Market Movers

  • IBM takes another shot at Watson as A.I. boom picks up steam. IBM ($IBM) announced WatsonX, an all-in-one artificial intelligence-building tool for enterprises. The announcement comes about 15 months after IBM sold its Watson Health unit for an undisclosed amount following years of struggling with profitability. Now, IBM wants to help companies introduce AI into their business models.

  • Palantir stock soars 21%, says demand for AI unprecedented. The rally came after giving a strong earnings forecast and saying that demand for its new artificial intelligence tool* due this month is “without precedent.” The company posted a surprise profit in the first quarter and expects to stay in the black for the rest of 2023, which would be its first profitable year.

  • Saudi Aramco posts 19% drop in first-quarter profit. Analysts expected to see a dip in net profit this quarter compared to the previous year, as inflation and rising interest rates pressure global demand and stoke fears of a recession. Still, Aramco’s net income beat expectations of $30.5 billion, which was forecast by Reuters analysts.

  • Nintendo Switch sales plunge 22% and expects further declines. The Japanese gaming giant sold 17.97 million units of its flagship Nintendo Switch console series, roughly in line with its own forecast of 18 million units for the fiscal year. For the fiscal year ended March 2024, Nintendo forecast sales of 15 million units of the Switch.

  • LinkedIn lays off 716 employees, kills China jobs app. LinkedIn is laying off 716 workers worldwide and sunsetting its local Chinese app, InCareer, citing stiff competition and unfavorable macro headwinds. The company grew revenue 8% year over year for the most recent quarter, but CEO Ryan Roslansky emphasized a need to “manage expenses” in a memo to employees.
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What to Watch

  • Goldman Sachs joins Barclays in bet against Fed rate cuts this year. US interest-rate strategists at Goldman Sachs Group Inc. joined those at Barclays Plc saying the Federal Reserve will be less aggressive in cutting interest rates* this year than markets are predicting. Barclays last week recommended August fed funds futures short.

  • Chinese exports cool in latest warning sign on global trade. The figures add to signs of softness in global trade as spending slows in the U.S. and Europe. Consumers and businesses are confronting steepening interest rates, persistent inflation, and pockets of instability in the banking sector.* Many economists expect recessions in advanced economies later this year.

  • Tech companies continue mass layoffs amid economic woes. So far, the number of tech layoffs globally this year has exceeded the total number from a year ago. The running total of tech layoffs to date is 191,416, surpassing last year’s total of 164,576. Some experts warn that a U.S. recession is expected* as the Fed continues to raise its target interest rate to bring inflation under control.

  • Consumers expect mortgage rates to drop, so they’re feeling a lot more optimistic about the housing market, according to a Fannie Mae poll published Monday. After the U.S. Federal Reserve’s rate increase last week, the Fed Chair signaled a potential pause in hikes. Rates dipped after the news, and economists are expecting mortgage rates to gradually decline over the course of this year, and into 2024.

  • The FED will let inflation run. Jason Hartman thinks the Fed is going to pivot from their tightening plan and they are going to be forced to let inflation run. And with a low housing inventory situation, the Fed is going to give up on a tightening strategy. The banks can't withstand the pressure and things are about to break so they will be forced to push the U.S. into a formally declared recession. Source(37:57)

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