🚀 Inflation Persisting

Market Overview
Read time 1.4 minutes

Year To Date Performances:

1. In March, inflation remained persistent, challenging hopes for imminent interest rate cuts. The personal consumption expenditures (PCE) price index, excluding food and energy, held at an annual increase of 2.8%, slightly above expectations. Overall, the broader PCE index rose by 2.7% year-over-year. Consumer spending showed resilience with a 0.8% monthly increase, even as the personal saving rate fell to 3.2%. This data suggests that the Federal Reserve may keep interest rates steady through the summer unless significant changes occur, as high inflation continues to impact the economy and consumer behaviour.

2. Microsoft has ramped up its capital expenditures to $14 billion, marking a substantial 79% increase from the previous year, outstripping its revenue growth of 17%. This spending boost is largely in response to a pressing need for more data center infrastructure to support AI deployments, such as those in Microsoft Teams and Bing, which have surged in demand following the popularity of OpenAI's ChatGPT. Despite these investments, Microsoft is experiencing shortages in data center capacity, which is affecting its ability to deliver AI capabilities, particularly through its Azure cloud service. Azure itself has seen a 31% increase in revenue, attributed in part to AI, but this infrastructure bottleneck could impact future performance.

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4. Headlines

   1. FDA approved new Pfizer medication for hemophilia B.

   2. Exon stock fell after earnings report.

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