US inflation cooled significantly in May — but it’s still not where the Fed wants it (2 min read) US inflation continued to cool in May as consumer prices rose at the slowest annual pace since March 2021. The Consumer Price Index (CPI) increased by 4% for the year and 0.1% from last month, lower than April's figures and below economists' expectations. Core CPI, which excludes food and energy, rose 5.3% annually and 0.4% on a monthly basis, aligning with economists' predictions. Although US inflation has slowed significantly, it still remains well above the Fed’s 2% target. The data is expected to impact the Fed's upcoming policy rate decision.
China Weighs Broad Stimulus With Property Support, Rate Cuts (4 min read) China is considering a wide range of stimulus measures to boost its economy, including support for the real estate market and domestic demand. The proposals include interest-rate reductions and measures to lower costs on residential mortgages. The stimulus plan is still being finalized and its scope is not yet known. The central bank's recent rate cut has sparked speculation about further cuts to policy rates. While efforts have been made to support specific sectors, skepticism remains about the effectiveness of monetary policy alone in reviving the economy.
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Business & Stocks
Oracle Pushes to Record High as AI-Frenzy Spurs Cloud Demand (3 min read) Oracle stock surged to a record high after announcing that its cloud computing business is expected to continue rapid growth in the coming year. The company reported a 54% increase in cloud sales last quarter, after jumping 45% in the previous period, and expects it to increase at least as much in 2024. Oracle has been focusing on expanding its cloud infrastructure business to compete with leaders like Amazon and Microsoft. The company's latest success in the cloud market has been mostly driven by the rising demand for generative AI.
FTC will try to block Microsoft’s acquisition of Activision Blizzard (1 min read) The Federal Trade Commission (FTC) plans to file for an injunction to block Microsoft's $68.7 billion proposed acquisition of Activision Blizzard. The FTC aims to halt the transaction before the deal's July 18 deadline. The judge's initial decision can be appealed to the full commission, and Microsoft can further appeal to a federal court if needed. Microsoft said it welcomes the opportunity to present its case in federal court. Both Microsoft and Activision's shares remained relatively unchanged after the news.
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Funds & ETFs
Superstar JEPI Loses Luster After Underperforming (2 min read) The JPMorgan Equity Premium Income ETF (JEPI), one of the most popular active US-listed ETFs, experienced a rare outflow of $147 million last week. While it may not seem significant compared to the fund's overall inflows of over $9 billion this year, it's worth noting that the outflows had been consistent for four straight days. JEPI's appeal lies in its low-volatility stocks and covered call strategy, but also the same reason why it has been underperforming the S&P 500 by nearly 10%. If the S&P 500 rally continues, more outflows from JEPI could be expected.
Tesla Fund on Track to Become First Single-Stock ETF to Top $1B (2 min read) The Direxion Daily TSLA Bull 1.5X Shares ETF (TSLL) is on track to become the first billion-dollar single-stock ETF, fueled by Tesla's fast recovery this year. With nearly $700 million in AUM and strong money flows, TSLL is currently far ahead of other single-stock ETFs. TSLL has gained over 219% since Tesla's low point in January. Another 15% to 20% rise in Tesla's stock, coupled with modest inflows, could push TSLL above the $1 billion AUM mark, which is a significant feat for a new ETF category.
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