Key Takeaways

• JPMorgan Strategist: Fed Unlikely to Cut Rates Given Strong Economy
• Fewer Rate Cuts Should Benefit Large-Cap Stocks, Says Goldman’s Kostin
• Wedbush Bullish on Microsoft, Expecting 18% Increase
• GameStop Down 16% Pre-Market, Q4 Results Miss Expectations

I. Market Report

Stock futures are up Wednesday following a losing session on Wall Street that pulled the indexes further from record levels.

As of 08:25 am, EST (or 20:25 in Malaysia), Futures tied to the Dow Jones Industrial Average added 145 points, or 0.37%. S&P 500 futures and Nasdaq 100 futures also rose 0.35% and 0.38% respectively.

II. Market Movers

As of 07:56 am, EST (or 19:56 in Malaysia), top pre-market movements are as follows:

Note: We are pleased to inform you that our app now supports pre/after-market trading for US stocks. The trading hours for these sessions are as follows:

• Pre-market: 16:00 to 21:30 in Malaysia
• After-hours market: 04:00 to 08:00 the next day in Malaysia

Please note that regular trading hours are from 21:30 to 04:00 UTC.

III. Flash Headlines

JPMorgan Strategist: Fed Unlikely to Cut Rates Given Strong Economy

Oksana Aronov, a strategist at JPMorgan, argues that the Federal Reserve has neither the necessity nor the justification to cut interest rates. She noted during an interview that with a robust economy, unemployment below what the Fed deems neutral, and inflation still above their target – even considering long-term forecasts – there's no pressing motivation for Powell to act currently.

Fewer Rate Cuts Should Benefit Large-Cap Stocks, Says Goldman’s Kostin

The markets have already priced in an expectation of three interest rate cuts from the Federal Reserve this year, according to Goldman Sachs chief U.S. equity strategist David Kostin. In the case that the Fed reduces rates less than expected, that should benefit large-cap stocks, Kostin told CNBC’s “Squawk on the Street” on Tuesday.

“To the extent that there are fewer cuts — Goldman Sachs economists expect three — if there [are] two, then that would be more supportive of larger caps, better balance sheets. The megacap stocks continue to do better,” Kostin said.

Yen Hits Weakest Level Since 1990, Raising Expectations of Intervention

The Japanese yen hit its weakest level against the greenback on Wednesday in about 34 years, falling to as low as 151.97 before strengthening slightly.

Yen fell below its previous record low of 151.95 reached in October 2022.

Japanese officials have been issuing strongly worded statements regarding the currency, with finance minister Shunichi Suzuki reportedly saying that the country “won’t rule out any steps to respond to disorderly FX moves.”

IV. Stocks to Watch

Wedbush Bullish on Microsoft, Expecting 18% Increase

Renowned strategist Dan Ives of U.S. investment bank Wedbush has raised the target stock price for Microsoft ( $Microsoft Corporation MSFT$ ) from $475 to $500, representing an 18% potential increase from the current price. The bank stated that Microsoft’s artificial intelligence (AI) business is a major growth accelerator, with an expected 70% of users to use the company’s AI-driven features in the next three years, higher than the previous estimate of 60%.

GameStop Down 16% Pre-Market, Q4 Results Miss Expectations

GameStop( $GameStop Corp. Class A GME$ ) announced job cuts due to intense competition from e-commerce companies and weak consumer spending amid uncertain economic prospects. The company also reported underwhelming fourth-quarter performance in 2023, with lower-than-expected adjusted earnings per share at $0.22 and revenue at $1.79 billion, below the market’s expectation of $2.05 billion.

Merck up Over 5% Pre-Market

The US Food and Drug Administration (FDA) has approved a drug made by Merck( $Merck & Co., Inc. MRK$ ) for the treatment of pulmonary arterial hypertension (PAH). It is reported that the drug is priced at $14,000 per bottle without insurance, and most patients take one bottle every three weeks, resulting in an annual cost of approximately $242,000.

DJT up Over 15% Pre-Market

Wall Street gives a wild 11 billion dollar valuation to Trump Media & Technology Group ( $Trump Media & Technology Group Corp. - Class A Common Stock DJT$ ), nearly double Tuesday’s closing price, but warns it’s not based on fundamentals. Renaissance Capital’s senior IPO strategist, Matthew Kennedy, admits the stock price isn’t tied to business performance, but in the long term, it will likely come back to fundamentals, meaning a sharp drop is inevitable. As of now, DJT’s pre-market continues to rise by over 15%.

Apple to Unveil AI Strategy at June Developer Conference

Apple Inc. ($Apple Inc. AAPL$ ) is set to host its annual Worldwide Developers Conference from June 10 to June 14. While specific product announcements were not disclosed, insiders highlight artificial intelligence as a focal point. Upcoming major software updates for the iPhone, iPad, Mac, Vision Pro, and smartwatches are expected, with a new AI strategy at the forefront of the iOS 18 upgrade.

V. Calendar

Earnings:

$Cintas Corporation CTAS$

$Carnival Corporation CCL$

Expected IPO:

$Zhibao Technology ZBAO$

$NeOnc Technologies Holdings, Inc. NTHI$

$U-BX Technology Ltd. UBXG$

Please note that the timing of IPOs is subject to change at any time (including being advanced or delayed). Investors should therefore keep up-to-date with relevant news.

Events:

22:30 GMT+8 Crude Oil Inventories

Read more on the full week's calendar:
Weekly Watch | Fed Focuses on Key Inflation Metric; Powell and Colleagues Set to Present; Xiaomi Launches SU7 Vehicle

Finally, just a little reminder:

The regular trading hours for US stocks in the Daylight Saving Time (DST) are from 21:30 to 04:00+1 GMT+8, with pre-market trading available from 16:00 to 21:30.

Have a nice trading day!