Five Things You Need to Know to Start Your Day: Americas
By Morwenna Coniam
June 10, 2024 at 5:30 AM CDT
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Good morning. US stocks are set to follow European equities lower after a far-right surge in European elections poses a threat to political stability in France. The dollar is higher while treasuries are falling as attention turns to the Fed’s interest-rate decision on Wednesday. — Morwenna Coniam
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Europe sees far-right surge
The euro fell to its lowest in a month after ajump in support for the far right in European Parliamentary elections prompted French President Emmanuel Macron to call call a snap legislative ballot with the potential to throw the country into political chaos. German Chancellor Olaf Scholz’s Social Democrats also saw a crushing defeat amid gains for conservatives and far-right parties. European equities and French bonds also suffered losses.
Apple’s AI push
Though Apple was an early pioneer in AI, it’s now seen as a laggard — especially since ChatGPT and other cutting-edge technology hit the scene in the past two years. Its developers’ conference on Monday will show whether it can now become major player in the field. In a keynote speech, Apple is expected to lay out a suite of features it calls Apple Intelligence.
New York Fed losing ‘street cred’
The Federal Reserve Bank of New York has seen many senior-level departures, raising concerns about its diminished heft and “swagger.” It’s a worry because, historically, the bank has played a vital role in steering the financial system through crises. It’s now charged with withdrawing liquidity and, next year, will be crucial to spotting any early signs of potential turmoil as the US Treasury exhausts its statutory borrowing authority. Read more in today's Big Takehere.
Home costs surge
The cost of owning a home in the US has increased 26% since 2020, as expenses including taxes, insurance and utilities soared during a period of high inflation across the economy. The average annual outlay for owning and maintaining a typical single-family home — not including mortgage payments — totaled $18,118 in March, the personal finance website Bankrate found.
Later this week …
Attention this week will be focused on the US Federal Reserve’s interest rate decision on Wednesday, preceded earlier in the day by a report on consumer prices. While markets broadly expect central bankers to hold rates steady, the inflation print as well as Fed Chair Jerome Powell’s press conference will offer more clarity on how much the central bank may cut interest rates this year. Other economic data include jobless claims on Thursday, while in the corporate world, Tesla has its annual meeting.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
Trump will sit for a probation interview Monday following his conviction
Bloomberg’s survey found a UK Labour victory would be the best outcome for the pound
Elliott Investment Management has built an almost $2 billion stake in Southwest Airlines and plans to push for changes, the Wall Street Journal reported
Spain, Portugal, Greece are among the euro area’s fastest growing economies
ECB must wait for September to gauge next rate cut, Kazimir says
Euro drops with French bonds after election shocks
And finally, here's what Joe’s interested in this morning
On Wednesday, we get the FOMC decision, but it's not expected to be a particularly eventful one, though we will get a fresh dot plot.
From a market perspective, maybe it's just me, but if I had only been reading headlines over the last couple of weeks, I'm not sure I'd have expected the big indexes to be virtually at all-time highs.
There's been talk of softening consumption. Some major tech companies (particularly in software world) have been bombing after earnings. The labor market is slackening a bit. And yet, there's no real indication that rate cuts are anytime soon. And yet here we are, with the S&P 500 just 0.4% off its all time high made in the middle of last week. Zooming out, the index is up about 6% in the last 30 trading days. Not too bad.
https://www.bloomberg.com/news/newsletters/2024-06-10/five-things-you-need-to-know-to-start-your-day-americas