Market Overview: June 12th
Today, June 12th, saw a dynamic market influenced by geopolitical tensions, economic data releases, and company-specific news. While some sectors experienced gains, others faced headwinds, highlighting the ongoing market volatility.
Geopolitical Tensions and Negotiations with Iran
Tensions in the Middle East remain high as the U.S. prepares for a sixth round of negotiations with Iran on Sunday. Israel is reportedly preparing for a potential attack on Iran's facilities if negotiations fail. Iran has threatened retaliation against the U.S. embassy in Baghdad if attacked. Despite these geopolitical concerns, the market chose to temporarily ignore the situation.
Economic Data and Market Reaction
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PPI Data: The Producer Price Index (PPI) data indicated moderate inflation, suggesting that tariffs haven't significantly impacted consumer and business prices yet. The overall PPI rose by 0.1%, below the expected 0.2%, while core PPI also increased by only 0.1%, significantly lower than the forecasted 0.3%. Some PPI components are used to calculate PNI inflation and measure the PCE price index, with expectations for a mild PCE report later this month.
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Unemployment Data: The number of unemployed Americans last week reached 24.8 million, slightly exceeding the expected 24.2 million. The total number of unemployed people also rose to 195.6 million, the highest level since the end of 2021. Although the labor market is slowing down, it is still considered to be in good shape overall. This data increased expectations for a potential Federal Reserve rate cut in September. Following the data release, both the U.S. dollar index and U.S. interest rates decreased.
Trade Developments
Trade news presented a mixed picture. Despite President Trump threatening trading partners, U.S. Trade Representative Robert Lighthizer indicated a willingness to extend tariff termination to countries negotiating sincerely. Japan, however, reaffirmed its commitment to its national interests in trade negotiations. A meeting between U.S. and Japanese officials is expected during the upcoming G7 summit in Canada on June 16th.
Market Performance and Analysis
Sena shares closed higher, with more stocks increasing in value than decreasing. The improvement in the profit-loss ratio for technology stocks fueled the stock market's rise. The U.S. Treasury Department's $2.2 billion 30-year auction had positive results with strong overseas demand, supporting risk appetite. However, small-cap stocks lagged behind, potentially indicating a shift away from previously popular "garbage stocks." There are indications that previously high-flying stocks, particularly in the property and small-cap sectors, may be facing a downward reversal.
Circo and the Stable Currency Act
The U.S. Senate is actively promoting the Stable Currency Act. This bill aims to establish stablecoins as dollar-digitized assets, competing with digital currencies issued by other nations, primarily China's digital RMB.
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Goals of the Act:
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Extend the U.S. dollar's dominance to the digital currency realm.
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Transfer U.S. debt pressure by requiring stablecoin issuers to hold U.S. dollars or U.S. bonds as reserves.
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Wall Street anticipates that the stable currency market will grow significantly following the bill's passage, creating substantial demand for U.S. debt and indirectly boosting liquidity in the U.S. stock market.
Individual Stock Highlights
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Jia Guowen (Oracle): Oracle reported strong Q4 2025 fiscal year performance driven by AI algorithmic demand. Revenue increased by 11% to $15.9 billion, exceeding expectations, and the company holds $13.8 billion in unconfirmed contract amounts. The stock surged over 13% to a new historical high.
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Boeing: A Boeing 787 Dreamliner crashed shortly after takeoff in London, resulting in numerous fatalities. While the stock price initially fell, it recovered some losses, suggesting that financial data, rather than news events, ultimately drive Boeing's valuation. The crash investigation is ongoing, and the impact on the stock price will depend on the cause and its implications for aircraft deliveries.
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CHYM: The stock experienced a significant surge on its debut, indicating short-term funding speculation.
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VOOYG: Despite receiving a $2.175 billion development grant from NASA for a space station project, the stock price fell after an initial surge. This pullback is attributed to profit-taking after the previous day's substantial gains.
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Oklo: The company's stock price fluctuated after it announced a $400 million stock offering following a nuclear power agreement with the U.S. Air Force.
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GameStop: After announcing plans to issue another $1.75 billion transferable bond to buy Bitcoin, the stock price declined sharply, suggesting market skepticism towards the company's strategy.
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Xiao Peng: The company is developing a self-driving chip and plans to release a new car in collaboration with another company. The stock price experienced volatility, potentially due to concerns about the feasibility of the project and the impact on existing marketing plans.
Final Thoughts
The market exhibited a mix of optimism and caution, driven by economic data, geopolitical events, and company-specific developments. While some sectors showed strength, particularly those related to AI, others faced challenges. Investors should remain vigilant and carefully consider risk management strategies in this dynamic environment. Remember to approach speculative investments cautiously and be prepared for potential losses.
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