On January 26th local time, the three major US stock indexes experienced mixed gains and losses, with the Dow reaching a new historical high and the S&P 500 and Nasdaq ending their six consecutive daily gains. As of the close, the Dow Jones Industrial Average rose 0.16%, the S&P 500 index fell 0.07%, and the Nasdaq fell 0.36%. This Wednesday, major stock indexes all recorded gains, with gains of 0.65%, 1.06%, and 0.94%, respectively. It is worth noting that Intel fell nearly 12%, marking the largest daily decline since July 2020.
In terms of economic data, the core PCE price index in the United States increased by 2.9% year-on-year in December 2023, reaching a new low since March 2021, lower than expected and previous levels, enhancing the possibility of an economic soft landing. At the same time, the market has lowered its bets on the Federal Reserve's interest rate cut in March. The market focus is shifting towards next week's Federal Reserve January monetary policy meeting.
According to multiple sources cited by the media, Musk's artificial intelligence startup xAI is seeking $6 billion in funding from global investors to challenge OpenAI.
The US stock market closed with mixed gains and losses, and the Dow Jones index hit a new high
On January 26th local time, the three major US stock indexes experienced mixed gains and losses, with the Dow reaching a new historical high and the S&P 500 and Nasdaq ending their six consecutive daily gains. As of the close, the Dow Jones Industrial Average was at 38109.43 points, up 0.16%; The S&P 500 index closed at 4890.97 points, a decrease of 0.07%; The Nasdaq closed at 15455.36 points, a decrease of 0.36%.
This Wednesday, major stock indices all recorded gains, marking the third consecutive week of gains. Among them, the Dow Jones Industrial Average rose 0.65% this week, the S&P 500 Index rose 1.06%, and the Nasdaq rose 0.94%.
On Friday, the Dow Jones Industrial Average rose as high as 38215.31 points, and the S&P 500 Index rose as high as 4906.69 points, both reaching historic intraday highs.
In terms of economic data, the core PCE price index in the United States increased by 2.9% year-on-year in December 2023, marking a new low since March 2021, with an expected 3.0% and a previous value of 3.2%; The core PCE price index in the United States increased by 0.2% month on month in December 2023, reaching a new high since September 2023, with an expected 0.2% and a previous value of 0.1%.
Personal spending in the United States increased by 0.7% month on month in December 2023, reaching a new high since September 2023, with an expected 0.5% and a previous value of 0.2%. In December 2023, personal income growth slightly decreased to 0.3%, consistent with the forecast. In addition, the monthly rate of actual personal consumption expenditure has risen for the second consecutive month, increasing by 0.5%. As the main supporting factor for consumer spending, actual disposable income increased by 0.1%, the smallest increase in three months.
The economic data released on Thursday further consolidated the market's upward momentum, with the initial annualized quarterly growth rate of US real GDP for the fourth quarter of 2023 recording a 3.3% increase. Although it slowed down from 4.9% in the previous quarter, it far exceeded market expectations of 2%; The US economy grew by 3.1% throughout the year.
Faced with a series of strong economic data, Lael Brainard, Director of the National Economic Commission (NEC) at the White House, said she expects consumer confidence to continue to improve, and strong employment data will continue to drive growth.
Brainard believes that the core inflation rate has remained around 2% in the past six months, while the PCE growth rate in GDP reports has been below 2%. This sign suggests that although prices may rebound, the worst period has passed and a "soft landing" is just around the corner.
Forexlive analysts pointed out that yesterday's weak overall inflation data in GDP data has sparked widespread speculation about a decline in overall PCE in December 2023. However, the service sector inflation, which excludes energy and housing, closely monitored by the Federal Reserve, rose 0.3% month on month, accelerating from last month's 0.1%. This has dampened market expectations for interest rate cuts and may help boost the US dollar.
Peter Cardillo, Chief Market Economist at Sparta Capital Securities, said that the PCE data is good. Inflation is below 3% year-on-year, which is reassuring as the inflation rate is moving towards the Federal Reserve's target of 2%. Strong personal spending will keep the Federal Reserve calm and cautious about cutting interest rates as soon as possible. The first interest rate cut may occur in the mid to late third quarter. Based on Thursday's GDP data, this report strengthens the possibility of a soft landing, which continues to receive support.
After the release of economic data, short-term interest rate futures in the United States fell, and traders reduced their bets on the Fed's rate cut. The Federal Reserve will hold a two-day monetary policy meeting next Tuesday and Wednesday (January 30-31).
According to the Chicago Mercantile Exchange's Federal Reserve observation tool, the probability of the Federal Reserve maintaining interest rates in the range of 5.25% to 5.50% in February is 97.4%, and the probability of a 25 basis point rate cut is 2.6%. The probability of maintaining interest rates unchanged in March is 52.6%, the probability of a cumulative 25 basis point rate cut is 46.2%, and the probability of a cumulative 50 basis point rate cut is 1.2%.
Intel plummeted nearly 12%
In terms of sectors, the eleven major sectors of the S&P 500 index rose seven times and fell four times. The energy sector and healthcare sector led the way with gains of 0.76% and 0.59% respectively, while the technology sector and real estate sector led the way with declines of 1.05% and 0.37%, respectively.
Large tech stocks have fluctuated, with Intel falling nearly 12%, the largest daily decline since July 2020; Microsoft, Apple, and Nvidia saw a slight decline. Naifei rose by over 1%, while Google A, Amazon, and Facebook parent companies Meta and Tesla saw slight gains.
Intel fell 11.91%, and the performance guidance released after hours on Thursday fell far short of expectations. The company's financial report shows that Intel's revenue for the fourth quarter of 2023 was $15.41 billion, higher than analyst expectations, with a year-on-year increase of 10%. Among them, the revenue of the data center was 4 billion US dollars, a year-on-year decrease of 10%, lower than the average expectation of 4.08 billion US dollars; The revenue of the PC chip business was 8.84 billion US dollars, a year-on-year increase of 33%, higher than the analyst's estimate of 8.42 billion US dollars.
However, Intel expects its revenue range for the first quarter of 2024 to be between $12.2 billion and $13.2 billion, far below the average forecast of $14.25 billion by Wall Street analysts.
Intel CEO Pat Gelsinger stated that the company's two core businesses, personal computers and servers, are experiencing seasonal sluggish demand, and non core businesses such as its autonomous driving and automotive chip company Mobileye are also facing difficulties. The company has orders worth $2 billion for its AI chips, and it is expected that sales will improve in the second half of this year.
Intel CFO David Zinner stated that he has reduced costs by $3 billion last year and is looking for ways to further control costs. He expects to further improve efficiency by 2024.
Wells Fargo Bank has lowered Intel's target price from $52 to $48, maintaining a "neutral" rating.
Tesla rose 0.34% and fell 13.64% this week. On the news, Musk was asked if Tesla plans to purchase AMD chips and replied, "Yes.". Musk talked about the AI chip procurement plan in the X post.
Most popular Chinese concept stocks fell, with the NASDAQ China Golden Dragon Index falling 0.45% and a cumulative increase of 3.87% this week. Weibo fell more than 2%, Pinduoduo, iQiyi, New Oriental, and NetEase fell more than 1%, while Bilibili, Baidu, Xiaopeng Motors, Ideal Motors, and JD.com saw a slight decline; NIO and Tencent Music rose by over 1%, while Vipshop and Alibaba saw a slight increase.
Intended to challenge OpenAI Musk's artificial intelligence startup seeking $6 billion in financing
According to the Financial Times, multiple sources have reported that Musk's artificial intelligence startup xAI is seeking $6 billion in funding from global investors to challenge OpenAI.
According to sources familiar with the situation, xAI has been showing goodwill to billionaires and investors around the world in recent weeks.
According to insiders, Musk hopes to raise up to $6 billion in funds for xAI with a proposed valuation of $20 billion. Negotiations are still ongoing, and Musk is still testing investor interest in investing.
One of the insiders said that Morgan Stanley is currently coordinating this financing. The bank declined to comment. The scale of this financing reflects the enormous cost required to develop generative artificial intelligence.
OpenAI, a competitor of xAI, raised about $13 billion from Microsoft alone, while other startups such as Anthropic and Cohere also raised billions of dollars from top venture capital groups such as Google, Amazon, and Silicon Valley.
According to a document submitted by xAI to the US Securities and Exchange Commission (SEC) in December last year, the company is seeking to raise $1 billion from equity investors. The document shows that xAI had already raised $135 million from the target at that time.
Musk's xAI launched its first product in December 2023, a chatbot called Grok, which is being trained using social media posts on X to provide more up-to-date answers than its competitors.
Musk was a founding investor of OpenAI, but he left in 2018 due to disagreements with CEO Sam Altman. In July 2023, he founded his own artificial intelligence company and complained that competitors such as OpenAI, Microsoft, and Google were reviewing their AI products and not paying enough attention to security measures.