Eagle Bites June 12th

U.S Trade Deficit

The trade deficit jumped to a 6 month high of $74.2 billion, an 23% increase from the previous update. The biggest increases occurred in markets of automobiles, parts, and consumer goods such as cell phones, despite high inflation rates dampening demand for these goods. The total exports fell 3.6% to $249 billion, but imports rose by 1.5% to $323.6 billion. Trade was overall neutral to the economic growth of the country, however, it is expected to show somewhat negative growth for the current quarter. The market is still waiting to fully react to this news as many people are waiting for next week’s inflation data and FOMC meeting details to be released.

Jobless Claims

This past week, jobless claims increased by 261,000, 26,000 higher than expectations. Given that the next Federal Reserve meeting is just next week, investors have digested this news with much positivity, assuming that the Fed will decide to keep rates at their current levels (5.00-5.25%) due to a cooling labor market. The news caused the S&P 500 to close 0.6% up for the day on Thursday, closing in bull market territory. However, it is important to note that jobless claims will not be the only deciding factor for the Fed to hike or maintain interest rates.

Apple Vision Pro

Monday, Apple had its annual developer conference which featured the long-awaited mixed-reality headset called Vision Pro at a steep price point of $3,500 which is 7x the current leader in the field Meta’s Quest 3. The extreme price differential is due to the premium list of features including a lighter frame, the ability to see your surroundings, and no controller. Apple has a clear distribution advantage with 520 global retail locations where customers can experience the product before they buy compared to Meta’s single store. The entrance into the market next year will start a new dynamic.

Tesla Supercharge Network

Tesla over the past few months has made steady but impressive gains and added to it on Friday. Surging over 5% amidst positive sentiments from investors after the announcement that GM (General Motors) would be joining Ford in using their North American Charging Standard for their electric vehicles. This move is a big win for Tesla, whose development and creation of the Supercharger Network has helped increase the customer experience regarding charging. Tesla’s charging network is said to be the best in the industry, which puts pressure on other industry leaders to adopt their system as well. If more companies adopt Tesla’s charging system, it could mean significant revenue boosts are on the horizon for Tesla.