Fitch Warns of Downgrade, Fed Considers Pause, and Nvidia's AI Dominance

Good morning, fellow chump profit seekers! Today we have some noteworthy updates that are making waves in the financial world. Let's dive right in and see what everyone is buzzing about.

1. Rating at Risk: Fitch Sounds the Alarm The tension surrounding the US debt-limit negotiations has escalated as Fitch Ratings issues a warning that the nation's prized AAA rating is under threat. A political standoff preventing a deal has Fitch contemplating a downgrade. Despite the looming X date, which marks the point at which Washington runs out of cash, analysts remain unconvinced by House Speaker Kevin McCarthy's optimism for a timely resolution.

2. Pausing, Not Stopping: Fed's Approach to Interest Rates Federal Reserve officials are leaning towards hitting the pause button on interest-rate increases at their upcoming June meeting. Heightened uncertainty over the economic outlook plays a significant role in this decision. However, policymakers are not ready to declare an end to their battle against persistent inflation. Minutes from the May meeting reveal that Fed officials are weighing various factors, including slow progress on inflation and a resilient labor market, against the possibility of a credit crunch. While some officials suggest a temporary pause in rate hikes for June, it remains a topic of debate.

3. Fighting Back: Microsoft Appeals UK Antitrust Ruling Microsoft is taking a stand against the UK antitrust watchdog's decision to block its $69 billion Activision Blizzard deal. The tech giant has officially filed an appeal with the Competition Appeal Tribunal, contesting the ruling. The European Union recently approved the deal, diverging from the UK's unexpected block. Despite the legal tussle, the Competition and Markets Authority stands firm on its decision to halt the deal.

4. AI Frenzy: Nvidia's Stellar Results Nvidia has set the AI world ablaze with its impressive financial results, revealing a surge in chip demand for artificial intelligence computing. As a result, stocks tied to this burgeoning technology have skyrocketed globally. Nvidia witnessed a staggering 29% surge in late New York trading, while its rival Advanced Micro Devices enjoyed a 10% jump. These results highlight Nvidia's exceptional performance in the AI frenzy, allowing it to weather the storm of a broader technology spending slowdown. Suppliers associated with Nvidia are also reaping the rewards, witnessing a surge in their shares.

Upcoming Highlights... As we move forward, European stocks show signs of minor gains, with investors weighing positive tech earnings against concerns over US debt-ceiling talks. Key central bank speakers to watch out for include Joachim Nagel from Bundesbank, Francois Villeroy de Galhau from the Bank of France, and Jonathan Haskel from the Bank of England. In terms of data releases, keep an eye out for Germany's GDP, Spain's PPI, and unemployment trends in Norway and Sweden. Lastly, earnings results from Generali and Orlen are eagerly anticipated.

What's Been Catching Our Eye Here are some interesting reads that have caught our attention in the last 24 hours:

• Germany makes a substantial defence order, acquiring tanks and howitzers.

• Former First Republic employees face a probe by the DOJ regarding stock trades.

• Xi Jinping's crackdown reshapes China's tech industry in his own image.

• Ackman draws parallels between Icahn and Archegos as stock prices take a plunge.

• NHS body states that England is unable to staff virtual hospital wards.

• Greece's Mitsotakis confirms a new election to be held on June 25.

• Rising Russian flows to Asia reshape the world's oil map.

That's all for today's Chump Profit Blog. Stay tuned for more updates on the ever-changing world of finance