Dow Jones Industrial Average closes above 40,000 points for the first time, gold and copper hit new highs, silver and nickel surge, GME plunges again

The leading economic indicator of the American Chamber of Commerce fell by 0.6% month-on-month in April, weaker than expected and a decline of 0.3% from the previous value. Some analysts believe that this is the second consecutive month of decline for the index, indicating "serious resistance to US economic growth." Factors such as deteriorating consumer outlook on business conditions, weak new orders, and a decrease in new housing permits have exacerbated the decline.

In the Eurozone, inflation in April increased by 2.4% year-on-year, unchanged from March, strengthening market expectations for the European Central Bank to start cutting interest rates as early as June. Some analysts believe that the decline in European inflation this year will be faster than previously estimated, as the impact of the Red Sea conflict is smaller than expected. The European Commission stated that inflation is expected to return to the 2% target in the second half of next year, with several central bank policymakers praising the inflation easing process.

Federal Reserve Board member and policymaker Bowman reiterated that if US inflation cools or reverses its trend, he would be willing to support rate hikes. Due to his open attitude towards re-raising interest rates, the rapid increase in US bond yields reached a daily high.

Dow hits a new high and closes above 40,000 for the first time, Google hits a three-day high, and Didi soars 311%, Haidilao rises 53% intraday

On Friday, May 17th, US stocks opened slightly higher as a whole, but half an hour after the opening, the tech-heavy Nasdaq turned lower. The S&P 500 index failed to hold above 5,300 points, turning lower 40 minutes after the opening.

Before noon, major indices other than the Dow fluctuated between gains and losses, with the S&P turning higher again towards the end of the session, the Nasdaq approaching a full recovery of its losses, and the Dow, dominated by blue-chip stocks, extending its gains at the end of the session to close above 40,000 points for the first time in history, while small-cap stocks turned lower without reaching 2,100 points.

At the close, the Dow hit a historic high, rising 1.2% for the week and posting gains for five consecutive weeks. The S&P and Nasdaq both approached the historic highs set on Wednesday, with weekly gains of 1.5% and 2.1% respectively, marking the first four-week winning streak since February:

The S&P 500 index rose 6.17 points, or 0.12%, to 5,303.27 points. The Dow rose 134.21 points, or 0.34%, to 40,003.59 points. The Nasdaq fell 12.35 points, or 0.07%, to 16,685.97 points.

The Nasdaq 100 slightly declined, with the Nasdaq Technology Market Capitalization Weighted Index (NDXTMC) falling 0.27%, marking two consecutive days of decline from its all-time high, but posting weekly gains of 2.1% and 3.1% respectively.

The Russell 2000 small-cap index fell 0.03%, with a weekly gain of 1.7%. The "fear index" VIX fell by 3.5% to below 12, approaching the closing level of 11.75 on November 27, 2019, with a weekly decline of 4.54%.

Caption for the image: US stock indices posted weekly gains, with the Dow hitting a new high on Friday and closing above 40,000 points for the first time The information technology and real estate sectors led the market this week, with gains of 3% and 2.5% respectively. Following closely behind were the healthcare and communication services sectors, each with gains of 1.8% and 1.7% respectively. The non-essential consumer goods and industrial sectors performed the worst. However, the technology sector fell by 0.5% on Friday.

Morgan Stanley believes that a soft landing for the U.S. economy is still the most likely scenario, but has reduced the probability from 80% to 50%, expecting the S&P 500 to fall by 15% to 4500 points by the end of the year. Both Morgan Stanley and BlackRock expect the Federal Reserve to start cutting interest rates in September, with three rate cuts expected this year. Barclays has warned that potential stagflation and geopolitical risks may catch investors off guard.

Expectations for interest rate cuts have increased this week, with the market fully pricing in three rate cuts this year and two next year.

Most of the star tech stocks rose. "Metaverse" Meta fell by 0.3%, Amazon rose by 0.6% but remained near the low of the month, Apple rose to a near four-month high, Microsoft fell by 0.2% after hitting a new high for the month and falling for two consecutive days. Netflix rose by 1.7% to a one-month high. Google Class A rose by over 1%, rising for five consecutive days and hitting a new historical closing high for three consecutive days. Tesla rose by 1.5%.

Most chip stocks fell, but AMD rose by over 1%, rising for four consecutive days to a one-month high. The Philadelphia Semiconductor Index opened high and then fell, dropping by 0.7% and breaking below the 5000-point mark, falling for two consecutive days from a two-month high, but not far from the historical high set in early March, and up by 3.6% for the week. Nvidia fell by about 2%, continuing to move away from the high of about two months, but rose by 2.9% for the week and has risen for four consecutive weeks; the double long ETF for Nvidia fell by about 4%; Intel fell by 0.6% from a three-week high; Arm fell by over 3%, despite positive earnings, Applied Materials opened high by 2.5% but then fell by nearly 1%.

AI concept stocks had mixed performances. Palantir and C3.ai rose by nearly 1%, SoundHound.ai fell by 1%, Oracle rose by over 1%, rising for four consecutive days to a near six-week high, BigBear.ai fell by over 3%, AMD and Snowflake fell by nearly 2%, Silicon Valley AI infrastructure hardware unicorn Astera Labs fell by 0.7%, Alibaba ADR rose by over 4%, continuing the 7% gain from yesterday.

On the news front, there are reports that Snowflake is in talks to acquire Reka AI, a startup founded by Google and Meta researchers, for over $1 billion NVIDIA-backed AI cloud supply startup Coreweave has raised $750 million from investors including Blackstone, Carlyle Group, and BlackRock to drive artificial intelligence computing. Apple may plan to launch a significantly thinner and more expensive iPhone next year.

Microsoft plans to include the latest "Call of Duty" game in its subscription service next month, making significant adjustments to its video game sales strategy. The UK antitrust authority will no longer investigate Microsoft's collaboration with French startup Mistral AI, but the EU has requested Microsoft to provide full information on the risks associated with Bing search engine's generative AI function by the end of the month.

Chinese concept stocks outperformed the US market, but the gains narrowed towards the end of the session. ETF KWEB rose by 0.3%, CQQQ rose by 0.2%, the Nasdaq Golden Dragon China Index (HXC) rose by 1.7% before closing up 0.4%, hitting above 7000 points during the session, the highest in eight months since September last year.

Among popular stocks, JD.com rose nearly 3%, Baidu fell by nearly 2%, Pinduoduo and Alibaba rose by about 2%; Tencent ADR fell by 0.4%, Bilibili rose by 2.5%, Nio rose by 0.3%, Li Auto fell by over 1%, XPeng, which plans to launch its first flying car in 2026, rose by 0.4%. Haidilao's subsidiary, Haidilao International (HDL), surged by 53% at the highest on its US IPO debut day, closing up 14%. Faraday Future surged by 136% before a sharp decline triggering a circuit breaker, closing down by over 38%, still accumulating a gain of over 2100% this week.

The People's Bank of China introduced three real estate financial policies to stabilize the property market, causing Beike's US stocks to surge by over 9% in pre-market trading and Fangdd to surge by over 450%. After the opening, Beike rose by 7% before closing up nearly 2%, marking a seven-day consecutive increase to the highest level in 14 months; Fangdd surged by 412% at one point triggering a circuit breaker, achieving the largest increase since June 2020, and ultimately closing up by 311% to an eight-month high.

Other stocks with significant changes include:

The "American Reddit" favored by retail investors rose by over 17% before closing over 10%, reaching the third highest record since its listing in late March, reaching a cooperation agreement with OpenAI, with its content being introduced into products like ChatGPT, which can utilize forum data to train AI models.

The enthusiasm for retail investor concept stocks waned, with GameStation falling by nearly 20%, significantly narrowing its weekly gain from 271% to 27%, planning to issue up to 45 million Class A shares, stating that there have been no significant changes in financial conditions, but preliminary sales in the first quarter declined and fell short of expectations. AMC Theatres fell by over 5% on Friday, with its weekly gain also narrowing from 308% to 51%.

The American restaurant Cracker Barrel Old Country Store, known for its rural and nostalgic products, fell by over 14% to a twelve-year low since early 2012, announcing a significant 80% reduction in dividend payouts to support its transformation plan DXC Technology Company, an IT company in the enterprise technology stack, opened 21% lower and closed down 17%, hitting a nearly four-year low since September 2020, despite exceeding expectations in the fourth quarter of the fiscal year. However, the profit and revenue guidance for the next quarter is not optimistic.

The largest retailer in the United States, Walmart, rose over 1% to a historic high, having surged 7% yesterday due to positive financial reports, supporting the Dow Jones Industrial Average. Internet-famous brokerage firm Robinhood rose by 12%, with Bank of America turning bullish and upgrading its rating by two notches to a buy.

Anda Insurance rose by 3.6%, hitting a historical high for two consecutive days, with an 8.4% cumulative increase in the past two days. This comes as Warren Buffett's Berkshire Hathaway disclosed its holdings, marking the largest two-day gain since 2020.

European stocks fell across the board on Friday, with the pan-European Stoxx 600 index falling for two consecutive days from a historic high, dragged down by industrial and technology stocks. The index had ended a nine-day winning streak on Wednesday but still posted a 0.4% gain for the week, marking a two-week winning streak. Luxury goods group Richemont from Switzerland rose by over 5%, achieving a record high in annual sales.

The German stock index fell by 0.4% for the week, moving away from the intraday historical high set on Wednesday. The French stock index fell by 0.6% for the week, and the UK stock index fell by 0.2%. However, the stock indexes of heavily indebted peripheral eurozone countries Italy and Spain both rose by 2% for the week.

The yield curve of US and European government bonds showed a V-shaped trend in the latter part of the week, with all rising on Friday and moving away from a one-month low.

Hawkish comments from a Federal Reserve official led to a rise in the more interest rate-sensitive two-year US Treasury bond yield during midday trading, increasing by 4 basis points to 4.83%, surpassing 4.80% and recovering from the decline since Wednesday. The 10-year Treasury bond yield rose by 5 basis points to 4.42%, breaking through the 4.40% level and recovering more than half of the decline since Wednesday, with both short and long-term bond yields moving away from a one-and-a-half-month low.

Throughout the week, the two-year US Treasury bond yield fell by a cumulative 4.4 basis points, while the 10-year Treasury bond yield fell by 8.4 basis points, with two out of the past three weeks showing cumulative declines. The 30-year long-term bond yield fell by 8.5 basis points for the week and continued to decline for three weeks in a row, losing 22 basis points during this period. Analysts suggest that this is due to leading indicators of the US economy indicating significant resistance to growth In recent weeks, Federal Reserve officials have been cautious about starting rate cuts, stating that they are still waiting for more evidence of sustained inflation slowdown. The financial markets generally believe that there will be no rate cut before the end of summer, with the first rate cut expected in September and multiple rate cuts this year. A large group of bond bears from Wall Street's major institutions such as Barclays Capital recommend selling 10-year US Treasury bonds on rallies.

Eurozone bond yields rose on Friday, breaking free from a one-month low set on Wednesday. This week, after the release of US CPI inflation data, both Eurozone bond yields and US bond yields showed a V-shaped trend, essentially erasing the declines since Wednesday. The benchmark 2-year and 10-year German bond yields in the Eurozone both rose by about 6 basis points at the close. The 10-year UK bond yield rose by 5 basis points, along with Italian bonds, which both accumulated a 4 basis point decline this week.

US oil breaks above $80 for the first time this month, Brent oil approaches $84 and sees its first weekly gain in three weeks, natural gas surges

Economic indicators from major consumer countries such as the US and China have strengthened hopes for demand-side improvements, leading to an expansion in international oil prices during the day:

WTI June crude oil futures closed up $0.83, a 1.05% increase, at $80.06 per barrel, reaching the highest level since April 30th and breaking above $80 for the first time this month, with a weekly gain of 2.3% and a two-week consecutive increase.

Brent July crude oil futures closed up $0.71, a 0.85% increase, at $83.98 per barrel, reaching the highest level since April 30th, with a weekly gain of 1.4%, marking the first weekly gain in three weeks.

US oil breaks above $80 for the first time this month

Some analysts believe that Chinese economic data and stimulus measures, a consecutive two-week decline in US commercial crude oil inventories, and another attack on Russia's oil infrastructure have all contributed to boosting short-term oil prices. The upcoming focus will be on the OPEC+ production meeting on June 1st.

Meanwhile, the slowdown in US inflation data has strengthened the reasons for the Federal Reserve to start cutting rates in the near future, leading to a depreciation of the US dollar against other major currencies, which is also beneficial for oil prices. Morgan Stanley also believes that the growth rate of global oil demand this year will be higher than historical trends.

Furthermore, inventory tightness ahead of the peak summer demand has supported natural gas prices. US June natural gas futures rose by over 5% on Friday, with a weekly gain of over 16%. The European benchmark TTF Dutch natural gas futures rose by nearly 2% on Friday, marking a four-day consecutive increase and a weekly gain of over 3%.

US dollar erases intraday gains, weekly decline of 0.8% hovering near a one-month low, yen and yuan slightly lower

The US Dollar Index (DXY), which measures against a basket of six major currencies, rose 0.3% to 104.80 during the European stock session, but turned lower towards the end of the US stock session and returned to 104.45, close to the one-month low set yesterday, with a weekly decline of 0.8% and a cumulative decline of 1.7% in May Analysts say this is because the market is warming up to the Federal Reserve cutting interest rates starting in September due to signs of cooling inflation and a weak U.S. economy, with expectations of a 47 basis point rate cut by the end of the year.

The U.S. dollar has erased gains since April's CPI inflation data.

The euro and the pound have slightly risen against the dollar, hovering near two-month highs. The Bank of Japan maintained its bond-buying program unchanged, causing the yen to slightly decline to 155.66 against the dollar, moving away from its high for over a week and maintaining low levels since the burst of the Japanese asset bubble in 1990. The offshore Chinese yuan fell by a hundred points and breached 7.23 yuan against the dollar, erasing most of the gains since Wednesday.

Mainstream cryptocurrencies are generally rising. The largest cryptocurrency, Bitcoin, rose by 2% and broke through $66,400, reaching its highest level in nearly four weeks since April 22. The second-largest cryptocurrency, Ethereum, rose by over 4% and returned above $3,000, hitting a two-week high.

Gold and New York copper hit record highs at the close, silver reached an eleven-year high above $31, and London nickel rose by over 11% in a single week.

Due to improved expectations of interest rate cuts by central banks in Europe and the United States, gold prices rose for two consecutive weeks and nearly 2% this week, silver prices surged by 11% this week, and platinum, facing a continuous structural supply deficit, rose by nearly 9% this week, reaching a one-year high.

COMEX June gold futures rose by $31.90 on Friday, up 1.3%, closing at $2,417.40 per ounce, hitting a historical closing high. July silver futures rose by $1.38, up 4.6%, closing at $31.26 per ounce, reaching the highest closing level since February 8, 2013.

Spot silver rose by 6.4% to $31.51 per ounce, and silver futures rose by 6.3% to $31.77 per ounce, both breaking $30 per ounce for the first time in over a decade, continuously surpassing the highest level since February 2013, driving iShares Silver ETF up by 6.4%, also hitting an eleven-year high. During the night session, the main contract of Shanghai silver futures broke through 8,000 yuan per kilogram, rising by over 5%.

Spot gold rose by 1.8% or over $42, breaking through the psychological barrier of $2,400 and reaching close to $2,420, hitting a new high in a month since April 12, when the price of gold hit a historical high of over $2,431 Amid risk aversion, supply chain disruptions, and strong financial and industrial demand, silver has shown a more rapid rise than gold. Since the beginning of the year, silver has risen by over 31%, surpassing gold's 17% increase, making it one of the best-performing major commodities this year.

Silver outperformed gold by $30 this week, marking the best weekly performance difference since August 2020.

London industrial base metals generally rose:

The economic indicator "Dr. Copper" rose by 2.3% on Friday, holding above the psychological level of $10,000, with a weekly increase of 6.6%. COMEX New York copper for July rose by 3.6% to $5.05 per pound, reaching a historical closing high.

Due to disruptions in the world's third-largest nickel producer affecting output, London nickel rose by nearly $1300 or 6.5% on Friday, breaking through the $20,000 and $21,000 levels successively, with a weekly increase of over 11%.

London aluminum rose by 1% and broke through $2600, with a weekly increase of 3.2%. London zinc rose by 2.4% and broke through $3000, with a weekly increase of 3.5%. London lead, which saw a slight decline on Friday, rose by 2.8% for the week. London tin rose by 1.6% and broke through $34,000, with a weekly increase of 6.7%.

In addition, most domestic futures main contracts rose during the night session, with soda ash up by about 4.8%, LPG up by about 2.4%, styrene up by about 2.2%, iron ore up by 0.4%. Aluminum oxide rose by over 4.2% in the night session, Shanghai nickel rose by over 3.4%, Shanghai silver rose by over 6%, and Shanghai gold rose by 1.6%