Market analysis on June 12

The unexpected cooling of the US CPI inflation data brought a significant boost to US stocks. In May, CPI growth slowed to 3.3%, with zero month-on-month growth. Core CPI increased 3.4% year-on-year and 0.2% month-on-month, all showing clear signs of slowing inflation. As a result, the market completely absorbed expectations of two interest rate cuts this year. Driven by this positive news, the S&P 500 and Nasdaq indices hit record highs for three consecutive days.

Meanwhile, the Federal Reserve stated at a recent meeting that although inflation has cooled down, the level is still above target, and more positive data is needed to support interest rate cut decisions. Powell stressed that although inflation has decelerated significantly, more “good data” still needs to be observed. The Federal Reserve now expects to cut interest rates only once this year, reducing the previous forecast of three times.

In terms of individual stocks, technology stocks, driven by the AI boom, have risen sharply. US stocks of Nvidia, Microsoft, Broadcom, and TSMC all hit new highs. Among them, Broadcom rose an additional 10% due to good after-hours earnings performance. After Apple introduced new features at the WWDC conference, its stock price rose by more than 7%, once surpassing Microsoft to become the company with the highest market capitalization, even though Microsoft regained the lead.

In the fixed income market, after the CPI data was released, the price of US bonds rose sharply, and the yield fell sharply. The 10-year US Treasury yield plummeted by more than 10 basis points, hitting a two-month low. The US dollar index fell sharply after the data was released, and although there was some recovery after the Federal Reserve meeting, the increase was limited.

Crude oil prices rose for three consecutive days during this period, reaching a new two-week high. The metal market also showed strong performance, with Lunzinc and Luoxin rising more than 4%, while Luntong rose nearly 2%.

In the Chinese market, the Shanghai Index fluctuated slightly and rose, and pharmaceuticals and coal stocks showed strong performance. Meanwhile, as China's CPI grew only 0.3% in May and the year-on-year decline in PPI narrowed, showing signs of economic stability. The China General Stock Index fell slightly after the US CPI data was released, but the decline was limited. The offshore renminbi appreciated significantly after the data was released, but declined after the Federal Reserve meeting, showing the market's comprehensive response to the global economic outlook.