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On May 7th, CNBCs Jim Cramer stated on Wednesday that cloud computing giants absolutely cannot skimp on their investment in artificial intelligence (AI). Cramers comments came after some described the surge in data centers and AI-related stocks as a "build it and theyll come" model—companies aggressively investing in infrastructure in the hope of eventually attracting customers. However, Cramer argued that applying this famous line from the movie *What Happens When It Comes* to the AI boom ignores a crucial point: customers already exist, and cloud service providers eager to meet demand are working hard to satisfy it. "The key to this data center boom is that its not a fantasy story, because data centers are being built, customers are actually flocking in, theyve already secured their places, and the momentum is building until every seat is filled," he said. He cited Amazon as an example to demonstrate that a comprehensive AI strategy is no longer just a pipe dream. Cramer quoted Amazons CEO regarding the need for continued investment: "If you dont build this stadium, customers will go elsewhere, and youll miss out on a lot of business opportunities."The Hang Seng Tech Index rose more than 3% intraday, the Hang Seng Index rose 1.54%, Kuaishou (01024.HK) rose more than 7%, Hua Hong Semiconductor (01347.HK) rose more than 6%, and Tencent Music (01698.HK), Kingsoft (03888.HK) and Baidu (09888.HK) all rose more than 5%.On May 7th, according to foreign media reports, Malaysian palm oil futures fell for the second consecutive trading day on Thursday, pressured by weakness in rival edible oils, although stronger crude oil prices limited the decline. The most active palm oil futures contract fell 38 ringgit, or 0.83%, to 4,541 ringgit per metric tonne in early trading. The most actively traded soybean oil contract in Dalian fell 1.43%, and the palm oil contract fell 1.92%. Soybean oil prices on the Chicago Board of Trade fell 0.63%. In early trading, oil prices rose by about $1, rebounding from the previous days plunge, as investors weighed the success of the Middle East peace agreement. Stronger crude oil futures made palm oil a more attractive biodiesel feedstock option. The ringgit, the currency for palm oil, rose 0.26% against the US dollar, making it more expensive for buyers holding foreign currency to purchase palm oil. Analysts say Malaysian palm oil prices could rise by about 12% to 5,200 ringgit per tonne by mid-July, as the war between the US and Israel over Iran has led to higher energy prices, stimulating demand for biodiesel and tightening supply.On May 7th, Bank of America issued a report stating that HSBC Holdings (00005.HK) and Standard Chartered Group (02888.HK) will hold investor seminars in Hong Kong from May 19th to 21st. The report anticipates this event will be a positive catalyst for both banks, as management will showcase strong operating trends in Asia, particularly in wealth management and capital markets. The bank further noted that given HSBC Holdings winning position in the Asian market, its high-quality deposit business, and managements effective strategy execution amplifying its competitive advantage, the bank maintains a positive outlook on HSBC Holdings, giving it a buy rating and a target price of HK$158.25. Additionally, the bank maintains a neutral rating on Standard Chartered UK shares.On May 7th, Citigroup issued a research report stating that CK Hutchison Holdings (00001.HK) announced the sale of its 49% stake in its UK telecommunications joint venture, Vodafone Three, to Vodafone for a cash consideration of £4.3 billion (approximately HK$45.5 billion). The bank believes this sale is a value-added transaction for CK Hutchison, and expects management to continue seeking opportunities to unlock value, which will help narrow the stocks current significant NAV discount of approximately 58%. CK Hutchison expects to record an after-tax gain of approximately HK$4.7 billion upon completion of the transaction. Citigroup points out that the sale price is approximately 9% higher than its valuation of Vodafone Three (approximately HK$41.7 billion) and approximately 13% higher than CK Hutchisons net investment at the end of 2025 (approximately HK$40.1 billion). The bank expects the transaction to be completed as early as the end of 2026. Citigroup accordingly raised its target price for CK Hutchison from HK$78 to HK$81.5 and maintained its buy rating.

Asian Stocks Rise; China Plans to Relax COVID Measures; However, Concerns Remain

Aria Thomas

May 30, 2022 11:21

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China's relaxing of several COVID-19 restrictive measures and U.S. markets' greatest week since November 2020 before Monday's Memorial Day weekend sent Asia Pacific stocks higher on Monday morning.


The Nikkei 225 gained 2% by 10:24 p.m. ET (2:24 a.m. GMT), while the KOSPI gained 1.27 percent.


The S&P/ASX 200 increased 0.91 percent in Australia.


Hong Kong's Hang Seng Index rose 2.19 percent .


The Shanghai Composite rose 0.55 percent, while the Shenzhen Component rose 0.04 percent.


Both the S&P 500 and Nasdaq 100 contracts were higher, a possible indication that the rebound could continue. As institutional investors rebalance their portfolios in anticipation for the end of the month, the S&P 500 erased its May losses and ended a streak of seven straight weekly losses.


As the European Union (EU) failed to agree on a revised package of Russian sanctions in response to Russia's invasion of Ukraine on February 24, the dollar remained stable while the euro fluctuate. The U.S. holiday prevents the trading of cash Treasuries in Asia.


China recorded fewer cases of COVID-19 in both Beijing and Shanghai, encouraging the government to relax some restrictions in an effort to stimulate the economy.


After one of the worst starts to the year for global markets, the key question for investors is whether the bottom of the recent selloff is near. Investors have been buying the dip. Concerns continue, however, regarding stricter monetary policies from central banks, growing food inflation resulting from the conflict in Ukraine, and China's COVID-19 measures.


Bloomberg quoted Citigroup (NYSE:C) Australia head of investment experts Maheebeen Zaman as saying, "We are in the midst of a bear market rally."


Treasury yields are expected to peak in 2022, according to Zaman. "I believe the market will trade in a narrow range as investors try to determine how soon the next recession will arrive and how rapidly inflation will decline," he added.


As of Wednesday, the Fed will also begin reducing its $8.9 trillion balance sheet and will also print its Beige Book assessment on regional economic conditions. Presidents John Williams of the New York Fed and James Bullard of the St. Louis Fed will both speak at separate events on Wednesday, with President Loretta Mester of the Cleveland Fed discussing the economic outlook the next day.


Friday, the United States will release its May employment report, including non-farm payrolls. Tuesday will see the release of the Eurozone consumer price index, as well as China's manufacturing and non-manufacturing purchasing managers indexes.


Later in the day, EU leaders will convene in Brussels for a two-day extraordinary conference to discuss the war in Ukraine, defense, inflation, energy, and food security. The Food and Agriculture Organization of the United Nations will also release its monthly food price index on Friday, just as global supply concerns reach their peak.

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