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Federal Reserve expected to skip June rate hike, but then what (00:40)? Google (GOOG) (GOOGL) delays European start of Bard AI chatbot over privacy concerns – report (01:57). Bud Light (BUD) no longer top-selling beer in U.S. as boycott dents sales – report (02:27).
This is an abridged transcript of the podcast.
The Federal Reserve is widely expected to keep its key rate unchanged after core CPI inflation stalls at 5.3% Y/Y as expected. Google reportedly delays the European start of its Bard AI due to privacy concerns and when you watched the NBA championship this week or the Stanley Cup last night, data shows you were less likely to be drinking anything by BUD.
With the Federal Reserve widely expected to keep its key rate unchanged at 5.0%-5.25% today after 10 straight hikes, investors will focus on the central bankers’ statement for any inkling of guidance for its intentions at the July meeting.
Tuesday Fed members received new information, the consumer price index (CPI) report for May.
That report showed a Y/Y deceleration in both the headline number and the core CPI figure. On a M/M basis, headline CPI edged up 0.1% in May from April, less than +0.2% expected and decelerating from the +0.4% gain in April.
Wells Fargo’s Sarah House said the data should mean no rate hike for the current meeting but they’re expecting “Chair Powell’s press conference and the latest Summary of Economic Projections to signal that one more rate hike is still in the cards.”
At the last meeting, the Federal Open Market Committee kept the door open for a rate increase at future meetings when it said “additional policy firming may be appropriate to return inflation to 2 percent over time.”
Any changes to that wording will let markets know which way the Fed may be leaning — toward another “skip” to assess data or toward resuming a path of tightening.
Google (NASDAQ:GOOGL) will have to delay the start of its AI chatbot Bard in Europe after its main regulator raised some privacy issues.
According to a Politico report, The Irish Data Protection Commission said Tuesday that Google (GOOGL) hadn’t provided enough data about how Bard protects European privacy to allow for its European debut.
In late March Bard rival ChatGPT, which is backed by Microsoft (MSFT), was temporarily banned in Italy over privacy concerns.
Bud Light is no longer the top selling beer in the U.S. after being dethroned by Modelo.
Bud Light is by Anheuser Busch InBev (BUD) and Modelo is by Constellation Brands’ (STZ).
This follows a boycott of the Bud Light brand since April over a controversial ad campaign featuring social media influencer and trans activist Dylan Mulvaney.
The Wall Street Journal reported that Modelo accounted for 8.4% of beer sales by U.S. retailers in the four weeks ended June 3, compared with Bud Light’s 7.3%.
Bud Light sales slid 24% Y/Y in the week ended June 3. Sales of other (BUD) brands have also taken a hit.
In the ratings summary on Seeking Alpha. Wall Street says BUD is a buy, Seeking Alpha analysts and the quant rating say its a hold.
Just last week Quad 7 Capital wrote on Seeking Alpha that the damage done to BUD looks permanent. They rate the stock a hold.
Other headlines to look out for on Seeking Alpha:
Nvidia crosses $1T market cap powered by the rise of AI
Netflix to debut first pop-up restaurant in LA
Stellantis recalls over 300,000 vehicles over coil installation issue
Crude oil rallies on China stimulus, raising hopes for stronger energy demand
Deeper Dive: Investor exodus from ESG investing
Starwood Capital considers selling more than 2,000 single-family rental homes – report
Atlantic Equities moves to sidelines on PayPal amid competition concerns
US judge temporarily blocks Microsoft from completing Activision deal
Disney delays `Avatar,’ `Star Wars,’ Marvel movies
On our catalyst watch for the day, Shell (SHEL) will hold its Capital Market Day event. The oil giant is expected to discuss capital returns, dividend payouts, and strategies to improve profitability. And BlackRock (BLK) will host a five-hour Investor Day event.
The Nasdaq (COMP.IND) advanced 0.8%. The Dow (DJI) added 0.4%. The S&P 500 (SP500) gained 0.7%.
All 11 S&P sectors finished in positive territory, with the exception of Utilities. Materials gained more than 2% while Energy gained more than 1%.
Treasury yields were higher. The 10-year yield (US10Y) was up 6 basis points to 3.83% while the 2-year yield (US2Y) was up 8 basis points to 4.67%.
Now let’s take a look at the markets as of 6:20 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are mixed. The Dow is down 0.2%, the S&P 500 is up 0.15% and the Nasdaq is up 0.2%. Crude oil is up 1% at more than $70 a barrel. Bitcoin is down 0.7%.
In the world markets, the FTSE 100 is up 0.5% and the DAX is up 0.5%.
On today’s economic calendar, the FOMC will release its policy decision at 2pm and 30 minutes later we’ll hear from Jerome Powell.
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