Microsoft’s market capitalization becomes $3 trillion for the first time, Tesla falls sharply due to weak financial results, US GDP shows strength in consumer spending | 26th Financial Tankan

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1/26 (Friday) morning market trends (compared to the previous day)

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NY Dow: 38,049 +0.6%
Nasdaq: 15,510 +0.18%
Nikkei average: 36,236 +0.028%
USD/JPY: 147.6 +0.05%
Gold futures: 2,021 +0.2%
Microsoft: $404.8 +0.57%
NVIDIA: $616.1 +0.4%

Today’s NY Dow rebounded, and the Nasdaq continued to rise slightly due to the strength of AI and semiconductor stocks. In addition, the S&P 500 reached a new all-time high for the sixth day in a row.

Software giant Microsoft has benefited from the AI (artificial intelligence) boom, rising 63% in the past year and reaching $3 trillion in market capitalization for the first time. Currently, Microsoft is ranked number one in the market capitalization ranking of listed companies in the world, surpassing Apple.

Additionally, the US’s fourth quarter real GDP data released last night was well-received by the market. Preliminary GDP growth (3.3% annualized growth) exceeded expectations (2% growth), dispelling fears of an economic recession among many consumers and investors.

Furthermore, the rate of increase in the PCE Core Price Index, an inflation indicator that the US Federal Reserve focuses on, has been in line with the authorities’ target of 2% for two consecutive quarters, and on February 1, the FOMC decided to leave interest rates unchanged again in its interest rate announcement. This appears to be a strong basis for doing so. On the other hand, there are also concerns about an accelerating cooling of the labor market and a decline in consumer demand, and some argue that this year’s economic growth is at risk of slowing significantly in the first half of 2024.

Today’s main market materials are as follows:.

Tesla’s stock price fell sharply -12.13% today after weak results after yesterday’s close: Tesla’s sales were $25.2 billion, falling short of market expectations of $25.9 billion, and the company warned that this year’s sales growth is expected to slow.
Microsoft: Market capitalization reaches $3 trillion (440 trillion yen) for the first time (at closing price) due to rising expectations for demand for generative AI services developed with OpenAI, an investment company.
Weak financial results for Intel (-10.2% after market close): Sales forecast for the first quarter is lower than market expectations. While demand for AI servers from Nvidia and AMD is increasing, demand for Intel’s traditional servers is declining.
European Central Bank (ECB) President Lagarde: “We need to further advance the disinflationary process,” noting that interest rate cuts are possible after this summer. The ECB kept the central bank deposit rate unchanged at 4%.

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Important economic indicators/events from this week onwards