Whiplash! Week in Review: AI Optimism Meets Inflation, Oil, and Geopolitical Anxiety
Major indices changed course in a meaningful way this past week, ending in the green despite significant initial volatility.
For the week, the S&P 500 and the Dow each rose fractionally, and the Nasdaq-100 gained more than 2%. Headline whiplash about developments in the war between the U.S. and Iran ended with hope that an agreement is in the offing. The price for U.S. benchmark crude oil sank roughly 7% on the week to two-month lows near $84 per barrel.
The SpaceX (SPCX) initial public offering Friday, with a $135 offering price and $150 opening trade, will go down as the largest IPO ever and is a strong indication of market optimism about new growth frontiers. The week also showed there is no stopping the artificial intelligence growth narrative. The Philadelphia Semiconductor Index (SOX) spiked more than 9% over the last five trading days.
Inflation will be a theme next week, with geopolitical tension and oil price trends defining conversations as the Federal Reserve Open Market Committee meets Tuesday and Wednesday. Listen to guests talk about four big topics in the week that was:
On Energy Shocks and Geopolitics
Even with the Strait of Hormuz open, it could take some time to bring oil reserves back to pre-war levels.
- Mercogliano: 'Peace in Middle East' Won't Solve Long-Term Energy Headwinds: Sal Mercogliano, Maritime Historian at Campbell University, in conversation with Marley Kayden.
- How U.S. Economy Will Stomach Energy Prices as Fed Grapples with Inflation: Mabrouk Chetouane, Head of Global Market Strategy at Natixis Investment Managers, in conversation with Tom White.
- Wavering Iran Tensions & Impacts on Crude Oil, Interest Rates: John Deal, Managing Director, Capital Markets, at The Post Oak Group, and Melissa Armo, in conversation with Marley Kayden.
On The Federal Reserve, Inflation and the Fragility of Market Confidence
Last week, the consumer price index (CPI) for May showed an increase of 0.5% month over month and 4.2% year over year. The producer price index (PPI) was up 1.1% month over month and 6.5% year over year, the highest levels since 2022. Meanwhile, the European Central Bank raised rates by 25 basis points Thursday.
- Sticky Inflation Complicates Fed Outlook as CPI Hits 4.2% Ken Kim, Senior Economist at KPMG, and Yelena Shulyatyeva, Senior U.S. Economist for the Conference Board, in conversation with Diane King Hall.
- No Rush to Cut: Fed's Fight with Inflation & Jobs Data: Mark Vitner, Chief Economist at Piedmont Crescent Capital, in conversation with Sam Vadas.
- Inflation Crosscurrents: Oil, Wages, and What the Fed Watches Next: Jeffrey Klingelhofer, a portfolio manager and senior research analyst focused on securitized assets at Aristotle Funds, in conversation with Sam Vadas.
On AI Infrastructure, the Semiconductor Supercycle and Testing Mega-cap Tech Leadership
On demand for chips, memory, servers, data centers, cloud capacity and more:
- Micron (MU) Starting AI Memory 'Supercycle?' Outlining Risk in Supply & Demand: Matt Bryson, Managing Director of Semiconductor and Hardware Research at Wedbush, and Zed Francis, CIO and Cofounder of Convexitas, in conversation with Diane King Hall.
- AI Semiconductor Boom: SOXL, Micron (MU), and Early-Stage Growth, Ryan Lee, Senior Vice President at Direxion, in conversation with Diane King Hall.
- Oracle (ORCL) Earnings: Stock Pressured for AI Debt Financing News, plus an ORCL Options Trade: Sam Vadas speaking with Marley Kayden about the Street’s view of Oracle, and Sam in conversation with Joe Tigay, portfolio manager at the Rational Equity Armor Investments.
- Apple (AAPL) Siri AI Updates, Google (GOOGL) & Microsoft (MSFT) Expectations: Daniel Rubino, editor in chief at Windows Central, in conversation with Marley Kayden
On Fund Flows and Investing Trends: Are the SpaceX IPO, and OpenAI IPO Plans a Test of Public Markets?
- AI IPO Boom: OpenAI, Anthropic, and Surging Investor Demand: Isabelle Freidheim, founder and managing partner of Athena Capital, in conversation with Sam Vadas.
- The story exchange-traded fund flows are telling now and Ways to Defend Portfolios Against Volatility, from Kevin Rich, COO and CCO at WEBs Investments, in conversation with Diane King Hall.
