Asia Shares Edge Higher With Jackson Hole in Focus: Markets Wrap
(Bloomberg) — Asian stocks broadly strengthened on Monday ahead of key central bank decisions in the region this week and the annual meeting at Jackson Hole. A gauge for the region’s stocks edged higher, extending Friday’s gains. Equity markets in Japan fluctuated, while those in Australia edged lower. US futures contracts were up in early Asian trading.
Stocks close higher Friday as market comeback lifts S&P 500 to best week of 2024
U.S. stocks rose on Friday as investors closed out the best week of 2024, part of a market comeback from a violent rout to begin August. The S&P 500 added 0.2% to 5,554.25, while the Nasdaq Composite gained 0.21% to 17,631.72 on Friday. The Dow Jones Industrial Average rose 96 points, or 0.24%, to 40,659.76. For the week, the S&P 500 added nearly 3.9%, its best week since November 2023. The Nasdaq gained 5.2%, while the 30-stock Dow advanced 2.9% on the week. Following the comeback this week, the S&P 500 is now just 2% away from its mid-July record high. Data this week helped assuage a jittery market. Retail sales data released Thursday came in much stronger than economists expected, while weekly jobless claims fell. Both offered evidence that recession fears, which helped spark a global sell-off earlier this month, were overblown.
Oil Declines at Week’s Open With Gaza Talks and China in Focus
(Bloomberg) — Oil declined for the fourth time in five sessions as traders tracked US-led efforts to secure a cease-fire in the 10-month old conflict between Israel and Iran-backed Hamas in the Gaza Strip. Brent fell toward $79 a barrel, while West Texas Intermediate was near $76. Israel initially voiced cautious optimism over the prospect of a pause in the fighting.
Gold rallies to record high on softer dollar, rate-cut expectations
Gold prices soared to an all-time high on Friday as the dollar weakened on growing expectations for an interest-rate cut from the Federal Reserve in September, and as tensions in the Middle East bolstered demand for bullion. Spot gold was up 1.5% to $2,493.66 per ounce after hitting a record high of $2,500.99 earlier. U.S. gold futures rose 1.6% to $2,532.10. Bullion has risen 2.6% this week. The dollar index fell 0.3% and was on track for a fourth week of losses, making gold more appealing for buyers overseas.
Citi’s Economic Gauge Presages More Commodity-Hedge Unwinding
(Bloomberg Intelligence) — The persistent negative reading in Citigroup’s Economic Surprise Index reflects the market’s anxiety over how high US rates and stagnant China credit growth could impact global growth, evident in hedge funds slashing bullish bets in oil and copper as well as negative US bond-yield spreads. A shaky oil-demand outlook could send oil back to $70 in 2H.
Vanguard, BlueBay Bet There’s More Juice in BOJ Rate-Hike Trades
(Bloomberg) — A handful of big-name investors are still betting on more interest rate hikes in Japan in the coming months, sticking to their guns despite a sharp cut in market pricing on the likelihood of more tightening following the latest selloff. Vanguard, the world’s No. 2 asset manager, has doubled down on its short position in Japanese government bonds.
Trump, Harris to Turbo Charge Race With Convention, Rival Events
(Bloomberg) — The race for the White House will reach a fevered pitch this week, with Vice President Kamala Harris and Republican nominee Donald Trump battling for momentum and attention around the Democratic National Convention in Chicago. Harris spent Sunday on a bus tour through the battleground state of Pennsylvania, looking to grow the coalition.
Israel, Hamas Accuse Each Other of Imperiling a Cease-Fire Deal
(Bloomberg) — Israel and Hamas blamed each other for impeding a cease-fire and hostage deal as the top US diplomat arrived in Tel Aviv to press for an agreement. Mediators say the current round of negotiations have brought the two sides closest to an official pause in fighting in months. But objections from both sides on Sunday raised the chances of renewed stalemate.
PBOC Rate Regime Shift Is Underway, Cuts Still Ahead: Economics
(Bloomberg Economics) — The People’s Bank of China’s apparent shift to a short-term rate as its main policy lever could take it another step closer to a market-driven approach for pricing bank loans. But it’s not shaping up to be a smooth transition.
Is AI Driving US Productivity Boom? Data Say Maybe So: Economics
(Bloomberg Economics) — Over the past four quarters, the US has enjoyed a solid run of real GDP growth. That could be a statistical blip that will be revised away as the Bureau of Economic Analysis refines its estimates. But if it survives, it will be a surprising development, because over the same period, the unemployment rate has crept up.
Political Turmoil Threatens Baht Resurgence as Traders Await BOT
(Bloomberg) — The Thai baht’s recent rally is under threat as markets digest the nation’s latest political drama ahead of this week’s central bank policy meeting. The baht has been one of the region’s top performing currencies since the start of July, aided partly by a rebound in tourism, after hitting a near two-year low against the dollar in May.
Trump to Visit Border in Bid to Counter Harris Convention Speech
(Bloomberg) — Republican Donald Trump will travel to the US-Mexico border later this week, part of a push by his campaign to ratchet up political pressure and steal attention from Kamala Harris as Democrats celebrate her presidential nomination at their national convention in Chicago. Trump will travel to Montezuma Pass, Arizona on Thursday.
Harris Holds Slight National Lead Over Trump, Post-ABC-Ipsos Poll Finds
Vice President Kamala Harris holds a narrow lead over former president Donald Trump in the presidential election, a notable improvement for Democrats in a contest that a little more than a month ago showed President Joe Biden and Trump in a dead heat, according to a Washington Post-ABC News-Ipsos poll.
UK Property Buyers Return to Market After BOE Interest Rate Cut
(Bloomberg) — Britain’s prospective home buyers stepped up their search for property after the Bank of England’s first reduction in interest rates since the start of the pandemic, Rightmove Plc said. The online property portal said the number of buyers contacting estate agents to view houses for sale jumped 19% from a year ago.
Westpac Shares Rise as Profit Gains, Margin Pressure Eases
(Bloomberg) — Westpac Banking Corp.’s profit edged higher as pressure on margins eased and mortgage lending grew faster than the wider industry, offsetting a fragile outlook for the nation’s economy. Unaudited net profit came in at A$1.8 billion, $1.2 billion, in the three months to June 30, according to a statement Monday.
Huge Returns on Catastrophe Bonds Draw Scrutiny After Beryl
(Bloomberg) — A strategy that’s delivered specialist investors huge returns is now facing scrutiny, amid concerns that its risk-reward dynamics might be skewed against some issuers. Catastrophe bonds, which are issued by insurers, reinsurers and governments seeking an extra layer of disaster coverage, have been handing investors double-digit returns.
Stonepeak, I Squared, Actis, 4 others submit bids for O2 Power in $1 bn deal
(MINT) – New Delhi: The sale of leading renewable energy platform O2 Power has attracted non-binding offers (NBOs) from seven large entities, two people aware of the development said, in what could be one of the largest green energy deals in India.
Welcome To NDA Family: Union Minister’s Post Hints At Champai Soren’s Big Switch
New Delhi: Champai Soren made it clear on Saturday that he is not happy with Jharkhand Mukti Morcha (JMM) but what still remains unclear is whether he will join the Bharatiya Janata Party, BJP, or explore the other options. Amid the suspense, Union Minister Jitan Ram Manjhi has shared a post to indicate that the National Democratic Alliance, NDA, is all set to welcome Soren.
Applied Materials shares dipped 1.9% on Friday, after the semiconductor capital-equipment company gave a fourth-quarter forecast that was in line with expectations, disappointing bullish investors who were looking for a bigger payoff from AI spending. It also reported third-quarter results that topped the analyst consensus
THIRD QUARTER RESULTS: Adjusted EPS $2.12 vs. $1.90 y/y, estimate $2.03. Net sales $6.78 billion, +5.5% y/y, estimate $6.68 billion. Adjusted gross margin 47.4% vs. 46.4% y/y, estimate 47.1%. FOURTH QUARTER FORECAST: Sees net sales $6.53 billion to $7.33 billion, estimate $6.93 billion. Sees adjusted EPS $2.00 to $2.36, estimate $2.15. Morgan Stanley analyst Joseph Moore (equal-weight, PT to $224 from $223): Sees minimal indication of NAND (flash memory chip) spending recovery thus far, the way that the quarter played out significantly reduces near-term risks around export controls.
Bayer shares rose 9% following a significant win for the firm in the litigation over its Roundup weedkiller
A US appeals court concluded that federal regulations governing the pesticide’s warning label supersede Pennsylvania laws under which a Roundup user in the state claimed Bayer’s Monsanto unit should have warned them about cancer risks. Bloomberg Intelligence litigation analyst Holly Froum writes that the appeal victory could put the case on the road to the Supreme Court. Now that a US Supreme Court review is in play again, Froum says Bayer’s exposure in the Roundup litigation could fall within its $16b reserve. Sees a 60% chance of state cases settling. Barclays, equal weight; Analyst Emily Field says that the ruling wasn’t expected, so the positive share-price reaction makes sense. The company sees a positive US Supreme Court ruling as potentially bringing the litigation to an end, affecting all current cases as well as removing legal standing for any future cases to be tried. It’s another chance for the biggest overhang for the stock to be removed, though there’s still a long way to go.
JD.com ADRs jumped 8.5% after the Chinese e-commerce company reported revenue and adjusted earnings that exceeded Wall Street expectations
SECOND QUARTER RESULTS: Net revenue 291.40 billion yuan, +1.2% y/y, estimate 290.51 billion yuan. Adjusted earnings per American depositary receipts 9.36 yuan vs. 5.39 yuan y/y, estimate 6.21 yuan. Adjusted Ebitda 13.53 billion yuan, +30% y/y, estimate 11.69 billion yuan. Adjusted Ebitda margin 4.6% vs. 3.6% y/y. JPMorgan, Neutral, PT $33/HK$130: Co.’s profit beat was due to surprising surge in margins from JD Logistics, decent margins from JD Retail and strong non-operating profit, analysts including Andre Chang write in note. Co.’s progress of share repurchase was solid, but that leaves just $0.4 billion quota left in the current program.
China blames Philippines for Coast Guard collision at Escoda Shoal, warns it to stop provocation
The Chinese Coast Guard said a Philippine vessel acted in an unprofessional and dangerous manner, ignoring repeated warnings and deliberately colliding with a Chinese ship. It’s the latest confrontation between the countries’ vessels in waters around the Spratly Islands in the South China Sea, which both countries claim as their own.
In major policy shift, Singapore announces unemployment support scheme
The country’s prime minister, Lawrence Wong, made the announcement during his National Day Rally speech, in which he spoke of Singapore’s economy, education and housing policies. The scheme, titled the SkillsFuture Jobseeker Support scheme, is aimed at helping lower- and middle-income workers and will provide involuntarily unemployed workers a total of up to 6,000 Singapore dollars, $4,561 for six months, subject to conditions. Wong said the qualifying worker has to go for training, career coaching, as well as job matching services during the time, saying these are essential investments that you need to make in yourself to find better jobs. Workforce Singapore, the workforce development agency under Singapore’s Ministry of Manpower said on its website that the scheme will provide financial support to Singapore citizens who were previously earning an average monthly income below SG$5,000 while they search for a new job.
Trump, Harris inflation arguments are questionable, Chicago Fed president says
Chicago Federal Reserve President Austan Goolsbee warned against misrepresenting the inflationary impacts of corporate price hikes and tariffs, but steered away from directly speaking on the presidential race. Donald Trump and Vice President Kamala Harris have both made lowering costs a focal point of their economic policy proposals as voters rank the economy as their top priority in this election. The Fed is preparing for its annual meeting in Jackson Hole, Wyoming, this coming week, where markets will be looking for signals of an interest rate cut.
UBS to liquidate $2 billion real estate fund as office downturn bites
UBS is to liquidate a $2 billion real estate fund it acquired when it bought Credit Suisse, the Swiss bank said on Thursday, in the latest sign of investors selling out of troubled commercial property markets. The fund, which holds four-fifths of its assets in offices, had faced investor redemption requests but the Swiss bank said meeting those would require selling assets at an inopportune time, impacting existing investors. UBS concluded it was better to wind down the entire fund.
With Harris-Walz economic plan, America’s family and child-care crisis is in the election
The Kamala Harris administration economic policy platform outlined on Friday would bring back a fight over the expanded child tax credit Joe Biden has tried and failed to pass despite bipartisan support. Harris running mate Tim Walz made child care a focus of his economic agenda as Minnesota governor, including state tax credits, and support for working families and the child-care industry, while Trump running mate J.D. Vance has also voiced support for an expanded child tax credit. Many business executives see lack of affordable, accessible child care as a labor market constraint, but the U.S. remains an outlier among developed economies in its lack of policy support.
The first SpaceX spacewalk: What the Polaris Dawn commander says about the bold upcoming mission
SpaceX is preparing to launch its next private mission from Florida on Aug. 26, and it will be the company’s first attempt at a spacewalk. The four-person crew is made of billionaire and Shift4 founder Jared Isaacman, his colleague Scott Poteet, and a pair of SpaceX employees, Anna Menon and Sarah Gillis. The Polaris Dawn mission is the first of three flights Isaacman purchased from SpaceX in 2022 for his human spaceflight effort known as the Polaris Program.
Venezuelan opposition protests as election dispute drags on
Venezuela’s political opposition and its supporters gathered in cities around the country on Saturday to demand recognition of what they say is their candidate’s resounding victory in a presidential vote nearly three weeks ago. The country’s electoral authority, considered by the opposition to be an arm of the ruling party, has said President Nicolas Maduro won his third term in the July 28 contest, with just under 52% of the vote. But the opposition, led by former lawmaker Maria Corina Machado, has published online what it says are 83% of voting machine tallies, which give its candidate Edmundo Gonzalez a hearty 67% support. The disputed vote has thrown the economically beleaguered nation into political crisis, and a government crackdown on protests has led to at least 2,400 arrests. Clashes connected to the protests have also led to at least 23 deaths.