Dow was up 50, decliners better than advancers 2-1 & NAZ gained 146. The MLP index edged up 1+ to the 289s & the REIT index slid back 3+ to the 375s. Junk bond funds continued to be in demand & Treasuries saw very heavy selling, raising Treasury yields. Oil shot up 1+ to the 83s & gold was steady at 2340 (more on both below).
Dow Jones Industrials
Measuring the strength of the sprawling US economy is no easy task, so one firm is sending artificial intelligence in to do the job. The Zeta Economic Index, launched today, uses generative AI to analyze what its developers call “trillions of behavioral signals,” largely focused on consumer activity, to score growth on both a broad level of health & a separate measure on stability. At its core, the index will gauge online & offline activity across eight categories, aiming to give a comprehensive look that incorporates standard economic data points such as unemployment & retail sales combined with high-frequency information for the AI age. “The algorithm is looking at traditional economic indicators that you would normally look at. But then inside of our proprietary algorithm, we’re ingesting the behavioral data and transaction data of 240 million Americans, which nobody else has,” said David Steinberg, co-founder, chair & CEO of Zeta Global. “So instead of looking at the data in the rearview mirror like everybody else, we’re trying to put it out in advance to give a 30-day advanced snapshot of where the economy is going,” he added. The * verticals the economic index uses include automotive activity, dining & entertainment, financial services such as credit line expansion, health care, retail sales, technology & travel. For the stability measure, the index will look to gauge consumers' ability to handle gyrations in the economy. Together, the goal is to provide something more expansive than gross domestic product & similar measures to gauge growth. In Jun, both measures had good news, with the economic score at 66 & the stability index at 66.1. Respectively, the 2 readings correspond to “active” & “stable” regarding the health of the economy. “This is maybe a more holistic way of really predicting the economy because not only are you taking the existing economic indicators around GDP, employment, all the different reporting that comes down on different vertical sales, you’re layering on top of it,” Steinberg said. “We’re really looking at what they’re actually spending. We’re looking at what they’re actually reading and researching,” he added. “We’re seeing all of that information, which allows us to build a better forecast.”
A new index is using AI tools to measure U.S. economic growth in a broader way
Boeing
(BA), a Dow stock, will buy back its struggling fuselage maker Spirit AeroSystems (SPR) in an all-stock deal that the plane maker has said will improve safety & quality control. It
said it agreed to pay $37.25 a share in BA stock for SPR, giving
the aerospace company an equity value of $4.7B. Including its debt the deal has a transaction value of $8.3B. SPRs shares closed Fri at $32.87 a share, giving it a
market capitalization of about $3.8B. BA CEO Dave Calhoun, who has said he will step down at the end of
the year, said bringing Spirit in-house will “fully align”
the companies’ production systems & workforces. “Among the many
actions we’re taking as a company, this is one of the most significant
in demonstrating our unwavering commitment to strengthen quality and
make certain that Boeing is the company the world needs it to be,”
Calhoun said in a message to employees. He said he expects the
deal to close mid-2025, subject to approval by regulators, SPR
shareholders & the sale of SPR's operations dedicated to Airbus
planes. BA stock rose 4.91 & SPR was up 1.10 to 34.
Boeing agrees to buy fuselage maker Spirit AeroSystems in $4.7 billion deal
Nvidia (NVDA) is set to be charged by the French antitrust regulator for
allegedly anti-competitive practices, making it the first enforcer to act against the
computer chip maker. The French statement of objections
or charge sheet would follow dawn raids in the graphics cards sector in
Sep last year, which sources said targeted NVDA. The raids were
the result of a broader inquiry into cloud computing. The world's largest maker of chips used both for artificial
intelligence & for computer graphics has seen demand for its chips
jump following the release of the generative AI application ChatGPT,
triggering regulatory scrutiny on both sides of the Atlantic. The company in a
regulatory filing last year said regulators in the EU, China & France had asked for information on its graphic cards. The
European Commission is unlikely to expand its preliminary review for
now, since the French authority is looking into NVDA. The French watchdog in a report issued Fri on competition in generative AI cited the risk of abuse by chip providers. It
voiced concerns regarding the sector's dependence on NVDA's CUDA chip
programming software, the only system that is 100% compatible with the
GPUs that have become essential for accelerated computing. It also cited unease about NVDA's recent investments in AI-focused cloud service providers such as CoreWeave. Companies
risk fines of as much as 10% of their global annual turnover for
breaching French antitrust rules, although they can also provide
concessions to stave off penalties. NVDA stock rose 76¢.
Nvidia set to face French antitrust charges
Gold prices edged higher, buoyed by some short covering from investors with focus turning to US jobs data due later this week that could offer more cues around interest rate cuts by the Federal Reserve. Spot gold was up 0.2% at $2329 per ounce. Prices registered a more than 4% gain in the 2nd qtr. US gold futures settled mostly unchanged at $2338. US manufacturing contracted for a 3rd straight month in Jun & a measure of prices paid by factories for inputs dropped to a 6-month low amid weak demand for goods, indicating that inflation could continue to subside. This week, the focus will be on remarks from Chair Jerome Powell tomorrow, followed by minutes from the central bank's latest policy meeting on Wed & US non-farm payrolls data due on Fri.
Gold holds ground as investors await US jobs data
Oil futures ended solidly higher, extending on last week's gains after shaking off an initial dip following data that showed a fall in China's crude demand in May. Chinese oil-refinery output fell 1.8% year over year in May. West Texas Intermediate crude for Aug rose $1.84 (2.3%) to settle at $83.38 a barrel. That was the highest front-month contract close since Apr 26. Sep Brent crude, the global benchmark, rose $1.60 (1.9%) to $86.60 a barrel, the highest close since Apr 30. The number of active US oil-drilling rigs fell by 6 in the latest week, according to Baker Hughes data.
Crude prices climb to 2-month high on summer demand prospects, 5th weekly fall in U.S. oil rigs
Stocks got off to a sluggish start in this week with the Fourth of July holiday.
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