| North Korea fires rocket. Nvidia touches $1 trillion valuation. Goldman considers axing hundreds more jobs. Here's what you need to know today. North Korea this morning fired a projectile the country claims to be a space launch vehicle, just days after after leader Kim Jong Un pledged to put a spy satellite in orbit to monitor US forces and their allies. The launch sparked a missile alert in parts of Japan, while an alert warning residents in the South Korean capital to take cover was later said to have been sent in error. Both countries said earlier this week that any launch using ballistic missile technology would be a breach of United Nations Security Council resolutions and urged North Korea to abandon the launch. Nvidia's market valuation fleetingly crossed the $1 trillion threshold on Tuesday after the chipmaker's artificial intelligence prospects vaulted it into an elite club of just five American companies. The company joined tech behemoths Alphabet, Amazon, Apple and Microsoft in the trillion-dollar club after stock rose as much as 7.7% early in the session, before retreating in the afternoon to close with a $990.7 billion valuation. Nvidia's shares have soared since last week when it gave an AI-fueled sales forecast that shattered Wall Street's estimates, then continued to gain after it unveiled more AI products. But not everyone's keen on the stock. Here's what Cathie Wood has to say. Goldman Sachs is considering another round of job cuts amid a muted dealmaking environment that has dented revenues across Wall Street.
The investment bank is working on what would be its third round of job cuts in under a year, sources say. The firm eliminated several hundred jobs in September, followed by a much bigger round of cuts at the start of this year. The moves this time are expected to include more-senior employees at the firm. Banking executives across the industry are re-examining costs as a rebound in dealmaking takes longer to materialize. Morgan Stanley is cutting roughly 3,000 jobs this quarter, Bloomberg has reported. Twitter is now worth just one-third of what Elon Musk paid for the social-media platform, according to Fidelity, which recently marked down the value of its equity stake in the company. Musk acknowledged he overpaid for the platform, which he bought for $44 billion, including $33.5 billion in equity. It's unclear how Fidelity arrived at its new, lower valuation. Meanwhile, Musk met with China's Foreign Minister Qin Gang in Beijing Tuesday, ahead of an expected visit to the Shanghai Tesla factory. Asian stocks are poised to slide after momentum in US equities faded and Congress considered the debt accord that's needed to head off a default.
Futures for Japan and Australia suggested small declines while contracts for Hong Kong fell more than 1%, after the S&P 500 closed little changed. Purchasing manager index data for China will be watched for any signs of change in the economy's wobbly recovery, which has weighed on its share markets and currency. A drop in Treasury yields from the highest levels since March reflected hopes the Congress will pass the debt deal. Investors are facing the potential that the central bank pivot narrative will again be reset to a later date, as their focus turns toward Friday's payrolls report. Traders are seeing strong odds for a Federal Reserve interest-rate hike next month, and they are certain one will come in July if the central bank ends up standing pat this time round. That also makes the still-strong bets on rate cuts vulnerable to the same grim fate as similar previous wagers — like those that saw three rate reductions by the end of 2022 as of June 30 last year.  The continued mismatch between expectations and reality could be due to a key blind spot in the way economists and strategists are looking at the contradictory impact of the Fed's policy settings. Yes, it has raised its benchmark for borrowing costs to match the 2007 peak in an epic tightening shift. But at the same time its balance sheet has been trimmed only modestly and remains enormous. That helps to explain why bond yields have remained low compared to the cash rate in a way that is at odds with previous cycles. The potential is that the Fed is going to need to hike further yet to counter the impact of its own balance sheet, as signaled by the extreme gap between the Fed funds target and the Taylor Rule that estimates where the rate needs to be. Garfield Reynolds is Chief Rates Correspondent for Bloomberg News in Asia, based in Sydney. | 
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