Weekly Market Update - 24 June 2024
Nvidia’s Rise
Nvidia became the world’s most-valuable company, fueled by a relentless rally that has propelled the semiconductor giant’s market value over its megacap tech peers. Shares rose 3.5% Tuesday, putting its market value at about $3.3 trillion and catapulting it over Microsoft and Apple. Nvidia is seen as the biggest and earliest beneficiary of AI as it dominates the market with its highly sought-after chips. Microsoft, for its part, is also seen as an early AI winner given its partnership with OpenAI, which created ChatGPT. The latest tech rally sent the S&P 500 closer to the 5,500 milestone, hitting its 31st all-time high of 2024 on the eve of a US holiday. Bonds climbed as traders piled into a $13 billion sale of 20-year Treasuries.
Source: Bloomberg
TSMC
Asian equity futures signal a breather for stocks in the region a day after the MSCI Asia Pacific Index hit a three-week high and following a holiday in the US. Among the companies that will likely be in focus is Taiwan Semiconductor Manufacturing Co., whose market capitalization is nearing $1 trillion. Goldman Sachs, Citigroup and Morgan Stanley are among Wall Street banks that lifted price targets for TSMC this week, citing surging AI-related demand and potential price hikes in 2025 to drive up earnings. JPMorgan says TSMC may “lift its 2024 revenue guidance and potentially move up its capex to the higher end of the guidance range,” and it expects AI to contribute 35% of total sales by 2028.
Source: Bloomberg
Japanese Yen
The yen capped its longest losing streak since March and closed at a fresh 34-year low, ramping up the risk that Japanese officials will once again step in to prop up the currency. On Thursday, the yen fell for a sixth-straight session, the worst stretch of losses in three months, to end the day just shy of 159 per dollar — its weakest closing level since April 1990. Its weakest intraday point this year, 160.17 per dollar, is within sight. That level, reached in April for the first time in more than three decades, preceded an intervention from policymakers. The yen’s weakness comes amid a persistent divergence in yields between Japan and its major peers, including the US. The Bank of Japan declined to lay out details of a reduction in bond buying at its June meeting; without a timeline, traders are left wondering when Japan will normalize its policy.
Source: Bloomberg