Weekly News Recap 10 – 14 June 2024

News for 10 June 2024

Gold Rebound Fails to Break Resistance, Confirming Downtrend

At the end of last week, gold prices weakened, closing at $2,293/oz. The decline was due to the U.S. non-farm payroll numbers exceeding expectations at 272k, causing the dollar to rise to 104.93. A stronger dollar put pressure on gold prices.

News for 11 June 2024

Gold Breaks Resistance but the Upside is Expected to be Limited

On June 10th, gold prices rebounded, closing above the key resistance level at $2,310/oz. This was due to the dollar index slightly pulling back from 105.38 to 105.10, with the weaker dollar supporting the rise in gold prices.

However, the recovery in gold prices is starting to be limited. Specifically, there is support at $2,300/oz and resistance at $2,320/oz, as the market is closely watching the upcoming inflation numbers and the FOMC meeting in the U.S. on June 12th.

Latest Data from CME Group’s FedWatch Tool

Investors are now predicting that the Federal Reserve will delay its first interest rate cut of the year to November, instead of the previously expected September. This adjustment comes after the U.S. revealed stronger-than-expected May employment numbers.

Apple Unveils ‘iOS 18’ with Advanced Apple Intelligence – No Surprises Lead to Pressure on AAPL Stock

At the WWDC24 event on June 10, Apple introduced iOS 18, a major update featuring increased customization options. Apple Intelligence is integrated throughout iOS 18, built with privacy in mind from the start, ready to unlock new ways to enhance user writing and communication with Writing Tools. The key changes include:

  • Photos App: A new customizable view with the biggest design overhaul yet, making it easier for users to find and revisit special moments in a simpler, familiar grid format.
  • iMessage: More powerful with new effects to add emphasis to text, making conversations more vibrant.
  • Mail App: Enhanced with new ways to manage the Inbox and stay updated, including categorization to organize and filter personal and important emails.
  • Safari: The fastest browser in the world, now with iOS 18 bringing easier web information discovery through Highlights and a redesigned Reader experience. Safari will use machine learning to pull important information from web pages.
  • New Privacy Features: Locked and hidden apps provide users with peace of mind, ensuring that private data like notifications and app content remain unseen by others unintentionally.

The absence of groundbreaking surprises in the announcement led to downward pressure on Apple’s stock (AAPL).

News for 12 June 2024

Gold Awaits U.S. Inflation Data

On June 11, gold prices rose, closing at $2,316/oz. This increase was driven by escalating tensions in the Middle East after Houthi rebels attacked a cargo ship in the Red Sea, boosting demand for gold as a safe-haven asset.

On June 12 at 7:30 PM, the U.S. May inflation index will be announced, with expectations set at 3.4%.

The U.S. inflation index is expected to gradually weaken within the range of 3.2-3.4%. Additionally, the market is anticipating that the Federal Reserve might cut interest rates in Q3-Q4 2024, providing a mild supportive factor for gold.

Crude Oil Prices Form Sideway Down Pattern from Late April to End of May

Crude Oil prices decreased from $82 per barrel to $80 per barrel, with the average price for the month expected to be around $78.50 per barrel. This suggests that the U.S. inflation trend may gradually decline, which is seen as a positive factor for stocks and indices.

UBS-Credit Suisse Merger Set in Switzerland by July 1st

On June 11, the chairman of UBS Switzerland mentioned in an interview with the Neue Zuercher Zeitung newspaper that the merger between UBS and the Swiss operations of Credit Suisse is expected to be completed by July 1st. Customers will begin migrating to UBS’s IT system in 2025.

Reuters reported that UBS’s acquisition of Credit Suisse will leave Switzerland with only one global bank, whose balance sheet is about twice the size of the country’s annual economic output. Additionally, the CEO confirmed that there will be 3,000 job cuts in Switzerland as part of the overall merger process.

Apple to Launch “Vision Pro” in China, Japan, and Singapore by End of June

On June 11th, Apple announced that it will start selling the Vision Pro, a Virtual Reality (VR) headset, in China, Hong Kong, Japan, and Singapore on June 28th. Pre-orders will commence this Friday, June 14th.

Previously in February, Apple debuted the Vision Pro in the United States with prices starting at $3,499. In China, one of Apple’s most significant markets, the Vision Pro will be available starting at 29,999 yuan (approximately $4,190).

In China, Apple must comply with stringent government regulations regarding content. Popular apps like Disney+ and Amazon Prime Video, which are available on the Vision Pro in the United States, will not be accessible in China due to these regulations.

News for 13 June 2024

Gold Rebounds but Still Faces Resistance

On June 12th, gold prices increased, closing at $2,324/oz. This rise was attributed to the U.S. May inflation index contracting lower than expected at 3.3%. Additionally, anticipation of a potential interest rate cut by the Fed later this year could relax the market, leading to a decrease in the dollar index to 104.68, which supports higher gold prices.

On June 13th at 7:30 PM, the U.S. Producer Price Index (PPI) is expected to be announced with a forecast of 0.1%.

Summary of the FOMC Meeting

This summarizes the key outcomes and discussions from the recent FOMC meeting held on June 11-12 :

  • The FOMC decided to maintain the target range for the federal funds rate at 5.25-5.5% and to continue with the plan for gradual balance sheet reduction (QTTapering).
  • The Fed Dot Plot adjusted its interest rate projections for 2024 from 4.875% to 5.125% (one rate cut) and for 2025 from 4.02% to 4.125% (four rate cuts).
  • Core PCE inflation projections were revised to 2.8% for 2024 and 2.3% for 2025, reflecting higher-than-expected inflation rates still above the 2% target.
  • The economy continues to expand at a robust pace with tight labor market conditions, though supply constraints are becoming more balanced.
  • The Fed remains committed to reducing inflation to the 2% target but acknowledges it may take longer than expected.
  • Monetary policy remains restrictive and appropriate given current economic conditions.
  • The Fed is prepared to maintain interest rates as necessary and stands ready to respond to weak labor market conditions.
  • Decisions on interest rate adjustments will depend on incoming economic data and risk balance.
  • During the Q&A session, Fed Chair Jerome Powell emphasized the importance of the strong labor market, highlighted through JOLTS (Job Openings and Labor Turnover Survey), noting its strength.
  • Regarding the possibility of interest rate cuts, Powell mentioned, “Rate cuts that may occur this year could happen next year.”

News for 14 June 2024

Gold Weakened as the Fed Cut Interest Rates Just Once This Year.

On June 13th, the price of gold softened to close at $2,304 per ounce due to the strengthening dollar index, rising from 104.63 to 105.23, putting pressure on gold prices.

On June 14th at 9:00 PM, the U.S. Consumer Confidence Index is expected to be 72.1.

Gold prices declined significantly. The price trend is sideways down, with support at $2,285/oz and resistance at $2,315/oz.

Tesla Raises Model 3 Prices – As EU Increases Import Taxes on Chinese EVs

Tesla announced that the company is likely to increase the price of its electric vehicle (EV) Model 3 in Europe starting from July 1st. This decision comes after the EU indicated it may impose temporarily higher import duties on EVs imported from China.

Tesla stated on its website, “The company may need to raise the price of the Model 3 EV starting July 1st, due to the EU’s additional import taxes on EVs manufactured in China and sold in Europe.”

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