Meta enhances WhatsApp with Artificial Intelligence assistant for businesses

Meta Platforms will be enhancing WhatsApp with an AI assistant to help businesses engage with customers, answer inquiries, and facilitate sales. Testing will begin in India, Singapore, and Brazil. Designed for the 200 million businesses on WhatsApp, this assistant aims to streamline customer support and commerce, as announced by CEO Mark Zuckerberg. Popular in Brazil, India, Indonesia, and Mexico, WhatsApp has over two billion users globally. Meta plans to introduce a Portuguese version of its Meta AI assistant next month and is exploring monetisation through a business version with paid features and click-to-message ads, which could generate $10 billion annually.

Nvidia’s record-breaking surge attracts investor confidence

Nvidia has consistently exceeded earnings and share-price expectations over the last year, with investors still seeing further potential. Nvidia recently announced the launch of new chips, leading to the Bank of America raising its price target to $1,500. Nvidia’s stock hit a record high of $1,214.90 last week, driven by its dominance in AI chip technology. It is currently the third-most valuable company globally, valued at nearly $3 trillion. Confident investors view its valuation as reasonable despite warnings of a potential bubble. Analysts expect Nvidia’s net income to rise significantly this fiscal year, with improved profit margins. Trading at 39 times future earnings, Nvidia remains attractive compared to other tech giants, with 65 out of 72 analysts rating it a “buy”.

Resilience in United States financial markets amid Federal Reserve tightening

United States financial markets remain resilient despite aggressive Federal Reserve tightening. The tightening in monetary policy has been due to three key factors: the privatisation of risk (where private markets absorb financial stress); substantial government spending driving gross domestic product growth, financed by high levels of government debt; and the Federal Reserve’s balanced approach of maintaining restrictive policies while mitigating downside risks and effectively communicating to limit market volatility. These factors have prevented significant systemic issues despite high interest rates.

Markets Movements

The euro fell 0.5% to a one-month low after French President Macron called a snap vote post-European Parliament elections. The political uncertainty impacted European equity futures and French bonds. A strong US jobs report influenced Asian currencies and led to a re-evaluation of Federal Reserve rate cuts. The yield on 10-year Treasuries rose for the third day, while Japan’s Topix gained 0.9%. Bitcoin and Ether fell slightly by 0.2% and 0.4%, respectively.

The Week Ahead

Today, South Africa will release Manufacturing Production data, the United Kingdom will report on the Unemployment Rate, and China will disclose both Consumer Price Index (CPI) and Producer Price Index (PPI) data. Wednesday brings the release of Gross Domestic Product (GDP) figures for the United Kingdom, Consumer Price Index (CPI) data for the United States, and the Federal Reserve’s Interest Rate Decision. Thursday will feature South Africa’s Gold and Mining Production data and the United States’ Producer Price Index (PPI) data. On Friday, the Eurozone and India will announce their respective Trade Balance and South Africa will report on Business Confidence data.

Market Performance as at 7 June 2024

Market Performance as at 7 June 2024

Source: FundFocus. Data as at 7 June 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.