‘Data is king for the Fed’ - Versace
‘The US Federal Reserve are unlikely to rock the boat,’ Chris Versace, Tematica CIO, tells IGTV’s Angeline Ong ‘and can continue to wait on data to confirm that inflation is sustainably lower before making its first rate cut’.
Versace also talks about Intel winning almost $20 billion in awards from the Biden administration to boost US chip production.
(AI Video Summary)
Intel given $20 billion to boost US chip production
The Biden administration has given Intel almost $20 billion to help increase its chip production in the US, as part of an effort to reduce reliance on suppliers from Asia, specifically China. This move is expected to have a positive effect on companies that make equipment for semiconductor chips, like applied materials and IBM Research. The demand for AI (artificial intelligence) chips and the benefits they bring are also driving optimism in the semiconductor industry.
Countries like the Eurozone and Japan are also focusing on increasing their chip capacity, which has led to a global "chip arms race". This emphasis on chip production could potentially cause inflationary pressures, which might affect the Federal Reserve's decisions regarding its monetary policies. However, the Fed is likely to stick to its current approach until it sees inflation consistently retreat to its 2% target.
Impact of geopolitical events
Geopolitical events, such as the conflict between Israel and Palestine or the situation in Ukraine, could also influence the Fed's view of the global economy. The Fed will take these events into consideration and assess how they might impact expectations for GDP (gross domestic product). Investors will need to pay attention to these developments in order to navigate the markets effectively.
Boeing's troubles
Moving on to the aerospace industry, Boeing is currently facing challenges with its credibility and could potentially lose market share. Recent incidents, like the one involving Alaska Airlines, have raised concerns about Boeing's ability to recover quickly. It might be necessary for the company to make changes in its management or address these issues in order to regain trust from investors. If you are considering investing in Boeing shares, it might be a good idea to wait and see how the situation progresses before making a decision.
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