Weekly News Recap 24 – 28 June 2024

News for 24 June 2024

Gold Awaits Rebound in a Narrow Range

At the end of last week, the gold price weakened significantly, closing at $2,322/oz. The cause was the announcement of the U.S. Manufacturing and Services PMI figures, which came in higher than expected at 51.7 and 55.1, respectively. Additionally, the dollar index surged to 105.83, with the strengthening dollar putting pressure on gold prices.

However, the downside for gold appears to be limited, given the increasing possibility and intensity of potential conflicts.

Semiconductor Stocks in the U.S. Begin to Correct – Tesla Plans 20% Workforce Reduction

Tesla has initiated a significant reduction in its workforce in 2023, bringing its global headcount down to 121,000 employees, including temporary staff. This indicates that Tesla, the leading electric vehicle manufacturer in the U.S., has reduced its workforce by more than 14% this year. Bloomberg reports that Elon Musk aims to cut the workforce by 20%.

Meanwhile, last Friday (June 21), semiconductor stocks experienced a sharp decline. NVIDIA, Qualcomm, and Broadcom Inc. saw their stocks drop by -3.22%, -1.36%, and -4.38%, respectively. The decline in semiconductor stocks is attributed to their strong performance earlier this year, leading to overvaluation compared to other sectors. Additionally, the market lacks new supportive factors. FedWatch data indicates that the financial markets are adjusting to a 58% chance that the Federal Reserve will cut interest rates by 0.25% in September. It is also expected that the Fed will cut interest rates twice this year, which has been gradually factored into the market, thus pressuring stock prices.

News for 25 June 2024

Gold Continues to Fall This Morning

On June 24, the gold price rebounded, closing at $2,334/oz. This was due to the dollar index weakening to 105.48, with the weaker dollar supporting a rise in gold prices.

However, on June 25 at 9:00 PM, the U.S. Consumer Confidence Index is set to be announced, with expectations at 100.0. It is predicted that gold prices are establishing a base above the $2,300/oz level.

Apple Stock Closes Higher – Shrugs Off EU DMA Violation Allegations

On June 24th, the stock price of Apple Inc. rose by more than 0.3%, despite the European Commission (EC), the executive body of the European Union (EU), announcing on June 25th that its preliminary investigation found Apple to be in violation of the EU’s Digital Markets Act (DMA).

Previously, in March, the EC opened investigations into Apple, Alphabet Inc., and Meta Platforms, Inc. under the DMA regarding the violation of “anti-steering rules.” Under the DMA, technology companies are prohibited from blocking businesses from informing consumers about cheaper alternatives or subscriptions outside the App Store.

News for 26 June 2024

Gold Eyes Rebound if It Holds Above $2,300/oz

On June 25, the gold price weakened, closing at $2,319/oz. This was due to the U.S. Consumer Confidence Index coming in higher than expected at 100.4, along with the dollar index rising to 105.62. The stronger dollar put pressure on gold prices.

Looking ahead, on June 26 at 9:00 PM, the U.S. New Home Sales figures are set to be announced, with expectations at 636k.

China Approves Novo Nordisk’s Wegovy Weight Loss Drug – Eli Lilly’s Approval Expected by Year-End

On June 25, Novo Nordisk announced that its weight loss drug Wegovy had been approved in China, paving the way for its launch in the world’s second-largest economy. A 2020 study by Chinese public health researchers predicted that the number of overweight adults in China would surge to 540 million by 2030, a 2.8-fold increase from 2000. Additionally, the number of obese individuals is expected to rise 7.5 times to 150 million.

Earlier, in March, Novo Nordisk stated that initially, it would target the weekly injectable drug at Chinese patients willing to pay out-of-pocket.

Furthermore, Novo Nordisk faces competition from Eli Lilly. Analysts predict that Eli Lilly’s weight loss drug Zepound, which contains the same key ingredient, could be approved in China this year or, at the latest, in the first half of 2025.

News for 27 June 2024

Gold Weakens Below Support but Remains Steady

On June 26, gold prices weakened, breaking below a key support level to close at $2,298/oz. This decline was driven by Federal Reserve members indicating that if U.S. inflation does not decrease, the Fed might keep interest rates high for a longer period. Consequently, the dollar index rose, closing at 106.04, with the stronger dollar putting pressure on gold prices.

On June 27 at 7:30 PM, the U.S. GDP figures are set to be announced, with an expected growth rate of 1.4%, along with durable goods orders, which are anticipated to decline by 0.5%.

The recent decline in gold prices has led to a sideways down outlook, with support at $2,290/oz and resistance at $2,310/oz.

Volkswagen Invests $5 Billion in EV Company Rivian, Boosting Stock by 23%

Earlier this week, the German automaker Volkswagen Group and the American electric vehicle (EV) manufacturer Rivian announced a joint venture with equal ownership. Volkswagen will invest up to $5 billion in Rivian to share EV architecture and software. This news caused Rivian’s stock price to soar nearly 40% over the past five trading days.

Rivian’s CEO, RJ Scaringe, told Reuters that this investment will provide the necessary funds for the company to develop the smaller and more affordable R2 SUV, slated for early 2026, as well as the planned R3 crossover. Additionally, the investment will help Rivian achieve positive cash flow. According to the agreement, Rivian will allow the joint venture to utilize its existing intellectual property rights, benefiting Volkswagen’s lineup, including brands like Audi, Porsche, Lamborghini, and Bentley.

If Rivian meets certain milestones, Volkswagen will invest an additional $2 billion in Rivian stock, with $1 billion each in 2025 and 2026, and provide a $1 billion loan in 2026.

News for 28 June 2024

Gold Expects Dollar to Potentially Rise Further

On June 27, gold prices rebounded strongly, closing at $2,327/oz. This was due to the dollar index weakening from 106.06 to 105.92, with the weaker dollar supporting a rise in gold prices.

Looking ahead, on June 28 at 7:30 PM, the U.S. Core Personal Consumption Expenditures (PCE) inflation index is set to be announced, with expectations at 0.1%.

Currently, gold prices appear to be forming a triple bottom pattern, indicating a potentially improving outlook.

Amazon Plans to Sell Low-Cost Chinese Products to Counter Temu and Shein

Amazon is planning to launch a new section of its website focused on low-cost fashion and lifestyle products, allowing Chinese merchants to ship products directly to U.S. consumers.

The storefront announced during a mid-week meeting for invited Chinese sellers, aims to counter the growth of competing e-commerce platforms Temu and Shein from China.

According to a presentation seen by CNBC, the storefront will feature a variety of unbranded products, many priced under $20. The storefront model showcases items such as Gua Sha facial massage tools, weighted arm sleeves, and phone cases, among a range of other products.