Top News in Finance for July 5, 2023

KEY POINTS

Dive into this week’s key financial happenings with our succinct, easy-to-understand summaries of the most crucial economic events. Designed to keep you up-to-date, our roundup empowers you to navigate the week ahead and seize unfolding opportunities

• New regulations could limit Chinese firms’ access to US cloud computing resources, impacting companies like Amazon and Microsoft.
• Minutes from the Fed meeting expected to reveal the rationale behind pausing interest rate hikes.
• Meta Platforms set to launch Twitter competitor, ‘Threads’, through Instagram.
• Rivian Automotive shares see an upswing following reported production numbers beating estimates.
• Treasury Secretary Janet Yellen’s impending visit to China indicating possible changes in US-China relations.

Cloud Computing Clampdown

The Biden administration is reportedly crafting rules to curb Chinese firms’ access to American cloud computing services, particularly those involving artificial intelligence (AI). This would mean that big players like Amazon and Microsoft would need governmental approval to provide such services. This comes in response to China’s announced restrictions on exporting chip-manufacturing metals. The proposal has caused a slight dip in pre-market trading for both Microsoft and Amazon.

Fed Meeting Insights

Investors anticipate greater insight into the Federal Open Market Committee’s decision to halt interest rate hikes with the release of the minutes from its June meeting. The documentation may shed light on future actions regarding interest rates for the upcoming meeting on July 26. Additionally, factory orders data is set to be revealed later today.

‘Threads’ from Meta Platforms

Meta Platforms, the company behind Facebook, plans to introduce ‘Threads’, a rival to Twitter, under its photo-sharing platform Instagram. This comes following Twitter’s new rules limiting user posts, which caused a stir among advertisers and led to a 40% drop in ad revenue. In the lead up to the launch, Meta Platforms’ shares traded slightly lower in pre-market trading.

Rivian’s Rising Shares

Rivian Automotive’s shares have been buoyed by better-than-expected production numbers. The automaker produced 13,992 vehicles in the last quarter, outperforming analyst predictions of 12,562 vehicles. This news has bolstered Rivian’s shares by more than 3% in pre-market trading, even as competitor Tesla’s shares dipped slightly.

Yellen’s China Trip

U.S. Treasury Secretary Janet Yellen is set to meet with senior Chinese officials this week. As part of a bid to enhance engagement with China amid heightened economic rivalry, the U.S. is reportedly contemplating restrictions on AI chip exports from China. The meetings will address responsible management and communication of shared concerns between the world’s two largest economies, setting the stage for potential changes in U.S-China relations.