| | | | | | | | Data is provided by |  | *Stock data as of market close, cryptocurrency data as of 4:00pm ET. Here's what these numbers mean. | - Stocks: The S&P 500, Nasdaq, and Dow Jones all tumbled into the red today after Fed officials indicated that there could be a rate hike later this year (more on that below).
- Commodities: Gold fell after the Fed voted to keep rates steady today, with oil prices largely unmoved, even after Trump threatened to bomb Iran if it did not “behave.”
- Bonds: Treasury yields jumped thanks to the Fed hinting at the possible rate hike.
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The Fed may have announced a decision regarding interest rates today, but that was the least newsworthy part of Kevin Warsh’s first press conference as Fed Chair. The Federal Open Market Committee voted to keep the benchmark federal funds rate target the same—at a range of 3.5% to 3.75%—for the fourth consecutive meeting, even as inflation continues to accelerate. But since that was all but assured before today’s 2pm announcement, investors were far more focused on Warsh himself. BlackRock Chief Investment and Portfolio Strategist Gargi Chaudhuri said in a note earlier today, “The more important question is how Chair Warsh frames inflation, AI, and the future path of rates during his first press conference.” But based on today’s announcement, analysts may have to squint to read any tea leaves. Warsh is switching things up Warsh is already putting his own tight-lipped spin on the FOMC process, starting with the announcement itself. The statement that the Fed released today had only 141 words; far shorter than the 300+ featured in the last two under Jerome Powell’s tenure. (Here’s a side by side comparison.) The statement also omitted how specific members voted, and offered far less information on where the Fed thought policy could be going next. Warsh kicked off today’s press conference by indicating that it would not be business as usual at the Fed under his reign: - Warsh likes task forces (or at least saying “task forces”). He announced five Fed task forces focused on reforming the institution, adding that the squads will hire specialists to “ask hard questions” in five areas: The Fed’s balance sheet, communications, data sources, productivity and jobs, and inflation frameworks.
- He also indicated that the Fed will keep 2% as its target inflation number.
The more things change, the more they stay the same Fed officials have grown increasingly concerned about inflation in the wake of the Iran war, despite the central bank indicating in March that it would slash rates by the end of the year. While Warsh was considered to be a rate hawk as a Fed governor during the financial crisis, he’s changed his tune since being nominated by Trump. Today’s dot plot, completed by 18 of the 19 members of the FOMC—Warsh himself sat this one out—painted a markedly different picture than in March. This time, nine officials expected the Fed’s benchmark interest rate to be higher by the end of the year (compared to zero in March), eight projected that rates will be unchanged, and only one said rates would be lower. For his first major step to the mic, Warsh seems to have chosen the mystique of the mute button.—LB | | |
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🟢 What’s up - Furniture company La-Z-Boy gained 14.67% as retail sales climbed 11% in its fiscal fourth quarter.
- Aehr Test Systems popped 7.37% after receiving a follow-on order from a major silicon photonics customer serving hyperscale datacenters.
- Figma rose 3.76% after Citigroup initiated coverage with a Buy rating, citing a large untapped market opportunity.
- SharonAI Holdings jumped 10.92% after securing $1.6 billion in financing to expand AI datacenter capacity across the Asia-Pacific region.
- UniQure soared 78.44% after the FDA cleared a path for the company to seek approval of its Huntington’s disease gene therapy.
- Intel gained 3.46% as the chipmaker prepared trial runs of its next-generation manufacturing process.
- Robinhood Markets jumped 8.78% following its workforce reduction announcement yesterday.
What’s down - SpaceX fell 4.95%, marking its first decline since its record-setting IPO (having surged nearly 50% in its first three trading days).
- Lionsgate Studios dropped 6.18% after Netflix denied reports that it was interested in acquiring the studio.
- AT&T slipped 3.04% following the announcement of a CFO transition that renewed investor scrutiny of its fiber-expansion plans.
- CME Group declined 3.46% after naming company insider Lynne Fitzpatrick as its next CEO, succeeding longtime chief Terry Duffy.
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Two months ago, Allbirds announced it was trading sneakers for servers. Today, the company formally completed the transition, selling its footwear business to American Exchange Group and rebranding as Smartbird—a name that somehow sounds even more AI-generated than the strategy itself. The pivot follows years of net income losses and product missteps that left the once-buzzy brand struggling to stay relevant. As Smartbird, the company plans to help middle-market businesses manage the nuts and bolts of AI computing, sourcing GPUs, deploying servers, and keeping the hardware running. To fuel the effort, it also doubled its convertible financing facility to $100 million. The company appointed advanced-computing veteran Nadia Carlsten as president and CEO, replacing Joe Vernachio, who had been brought in just two years ago to help save the sneakers. Apparently, a new name and CEO were enough to get investors excited. Shares jumped 39.09% today—a welcome rebound for a stock that had fallen roughly 77% since the original AI pivot announcement (which sent shares soaring nearly 600% in a single day). Of course, building an AI infrastructure company is harder than changing a logo. Then again, in a market where just adding the letters “AI” can add billions in value, why settle for the Magnificent Seven when you can invest in the Magnificent Bird?—SY |
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Just as gas prices are easing up, car sales are hitting a rough patch. BMW shares skidded 3.99% today after the German luxury automaker slashed its profit margin to just 1% (down from 6%) this year due a slowdown in Chinese demand and lingering aftershocks from the Middle East conflict. JPMorgan analyst Jose Asumendi called the “radical earnings cut” a “wake-up call for the auto industry,” raising doubts about whether making premium cars in Europe to export to China was a viable strategy anymore. BMW’s not the only one struggling to map a new route. Used-car king CarMax beat Q1 expectations on earnings and revenue. But its stock still slid 9%, after the company warned about pressure on margins after new CEO Keith Barr teased turnaround plans to “reimagine” its business but held out on details. Add to that the Fed keeping rates elevated, which stalls car loans and purchases, and it’s no surprise investors are impatient. Carvana’s new playground Meanwhile, CarMax rival Carvana is no longer just selling clunkers from massive vending machines. Over the past year, the company has snapped up seven new-car dealerships that primarily sell Stellantis brands Chrysler, Dodge, Jeep, and Ram. And not a moment too soon, since Stellantis has been a wreck of collapsing sales and cratering stock. But with Carvana behind the wheel, things seem to be turning around. In its Casa Grande, AZ store—which used to sell 30 to 50 vehicles per month—Carvana jacked up sales to 700 in May, making it Stellantis’s bestselling store nationwide. One breakout store doesn’t prove that the formula travels, but it’s a start. Carvana’s Dallas store rolled out a Disney-esque “playground” where customers test-drive new vehicles. And instead of having salesmen breathe down their neck and haggle on price, customers simply scan a QR code, buy online, and get the car delivered to their door. New cars represent just a sliver of Carvana’s business, but it could be one of “the most disruptive forces that auto retailing has seen in the US market in decades,” automotive analyst John Murphy told CNBC. That’s a big claim, given that the company built its name on not needing physical stores at all. Not to mention, new-car sales are far more regulated than the used-car market, where almost anything goes—meaning Carvana’s model may be harder to scale than it looks. But one survey by Cox Automotive found that customers dig Carvana’s hybrid approach of in-store road-tests and online ordering. Car salesmen: time to start looking for a new gig.—JD | | |
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It’s a big-deal lifestyle. Buildout, true to their name, built something big. To see how brokerage teams can move from fragmented tools to a single AI-powered solution that carries data and workflow from first contact all the way to closing, watch their latest on-demand session here. | |
- At the G7, international leaders praised the US-Iran preliminary deal, which could be signed as soon as tomorrow. Here’s what’s in the draft text of the agreement.
- US retail sales beat forecasts in May, jumping nearly 1% to $763.7 billion, driven partly by higher gas prices.
- These businesses say the US economy is shutting them out.
- A sign of the times? Silicon Valley has started playing a party game where tech elites…pretend to murder each other.
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Earnings: Kroger Company and Accenture both report Q2 performance. Economic reports: As we do every Thursday, we’ll get the initial jobless claims report. Other stuff: The US Open golf championship tees off, while the G7 summit rolls on. |
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