Category: investing.com

Mizuho analysts have upgraded Amazon (NASDAQ:AMZN) to a Top Pick for the second half of 2023, citing accelerating demand for AWS’ generative AI products and services. Channel checks showed that AWS clients are shifting their savings from optimization to Gen-AI, which is both revenue and margin accretive.

The analysts believe that AWS revenue growth will likely trough in this quarter before starting a rebound in the second half of the year. They also expect a multiple expansion as concerns on AMZN’s AI-market-position diminish.

In a client note, the analysts said, “Case studies show that AWS wins over clients on intelligence privacy and data security. Furthermore, Gen-AI is priced meaningfully higher than conventional computing, so it is both revenue and margin accretive.”

As a result of the upgrade, the analysts raised the Amazon stock target to $160 per share. Amazon stock is up 0.6% in premarket Wednesday.

Kelleher said UBS would be “very selective” in taking on Credit Suisse staff, adding that the bank would be “very careful” in its approach. He said UBS would be looking for “people who fit the culture” and that the bank would have an “incredibly high bar” for those it takes on.

rnrnThe UBS chairman also said the bank would be looking to make sure it was not taking on any “toxic” assets from Credit Suisse. He said UBS would be “very careful” in its approach to the integration of the two banks, and that it would be looking to ensure that the culture of UBS was maintained.

Investors are keeping a close eye on the markets today as ongoing debt ceiling negotiations fail to make progress and the minutes of the last Federal Reserve meeting are due to be released. The Dow Futures contract is down 115 points, or 0.3%, S&P 500 Futures traded 13 points, or 0.3%, lower and Nasdaq 100 Futures dropped 37 points, or 0.3%.

Treasury Secretary Janet Yellen has said the “X-date”, when the government runs out of money to pay its bills, could fall as soon as June 1. Investors are also becoming wary of the Federal Reserve continuing its hiking cycle, even after Chairman Jerome Powell hinted at a pause in June.

Oil prices rose sharply Wednesday after industry data registered a chunky drop in U.S. inventories, pointing to tighter supplies as the U.S. driving season draws nearer. Gold futures traded 0.2% higher to $1,978.60/oz, while EUR/USD edged 0.1% lower to 1.0755.

Friday sees the release of the April personal consumption expenditure index reading, the Fed’s preferred inflation gauge. Additionally, there are more earnings to digest Wednesday, including from department store Kohl’s, chipmaker Nvidia, cloud computing company Snowflake and clothing retailer American Eagle Outfitters.

Urban Outfitters (NASDAQ:URBN) surged in pre-market trading Wednesday after the retailer reported quarterly results that beat Wall Street estimates. The company reported earnings of 56 cents on revenue of $1.11 billion, compared with estimates for 36 cents on revenue of $1.09B. The beat on the bottom line was helped by a 260 basis points improvement in gross profit rate, driven by higher markups and a decrease in inventory levels. Wells Fargo analysts said URBN delivered “one of the most surprising Q1 prints this EPS season” and raised the price target by $5 to $30 per share. Barclays analysts also raised the recommendation on Urban from Equal-weight to Overweight with a price target of $38.00. The strong results and positive analyst sentiment have sent the stock soaring in pre-market trading.

The U.S. debt ceiling impasse is causing ructions in the short end of the debt market, with Tuesday’s $35 billion auction of 21-day cash management bills requiring a whopping 6.2% high yield. This, combined with surprisingly buoyant soundings on global business activity and some spiky inflation readouts, has caused talk of further Federal Reserve tightening to return.

Wall St stock indices fell back more than 1% on Tuesday and futures remain in the red ahead of Wednesday’s open. Asian and European bourses have also fallen by similar amounts.

The pressure on the Bank of England to tighten further has mounted after news that Britain’s stubbornly high inflation rate fell by less than expected last month and a closely watched measure of core price rises surged to a 31-year high. Money markets are now pricing a rise in BoE policy rates rising another 75 basis points to 5.25% by September.

The artificial intelligence frenzy will be tested with results from chipmaker NVIDIA later on Wednesday. Minutes from the Federal Reserve’s most recent Federal Open Market Committee meeting will also be released, as well as speeches from Federal Reserve Board Governor Christopher Waller, European Central Bank President Christine Lagarde, and Bank of England governor Andrew Bailey.

The U.S. Federal Trade Commission (FTC) is investigating whether baby-formula makers, including Abbott Laboratories (ABT), Reckitt Benckiser (RBGLY), and Nestlé (NSRGY), have colluded on bids for state contracts. The regulator is looking into whether the companies have “engaged in collusion or coordination with any other market participant regarding the bidding” for state contracts. The Wall Street Journal reported on the FTC’s documents published in April. Other agencies have also launched probes in recent months, including the Justice Department. In January, the FTC approached Abbott and asked for information about bidding for the state infant-formula supply contracts. The outcome of the investigation is yet to be seen.

The Cayman Islands Monetary Authority (CIMA) is taking action after the U.S. Federal Deposit Insurance Corporation (FDIC) seized deposits held at Silicon Valley Bank’s (SVB) branch in the territory. According to a government official, CIMA is exploring legal options to address the situation.

The FDIC seized the deposits after SVB failed to comply with the agency’s requirements for foreign branches. The FDIC has been working with SVB to resolve the issue, but the bank has yet to meet the agency’s standards.

The seizure of deposits has caused concern among the Cayman Islands’ financial institutions, as it could have a negative impact on the territory’s reputation as a financial hub. CIMA is working to ensure that the situation is resolved quickly and that the Cayman Islands’ financial sector remains stable.

The FDIC and SVB have yet to comment on the situation. It remains to be seen how the situation will be resolved and what impact it will have on the Cayman Islands’ financial sector.

JPMorgan is advising its clients to increase their exposure to cash and gold, while reducing their exposure to equities and bonds. The bank’s analysts believe the equities rally is “misplaced” given the market’s failure to price in the risk of failure to raise the debt ceiling. They cite elevated recession risk, stretched valuations, high rates, and tightening liquidity as key reasons for their stance. As a result, they increased JPM’s cash allocation by 2% and cut exposure to stocks and bonds by 1% each. They also rotated from energy to gold, citing its safe-haven demand and potential as a debt ceiling hedge. Investors should take note of JPMorgan’s advice and adjust their portfolios accordingly.

BEIJING (Reuters) – China has been scaling back its purchases of Micron Technology (NASDAQ:MU) chips for years, opting instead for domestic or South Korean options, documents showed. This week, China declared Micron’s products a national security risk and blocked key industries from using them.

The Reuters review of over a hundred public government tenders found that while previously Chinese government authorities regularly put out purchase requests for Micron’s chips, such requests dried up dramatically from 2020. Instead, the bulk of memory chip purchases from such entities have gone to domestic firms including Huawei Technologies, server maker Inspur as well as surveillance giants Uniview and Hikvision.

Analysts say the biggest U.S. memory chip maker had become an easier target if Beijing wanted to retaliate against Washington’s curbs on tech exports, given China’s own advances in memory chip production.

China’s cyberspace regulator, which conducted the review of Micron’s products, did not specify what security risks they found. In response to Reuters’ request for comment, a Micron spokesperson said the company was “assessing next steps” in response to the ban.

China has for over a decade had a long-running campaign to reduce reliance on foreign technologies, asking state affiliated firms such as banks to switch to local software and promoting domestic chip manufacturing. This week’s ban appears to be the result of heightened Sino-U.S. tensions, but the tender documents suggest Beijing had laid the groundwork for years.

On Monday, Micron forecast a percentage hit to revenue from China’s action in the single digits.

Meta Platforms Inc suffered a setback on Wednesday after the European Court of General ruled that the European Commission’s requests for information related to its investigation into Facebook’s data and online marketplace were legitimate. The Commission had sought information from Meta, prompting the company to compare the competition enforcer to a fishing super trawler vacuuming up data.

The court found that Meta had not successfully demonstrated that the request for documents went beyond what was necessary or that establishing a virtual data room failed to protect sensitive personal data. Meta said it had handed over more than a million documents since 2019, even as it questioned the necessity and proportionality of the data requests.

Meta can appeal on points of law to the EU Court of Justice, Europe’s highest. The cases are T-451/20 Meta Platforms Ireland v Commission & T-452/20 Meta Platforms Ireland v Commission.