• Why did Bank of England maintain high interest rates?
• What boosted Nvidia's market value?
• Why did the CBO raise the budget deficit forecast?
MARKET MOVEMENTS
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IN THE HEADLINES
Bank of England Keeps Rates at 16-Year High Before UK Election
The Bank of England decided to hold interest rates steady at 5.25% during its June meeting, aligning with market expectations after U.K. inflation fell to the central bank’s 2% target. Despite this, the decision was described as "finely balanced," indicating a potential rate cut in August, with market bets on such a move increasing to nearly 50-50. Seven members of the Monetary Policy Committee voted to hold rates, while two favored a 25 basis point cut. The Bank emphasized the need to keep monetary policy restrictive to sustain the inflation target but acknowledged the easing of short-term inflation expectations and wage growth. Read more
Nvidia's Market Value Hits a New High
Nvidia has surpassed Microsoft to become the most valuable public company, reaching a market cap of $3.34 trillion. This milestone follows a significant rise in Nvidia's stock, which has increased more than ninefold since the end of 2022, driven by the surge in generative artificial intelligence. Nvidia, holding about 80% of the AI chip market for data centers, reported a 427% year-over-year increase in revenue from its data center business, totaling $22.6 billion. This rapid ascent reflects Wall Street’s recognition of Nvidia’s pivotal role in the AI boom, positioning it ahead of both Microsoft and Apple. Read more
The U.S. Congressional Budget Office Raises This Year's Budget Deficit Forecast by 27%
The U.S. budget deficit for fiscal 2024 is projected to increase to $1.915 trillion, a 27% rise from previous forecasts, driven by higher spending on student loan relief, Medicaid, bank failure resolutions, and aid to Ukraine and Israel. This marks the largest deficit outside the COVID-19 era and continues the trend of substantial deficit increases under President Biden. The Congressional Budget Office (CBO) also forecasts a further rise in the deficit to $1.938 trillion in 2025 and has raised its cumulative deficit projection for the 2025-2034 decade by $2.067 trillion to $22.083 trillion. Factors contributing to long-term deficits include legislative changes and increased interest costs, despite a strengthened economic outlook and reduced long-term deficits by $600 billion. Read more
TradeUP TIDBITS
Zero Days To Expiration (0DTE): What Are They & How Do They Work?
Zero Days to Expiration (0DTE) are financial instruments that offer traders the opportunity to capitalize on short-term market movements. These options are unique in that they expire on the same day they are traded, presenting a fast-paced trading environment ideal for those seeking quick gains. The concept of 0DTE options has gained significant traction in recent years, reflecting the growing interest among traders in exploiting short-term market fluctuations. Read the Full Article
INVESTOR TIPS
Capital Gain
The profit that comes when an investment is sold for more than the price the investor paid for it.
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