0.22% on the day.

Japan’s Nikkei 225 reached a 33-year high. Japanese stocks have been on the rise over the past two weeks, boosted in large part by strong seasonal reports and bets that the Bank of Japan will maintain its ultra-loose policy. Data on Tuesday showed that the country’s manufacturing sector rose unexpectedly in May, while service sector growth hit a record high, indicating some resilience in the world’s third-largest economy.

S&P 500 (F) (US500) 4,192.63 +0.65 (+0.016%)

Dow Jones (US30)33,286.58 −140.05 (−0.42%)

DAX (DE40) 16,223.99 −51.39 (−0.32%)

FTSE 100 (UK100) 7,770.99 +14.12 (+0.18%)

USD Index 103.26 +0.06 +0.06%

Important events for today:
  • – Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
  • – Australia Services PMI (m/m) at 02:00 (GMT+3);
  • – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
  • – Japan Services PMI (m/m) at 03:30 (GMT+3);
  • – Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
  • – Eurozone French Manufacturing PMI (m/m) at 10:15 (GMT+3);
  • – Eurozone French Services PMI (m/m) at 10:15 (GMT+3);
  • – Eurozone German Manufacturing PMI (m/m) at 10:30 (GMT+3);
  • – Eurozone German Services PMI (m/m) at 10:30 (GMT+3);
  • – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
  • – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
  • – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
  • – UK Services PMI (m/m) at 11:30 (GMT+3);
  • – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
  • – US Services PMI (m/m) at 16:45 (GMT+3);
  • – US New Home Sales (m/m) at 17:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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