Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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Micron Technology (MU) massively exceeded expectations with its third quarter earnings report, published after market close on Wednesday, causing shares in the company to soar 16% during the following session. Record-breaking revenue figures suggest that customers are more than willing to pay increased prices for memory, a fact that manifested very differently for Apple (AAPL), whose shares sank 6% on Thursday after the computer giant announced price hikes to its Mac and iPad range of products. In a very blunt statement, Apple admitted that the rapid expansion of AI data centres has created a surge in demand for memory and storage and that the company has reached a point where it is unable to shield their customers from the resulting price increases. The relentless demand from AI endeavours has been known to cause shortages and higher prices in the consumer market for several years already – ask anyone trying to build their own PC – but the latest chapter now illustrates the direct competition between major tech firms. Apple was not the only giant to falter on Thursday, with the remainder of the magnificent seven also closing yesterday’s session in the red. Speaking of which, Micron’s recent ascent, coupled with the introduction of SpaceX (SPCX) to the Nasdaq, has somewhat reshuffled the pecking order in terms of America’s largest companies by market capitalisation. Micron briefly surpassed both Tesla and Meta on Thursday, while SpaceX and Broadcom currently occupy the 6th and 7th spot respectively. The AI boom has made heroes of companies that had been overlooked for many years and soon the magnificent seven may well swell to the magnificent ten.
Yesterday’s PCE price index changed very little in terms of the overall inflation picture. Expectations were largely met and while the headline figure topped 4.1%, the core inflation rate only increased 0.3% in May; not enough to trigger any immediate shift in monetary policy. Expectations for a rate hike actually fell following the publication, with interest rate traders now looking at a 70% chance of a rate hold during the next Fed meeting on the 29th of July. With that said, markets are still coming to terms with a stronger dollar, a narrative that has punished non-yield-bearing assets harshly. Gold is in the process of losing $4,000 per ounce while silver is down to $56. The white metal has now more than halved in value since setting a record high of $120 per ounce earlier this year. Over in cryptocurrencies, Bitcoin lost $60,000 yesterday and is currently bogged down in the mid-$58,000 range. Needless to say, sentiment in the crypto sphere is truly in the gutter.
About the Author
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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