—— U.S. Consumer Confidence Drops Again; U.S. Home Price Growth Slows; Nvidia Rebounds, Boosting Stock Market; Federal Reserve Officials See Need for Interest Rate Cuts; Rivian Secures $5 Billion Investment from Volkswagen; FedEx Raises Forecast, Stock Soars
1. U.S. Consumer Confidence Drops Again
Data released by the U.S. government today shows that the Consumer Confidence Index dropped from 101.3 to 100.4 this month, slightly above the economists’ forecast of 100.
Consumers’ outlook for the economy over the next six months also declined by nearly 2 points to 73, primarily due to pessimism regarding the business environment, job market, and income growth.
For the past few years, consumer confidence has remained low, impacted by high living and loan costs, as well as signs of weakness in the employment market.
Only 12.5% of consumers believe the business environment will improve over the next six months.
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2. U.S. Home Price Growth Slows
The S&P Case-Shiller Home Price Index rose by 6.3% year-on-year in April, down from 6.5% in March, signaling a slowdown in the rate of price increases, though home prices remain at historically high levels.
Brian Luke, managing director of S&P Dow Jones, stated that this summer will be the hottest season for the housing market, and prices will face significant tests.
Redfin data reveals that as of June 16, the proportion of sellers offering discounts reached its highest level since November 2022, which is good news for buyers.
Many lower-quality homes have appeared on the market, providing opportunities for buyers willing to invest in renovations.
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3. Nvidia Rebounds, Boosting Stock Market
Today, Nvidia, after losing $430 billion in market value, finally rebounded by over 6%, leading the U.S. stock market rally.
Following the U.S. issuance of $69 billion in 2-year Treasury bonds, prices remained strong due to solid demand. On Wednesday, the U.S. is expected to issue $70 billion in 5-year Treasury bonds.
Experts at Independent Advisor Alliance believe that the current bull market is unlikely to reverse unless the Federal Reserve shifts from cutting rates to raising them or if the U.S. economy enters a recession.
The S&P 500 reached 5,465 points, and the Nasdaq also rose by 1% led by Nvidia.
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4. Federal Reserve Officials See Need for Interest Rate Cuts
Federal Reserve Committee member Lisa Cook stated that she expects inflation to continue easing this year and recover more quickly by 2025. She emphasized the necessity of interest rate cuts to ensure economic balance, although the exact timing remains unclear.
Lisa projected that inflation will fall in the next 3 to 6 months, but the process will not be smooth. However, inflation could drop significantly by 2025, with a reduction in apartment rents being a major contributing factor.
Lisa also noted that loan default rates are not yet at a level of concern.
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5. Carnival Cruise Line Stock Soars
Cruise operator Carnival’s CEO Josh Weinstein revealed that bookings for the company’s cruises in 2025 have surged, prompting the company to raise its net profit forecast for fiscal 2024 by $275 million to $1.55 billion, exceeding analyst expectations of $1.37 billion.
Following this announcement, Carnival’s stock surged 9.3%, marking its largest gain in a year.
Carnival was the top performer in the S&P 500 index today, followed by competitors Norwegian Cruise Line (+6%) and Royal Caribbean Cruises (+3.6%).
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6. Rivian Secures $5 Billion Investment from Volkswagen
Volkswagen (VW) announced a $5 billion investment in Rivian to form a joint venture, providing a crucial lifeline for the struggling electric vehicle company.
Volkswagen will invest $1 billion directly in Rivian and continue to invest an additional $4 billion, with both companies holding equal stakes in the joint venture. The collaboration will focus on producing the next generation of electric vehicles using advanced software.
Following the announcement, Rivian’s stock surged over 30% in after-hours trading.
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7. FedEx Raises Forecast, Stock Soars
Today, FedEx raised its full-year profit forecast, surpassing Wall Street’s expectations. The company’s cost-control measures and expansion of gross margin strategies are showing results.
FedEx now expects its net profit per share for fiscal year 2025 to be between $20 and $22, exceeding the analyst consensus of $20.85.
In recent years, FedEx has laid off thousands of employees and plans to cut 2,000 more jobs in Europe.
Following the announcement, FedEx’s stock surged 9%.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.