The seven-day pass? Although symbolic (+0.07%), the S&P 500 ended its sixth consecutive session in the green last night, its longest bullish streak since January. The Nasdaq 100 also reached a new high after comments from Jerome Powell, who told the Senate that the US economy was no longer overheating, paving the way for rate cuts. Rate swaps continue to reflect two rate cuts in 2024, while according to the Fedwatch barometer, investors are now counting on a quarter-point cut in interest rates in September by more than 73%.
In the bond market, the US 10-year yield eased 1.2bp to 4.284% while the two-year yield, more sensitive to monetary policy, fell 0.4bp to 4.622%, close to a three-month low. “We are in a position for a steepening of the curve,” Nicola Mai, an analyst at Pimco, said in an interview with Bloomberg TV. “This year or early next year, we should achieve this ‘deinversion’ of the curve for several reasons. First, rates should start to come down. I also think the long end of the curve will remain elevated because of fiscal concerns.”
The Fed chief is due to speak to Congress again this Wednesday, more precisely to the House Financial Services Committee. In addition to Jerome Powell’s new statement, operators are also waiting for the publication of CPI inflation for June on Thursday, which could directly influence the American central bank. Thursday will also mark the start of the publication of second-quarter results across the Atlantic, with the accounts of JPMorgan Chase, Citigroup and Wells Fargo expected on Friday.
The euro/dollar parity reaches $1.0820. A barrel of Brent is trading at $84.9. An ounce of gold is trading at $2,374 and Bitcoin is up 1.5% at $58,430.
Values
* Microsoft has given up its observer seat on OpenAI’s board, which had attracted the attention of regulators on both sides of the Atlantic, with the tech giant saying its presence has been made obsolete by the artificial intelligence (AI) company’s significantly improved governance. The US group held a non-voting seat on OpenAI’s board last November, when Sam Altman took over as CEO of the startup that created the ChatGPT software. The seat allowed Microsoft to attend OpenAI board meetings and access confidential information. The merger between the two companies, which also resulted in an investment of more than $10 billion by Microsoft, had raised concerns from competition authorities in Europe, Britain and the United States. Microsoft cited new partnerships, innovation and customer growth since Altman’s return as reasons for abandoning the headquarters.
* Oracle. Elon Musk’s artificial intelligence startup xAI and the cloud-integrated solutions giant have ended talks on a potential $10 billion server deal, The Information reported. The two companies had hoped to expand an existing agreement in which xAI leased Nvidia’s AI chips from the cloud computing vendor, the report said, citing several people involved in the discussions. xAI is building a system using Nvidia’s H100 graphics processors “for faster execution time,” the billionaire said in a post on his “X” platform. The specific capability Oracle was discussing with xAI has been outsourced to another customer, a source familiar with the matter told Reuters. “The company is still in discussions with customers on future capabilities and continues to engage with xAI on its infrastructure needs,” the source said. A multi-year deal to lease Nvidia processors from Oracle for a supercomputer project was in the works, but negotiations were hampered by issues including Musk’s demands to build a supercomputer faster than Oracle thought possible, the trade journal said. Oracle also expressed concern that xAI’s preferred location lacked sufficient power, the report added.
* Blackstone. Spanish gas network operator Enagas will sell its 30% stake in U.S. pipeline company Tallgrass Energy to Blackstone Infrastructure Partners for $1.1 billion. The deal is expected to close in late July. Tallgrass operates pipelines, storage facilities and terminals throughout the U.S. Midwest, transporting up to 10.3 billion cubic feet of natural gas and 700,000 barrels of oil per day.
* Chipotle Mexican Grill announced that Jack Hartung will step down as chief financial officer on March 31, 2025, and will be replaced by Adam Rymer, who has been with Chipotle for 15 years and most recently served as vice president of finance.
