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Friday's Must-Read News: Rubrik IPO, Stagflation, and China Overcapacity

Rubrik’s (RBRK) successful initial public offering (IPO) is a positive indicator for stock markets. Shares opened up by 15.63% in its debut. Backed by Microsoft (MSFT), its addition to the NYSE shows that the market continues to hunger for speculative firms that lose money.

On Thursday, stock markets did not expect a sharply weaker first-quarter GDP report. The U.S. Commerce Department reported GDP grew at 1.6% annualized. Economists thought it would grow by 2.4%. Consumers increased their spending by 2.5%, compared to 3.3% in Q4/23.

The personal consumption expenditure price index increased at a 3.4% annualized rate in Q1. This is a shocking number for stock markets since the Fed looks at the core PCE prices very closely. In response to the stagflationary data, Treasury bond yields rose to near their highest levels of the year. Nearly every Treasury bill yields over 5%. Only the US 30-year and the US 10-year treasury trades at 4.81% and 4.70%, respectively.

As usual, the S&P 500 (SPY), Dow Jones, Nasdaq (QQQ), and Russell 200 (IWM) dismissed the troubling data.

In addition to the economic data, markets need to watch out for China’s economic struggles. The government subsidized the solar panel and electric vehicle market.
Now, Chinese EV makers are trying to flood both the U.S. and the European Union countries with vehicles.

Be wary of Tesla’s (TSLA) recent post-earnings rally. The global supply glut will have repercussions for EV and lithium mining firms like Albemarle (ALB).

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