Nvidia on top of the cap world, UK inflation hits the mark

It didn’t take long for Nvidia to move from second to first in market capitalization in the world. Only two weeks. After climbing to the second step of the podium instead of Apple, it is now the leader Microsoft who has fallen. Up 3.5% on Tuesday in New York, the graphics chip maker’s market capitalization is $3.335 billion, outstripping Microsoft by about $20 billion. The iPhone maker is worth $3.290 billion.

Market capitalization of Nvidia (green), Microsoft (blue), and Apple (red) as of June 18, 2024. FactSet.

Year-to-date, Nvidia has gained 174%, still under the influence of the deep transformation of the technology industry towards artificial intelligence, which has pushed the biggest companies to use Nvidia products as the backbone of their development in this matter. ” Investors are trying to ride the Nvidia bandwagon as long as they can said Ken Mahoney of Mahoney Asset Management.

Consumer laziness, but the Fed keeps its cool

The S&P 500 and Nasdaq Composite hit new all-time highs, also supported by hopes that the Federal Reserve will soon loosen its monetary policy. May’s weak retail sales data illustrated signs of weariness among US consumers – a key driver of growth – which could encourage the Fed to cut interest rates. “ The data clearly reflects a shift in the behavior of consumers who are becoming more conservative, feeling the pressure of high interest rates and the depletion of savings. (accumulated during the pandemic, editor’s note), commented Rodrigo Catril, strategist at National Australia Bank. Importantly, we expect this trend to continue in the coming quarters “.

All members of the central bank, who spoke at various events yesterday, reminded that more evidence of a slowdown in inflation is needed. At 3.3% for one year in May, it is still too far from the target.

UK inflation returns to 2%

However, in the UK, the annual consumer price index reached the 2% target set by the Bank of England in May for the first time since July 2021. A slowdown of three-tenths from April is in line with consensus. Services inflation, closely watched by the BoE due to its dominance in the UK economy, rose to 5.7% from 5.9% in May. But the central bank is expected to keep its key rate at 5.25% at its meeting tomorrow, having said earlier that a return to target inflation was not enough on its own to start a new phase of its monetary cycle. Economists polled by Bloomberg expect him to make the first of two rate cuts planned for this year in August. Money markets are hawkish and are not considering a cut until November.

European stock markets are expected to be close to their closing levels this Wednesday, and activity is also expected to be limited due to a lack of direction from Wall Street, closed for “June”, which commemorates the emancipation of slaves in the United States.

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