Williams: Recent inflation outlook is more positive due to energy prices
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Federal Reserve's Williams: Strong investment in AI is expected to continue.
According to BlockBeats, on July 7th, Federal Reserve official Williams stated that he expects to continue seeing strong investment in artificial intelligence, that risks in the labor market are relatively balanced, and that his recent outlook on inflation is more positive due to energy prices. He added that the direction of monetary policy depends on data and risks, and that the Fed is prepared to achieve its goals. (Jinshi)
Energy prices fell, and Switzerland's inflation rate declined slightly.
Odaily Odaily reports that Switzerland's inflation rate fell slightly in June, marking the first decline since energy prices surged following the outbreak of the Iran-Iraq war. The Swiss Federal Statistical Office said on Thursday that the annual inflation rate was 0.5% in June, down from 0.6% in April and May. The previous two months saw inflation reach its highest level since 2024. Data shows that petroleum product prices rose 15% year-on-year in June, but this was a slight decrease compared to May; air transport prices also declined, as these prices are particularly susceptible to global energy price fluctuations; meanwhile, hotel and car rental prices rose. This slight decline in inflation also confirms the views of Swiss National Bank President Schlegel. At last month's monetary policy meeting, he stated that despite the energy price shocks caused by the Middle East conflict, medium-term inflationary pressures remain generally stable. (Jinshi)
Gold prices fell back below $40,000 due to concerns about interest rate hikes.
Gold prices fell back below $4,000 per ounce ahead of Federal Reserve Chairman Warsh's speech at the European Central Bank forum in Portugal. Analysts at Odaily Bank stated, "The market has not yet attracted enough buying interest to establish this level as support." They added, "Despite recent declines in energy prices, investors still anticipate further tightening of monetary policy by the Federal Reserve to combat rising inflation, resulting in a 14% drop in gold prices in the second quarter, marking its worst quarterly performance since 2013." (Jinshi)
Trump pressures retailers to cut prices to combat inflation, demanding supermarkets lower beef prices.
According to a report by the WSJ on July 8th, the Trump administration recently pressured major supermarket chains such as Walmart, Kroger, and Albertsons to lower beef prices during the Independence Day shopping season to alleviate food inflation pressures. Walmart subsequently announced price reductions on thousands of items, with ground beef prices dropping by up to 12%. Trump later stated that Walmart was lowering prices "at the request of the government" and called on other retailers to follow suit. This action is part of the Trump administration's efforts to control inflation. In addition to pushing for lower food prices, Trump has previously called for lower gasoline prices, capped credit card interest rates, and reduced drug prices, hoping to alleviate voter dissatisfaction with high prices before the midterm elections. However, with U.S. cattle herds at a 75-year low, tight supply continues to push up beef prices. U.S. ground beef prices rose 12% year-on-year in May, indicating that food inflation pressures have not yet fully eased.
The protagonist of the "ByteDance stock trading 30 million" story recounts his experience: He discovered an opportunity in the AI storage sector due to rising hard drive prices and recommends investing in AI companies to hedge against the risk of being replaced by AI.
According to Mars Finance, on July 5th, Leto Bao, the protagonist of the "ByteDance stock trading 30 million yuan" story, concluded his review of his US stock investment experience on Binance Square. Some of his remarks are as follows: Around August of last year, his investment style shifted to value investing, with his main holdings allocated to indices, especially the Nasdaq 100, and a portion invested in companies he actively selected, such as Google. At that time, wanting to build a database and backtest his investment strategy using quantitative methods, he purchased two hard drives on Pinduoduo, subsequently discovering that hard drive prices were continuously rising. He stated that the rising hard drive prices became the first signal that drew his attention to the storage sector. At that time, reports already mentioned that AI was driving up memory prices, and hard drive prices were rising in tandem. The second signal came from his experience as a Data Engineer; ByteDance was also requiring its teams to shorten data lifecycles, i.e., reduce data storage time, for example, from two or three years to one year or six months, and delete redundant data, due to insufficient storage resources. Leto Bao stated that based on the rising hard drive prices, AI storage needs, and research report analysis, he initially bought some related stocks, but did not immediately invest heavily, because he had not yet seen concrete evidence at the time. He then discovered through 13F institutional holdings that institutions had been increasing their positions in related sectors for three consecutive quarters before he began to increase his own positions and has held them ever since. He stated that he currently still holds positions related to storage and has already achieved significant returns. Leto Bao noted that the CPI (Consumer Price Index) is also one of the key indicators closely watched by the Federal Reserve. A high CPI usually indicates significant inflationary pressure; a low CPI may reflect deflationary pressure. The Fed's long-term goal is to maintain inflation at around 2%, which represents a moderate inflationary environment, implying slow currency depreciation, while investment, consumption, and credit activities are relatively healthy. Non-farm payroll data also influences market judgment. There is a certain correlation between overheated employment and inflation, but the relationship between macroeconomic indicators is complex and not a simple linear deduction. The Federal Reserve is responsible for formulating economic policies related to interest rates and serving the operation of the US economy through policy adjustments. Leto Bao believes that CPI, non-farm payrolls, Fed policies, and earnings season should not be simply regarded as "noise" but all have certain reference value. He mentioned that he had previously ignored the interest rate hike environment when investing in Nvidia, leading to a significant drawdown in his account. Therefore, macroeconomic factors still need to be considered in investment decisions. Finally, Leto Bao advised that investments should begin as early as possible, and funds should be allocated to relevant assets as soon as possible. Many jobs and positions will be affected by AI in the future, so ordinary people who want to hedge against the risk of being replaced by AI can consider investing in AI-related companies. Leto Bao is a former employee of ByteDance, known as the "ByteDance Stock Investor." He reportedly made a substantial profit by investing in the AI storage sector in the US stock market, earning approximately 30 million RMB before resigning. The story began when he noticed an abnormal price increase when buying hard drives on Pinduoduo, which led him to research data storage needs and heavily invest in related stocks.
Market Outlook for Next Week: Fed and ECB Meeting Minutes Released, Market Focuses on Interest Rate Hike Path and Gold Price Movement
Mars Finance reports that on July 5th, global markets will see the release of the Federal Reserve's June meeting minutes, the European Central Bank's meeting minutes, and several important economic data releases next week. The market will focus on the Fed's latest assessment of inflation and interest rate paths, as well as US services PMI and initial jobless claims data. Gold may maintain range-bound trading in the short term. Key points to watch include: • Federal Reserve Meeting Minutes: Released early Thursday morning Beijing time, the market hopes to glean more details about the first meeting chaired by new Fed Chairman Warsh to determine if there is still room for rate hikes by the end of the year. The interest rate market has largely priced in a 25 basis point rate hike in December and believes there is a certain probability of an earlier move in October. • Fed Officials' Speeches: Officials such as Williams, Logan, and Waller will deliver speeches, and the market will focus on whether they will adjust their hawkish stance due to recent weak non-farm payroll data. • European Central Bank Minutes: Released on Thursday, investors will focus on the European Central Bank's latest assessment of economic growth, inflation, and subsequent monetary policy. * **Reserve Bank of New Zealand Interest Rate Decision:** The market expects an approximately 80% probability of a 25 basis point rate hike; attention will be focused on whether it delivers on its previous hawkish guidance. * **Important Economic Data:** Data including the US ISM Non-Manufacturing PMI, the final S&P Global Services PMI, EIA crude oil inventories, and initial jobless claims will be released successively, providing new clues for the market to assess the US economic and interest rate outlook. * **Gold Outlook:** HSBC believes that with real interest rates remaining high and the US dollar relatively strong, gold may maintain range-bound trading in the short term, but central bank gold purchases, ETF inflows, and the global trend of de-dollarization still support its medium- to long-term upward trend. * **Earnings Season Begins:** PepsiCo, Delta Air Lines, Levi's, and other companies will be among the first to release their second-quarter results. The market will focus on consumer demand, profit margins, and full-year earnings guidance, serving as a warm-up for the mid-July bank earnings season.