- Yen Advances, Treasuries Rise as Fed Move Nears: Markets Wrap
(Bloomberg) — The yen rose further against the dollar, while falling Treasury yields broadened an emerging-market currency rally to Asia after fresh data sustained expectations for the Federal Reserve to begin policy easing. Stocks fluctuated in the region, with the yen’s rise to around 141 per dollar pressuring those in Japan, an export-oriented economy. - Dow closes 200 points higher, S&P 500 posts four-day win streak as tech giants rally
Stocks rose on Thursday as investors continued to shake off a tough start to September and bought the dip in
tech stocks in anticipation of a rate cut by the Federal Reserve next week. The S&P 500 gained 0.75% to close
at 5,595.76, marking its fourth winning day. The Dow Jones Industrial Average added 235.06 points, or 0.58%,
to end at 41,096.77. The Nasdaq Composite added 1%, closing at 17,569.68. The S&P 500 has cut its
September losses to just 0.9% and sits just about 1.3% from a new record. - Oil prices extend recovery rally to cap volatile week
Oil prices rose on Friday, extending a rally sparked by output disruptions in the U.S. Gulf of Mexico,
where Hurricane Francine forced producers to evacuate platforms before it hit the coast of Louisiana.
Brent crude futures rose by 34 cents, or 0.5%, to $72.31 per barrel by 0016 GMT. U.S. West Texas
Intermediate crude futures rose by 38 cents, or 0.6%, to $69.35 a barrel. If those gains hold, both
benchmarks will break a streak of weekly declines, despite a rough start that saw Brent crude dip below $70
a barrel on Tuesday for the first time since late 2021. At current levels, Brent is set for a weekly increase of
about 1.7%, and WTI is set to gain over 2%. Oil producers assessed damages and conducted safety checks on
Thursday as they prepared to resume operations in the U.S. Gulf of Mexico, as estimates emerged of the loss
of supply from Francine. - Gold rallies to record high on U.S. rate-cut optimism
Gold prices soared to an all-time high on Friday as the dollar weakened amid prospects of a U.S. interest rate
cut next week, while palladium has gained 15% so far this week. Spot gold was up 0.2% at $2,565 per ounce,
as of 0258 GMT, after hitting a record high of $2,567.93 earlier in the session. Bullion has gained 2.7% for the
week so far. U.S. gold futures rose 0.5% to $2,593.40. The dollar fell to a one-week low, making gold less
expensive for other currency holders. - Elon Musk Secretly Funded Attacks on George Soros-Backed Prosecutor in Texas –WSJ
Elon Musk secretly channeled hundreds of thousands of dollars into a local race in Travis County, Texas, in an
unsuccessful effort to unseat a prosecutor who had won the office with the backing of the investor and
Democratic donor George Soros. - Lagarde Offers No Help on Rate Cuts as ECB Waits for Answers
(Bloomberg) — Clues on when the European Central Bank will next cut interest rates were in short supply on
Thursday, with President Christine Lagarde and colleagues awaiting data on how drastically the economy is
deteriorating and how that will shift inflation. - European Central Bank cuts interest rates again and lowers growth forecasts
The European Central Bank on Thursday delivered a quarter-point interest rate cut, marking its second
reduction to the deposit rate this year. The widely anticipated move comes after a period of sluggish
economic growth across the euro zone and cooling inflation, which fell back toward the central bank’s 2%
target in August. The ECB lowered its 2024 growth forecast to 0.8%, down slightly from an earlier projection
of 0.9%, citing weaker contribution from domestic demand over the next few quarters. - Over Half of BOJ Watchers See Next Rate Hike Coming in December
(Bloomberg) — Just over half of Bank of Japan watchers see authorities conducting their next rate hike in
December, while none expects a policy move when the board meets next week, according to a Bloomberg
survey. Some 87% of 53 economists forecast that the bank will raise borrowing costs by the end of January,
with 53% pegging December as the most likely month for the adjustment, according to the poll. - US Budget Gap Reaches $1.9 Trillion as Fiscal Year Nears End
(Bloomberg) — The US federal budget deficit surged in August with one month to go until the end of the fiscal
year as higher interest costs continued to weigh on the overall balance. The $1.9 trillion gap for the 11
months through August was up 24% from the same period last year, Treasury Department data released
Thursday showed. - Wholesale prices rose 0.2% in August, in line with expectations
The producer price index increased 0.2% in August, the Bureau of Labor Statistics said Thursday. That
matched the Dow Jones consensus estimate. Initial filings for unemployment benefits totaled 230,000 for the
week ended Sept. 7, up 2,000 from the previous period and higher than the 225,000 estimate. - Trump Criminal Case in Georgia Narrowed as Some Counts Tossed
(Bloomberg) — Donald Trump scored a legal victory Thursday when a Georgia judge narrowed the state’s
criminal case against the former president over his attempts to overturn the 2020 election results. Superior
Court Judge Scott McAfee dismissed three counts in the sprawling racketeering case against more than a
dozen defendants, including two against Trump. - Trump Pledges No Taxes on Overtime in Pitch to Blue-Collar Vote
(Bloomberg) — Republican Donald Trump pledged to eliminate taxes on overtime pay at a rally days after a
shaky debate performance, as the presidential nominee looked to turn the page with a new populist tax cut
proposal. We will end all taxes on overtime, Trump said Thursday at a rally in Tucson, Arizona. - China’s Steps to Cool Bond Rally Sap Demand for Wealth Products
(Bloomberg) — Signs that Chinese officials are pushing back on the record-breaking bond rally are deterring at
least one group of investors that have been a key driver of recent gains. Net purchases of wealth-
management products tumbled 90% in August from the previous month to just one-third of this year’s
average, according to data from Puyi Standard. - Wells Fargo Drops as US Seeks Fixes to Money-Laundering Controls
(Bloomberg) — Shares of Wells Fargo & Co. fell after the bank reached a deal with the Office of the
Comptroller of the Currency requiring the lender to beef up systems for detecting money laundering and
complying with international sanctions. - Carlyle Is Said to Pick IPO for StandardAero After Sale Attempt
(Bloomberg) — Carlyle Group Inc. has decided to take StandardAero Inc. public after trying to sell the aircraft
maintenance services provider, according to people familiar with the matter. The alternative asset manager
decided to pursue an initial public offering of StandardAero because bids submitted this week valued the
company below what it’s expected to reach in a listing, said the people, who asked not to be identified
because the information was private. - Roche Holding AG’s shares slid 2.2% after its closely-watched experimental obesity pill was tied to side
effects
Roche said results of a small study showed high rates of nausea and vomiting, as well as other side effects.
Though Roche’s study only lasted four weeks, investors are tracking it after encouraging early data on the
effectiveness of the drug, known as CT-996, sent the company’s shares soaring in July. Roche is pushing its
experimental obesity drugs forward quickly in a bid to catch up with Novo Nordisk A/S and Eli Lilly & Co. in
the weight-loss market, which is forecast to top $130 billion annually by the end of the decade. Roche argued
that gradually increasing the dose could mitigate side effects. Five out of six patients who slowly took more
reported nausea, while one developed chronic reflux and two had vomiting, the Swiss drugmaker said.
Patients who increased their dose more quickly were more likely to have side effects, with six out of seven
developing nausea and chronic acid reflux, and five of seven reporting vomiting. - Gilead shares rose 2.7% after the drugmaker said its twice-yearly prevention shot prevented nearly all
HIV cases in a large trial
Analysts say the results likely accelerates approval timelines for the drug and could help expand the market
for PrEP. The company said it has stopped the blinded phase of its trial of HIV drug lenacapavir and will offer
the drug to all study participants after it reduced infections by 96%. Twice-yearly lenacapavir demonstrated
superiority to once-daily Truvada. Two incident cases among 2,180 participants, corresponding to 99.9% of
participants not acquiring HIV infection in the lenacapavir group. This is the second pivotal Phase 3 trial to
demonstrate superior efficacy for twice-yearly lenacapavir for the investigational use of HIV prevention as
PrEP. - Micron Technology shares fell 3.8% after BNP Paribas Exane downgraded the chipmaker by two
notches, to underperform from outperform
With the downgrade, BNP becomes the only firm tracked by Bloomberg to have the equivalent of a sell rating
on the stock. Price target cut to a Street-low of $67, down from $140. While some investors correctly
anticipate downside risk to near-term results, we think Micron will underperform AI peers through ’25, writes
analyst Karl Ackerman. The firm says capacity oversupply of high-bandwidth memory chips leads to a faster
than anticipated market correction of conventional DRAM ASPs, referring to average selling prices for DRAM
memory chips. Even though the stock has dropped 40% off a June peak, the risk-to-reward at current level
remains unfavorable. - Kroger Co.’s stock rose 7.2% Thursday, after the grocery chain beat profit estimates for the second
quarter and raised the low end of full-year same-store sales guidance, offsetting quarterly sales that fell
slightly short of estimates
Chief Executive Rodney McMullen outlined the change in consumer behavior that’s starting to emerge
among its more affluent customers, who are joining its low-income customers in seeking value. The executive
said customers are buying lower-priced meat cuts, are overall buying less and focusing squarely on essentials.
Many are stocking up at the start of a month and then tapering spending after that. Consumers are also
eating more at home and less at restaurants. The company had net income of $466 million, or 64 cents a
share, for the quarter, after a loss of $180 million, or 25 cents a share, in the year-earlier period. Adjusted for
one-time items, EPs came to 93 cents, ahead of the 91-cent consensus. Sales rose to $33.912 billion from
$33.853 billion a year ago, and were just below the $34.089 billion consensus. Same-store sales excluding
fuel rose 1.2%, while consensus was expecting 1.1%. - Moderna shares fell 12.4% after it said it aims to reduce its research and development budget by about 20% over the next three years as it tries to find a path to profitability following disappointing vaccine sales
The biotech is discontinuing five programs in its pipeline and slowing some late-stage studies of treatments for latent and rare diseases to achieve the $1.1 billion cut from its annual R&D budget by 2027. The company’s revenue projection for next year was below what analysts expected and it announced it was pushing back its target to break even from 2026 to 2028. Questions remain about whether Moderna has enough cash to fund its plans to break even without raising additional equity, Jefferies analyst Michael Yee said. The company sells two products, a vaccine for Covid and another for RSV. It projected sales of between $2.5 billion and $3.5 billion next year. It has said this year’s sales will range between $3 billion and $3.5 billion, down from its previous outlook of about $4 billion. - Oracle Corp. said annual revenue will rise to at least $104 billion in fiscal 2029, an optimistic signal on the growth prospects of the software maker’s cloud infrastructure business
Executive Vice President Doug Kehring delivered the forecast Thursday at Oracle’s annual briefing for financial analysts. Oracle also raised its sales outlook for fiscal 2026 to at least $66 billion from a prior target of $65 billion. On average analysts estimated revenue of $64.5 billion for 2026. The company, known for its database software, is focused on expanding its toehold in cloud infrastructure, which rents out computer power and storage to compete with Amazon.com, Microsoft and Google. Oracle’s cloud has developed a reputation for success with generative artificial intelligence workloads, the company touted customers including Reka and Elon Musk’s xAI. The company has also struck deals with its larger cloud infrastructure rivals to allow its namesake database software to run more easily on their platforms. Most database customers haven’t yet moved to the cloud, Kehring said during the event. Oracle has said moving on-premise database customers to the cloud will be a major pillar of revenue growth. - Adobe Inc. shares fell 9.1% afterhours, after the company delivered an outlook that failed to quell investor impatience for new artificial intelligence tools to start generating cash
Known for its software for creative professionals, Adobe has been adding AI features to its applications, such as embedding its proprietary technology, Firefly, into products like Photoshop and Illustrator. But investors are keen to see evidence that Adobe can make money from those tools, especially as anxiety rises that small startup rivals will take business from traditional software companies. Those concerns seemed to be reaffirmed by a fiscal fourth-quarter sales guidance that fell short of Wall Street estimates. A closely watched metric that tracks the growth of recurring revenue in its creative software business, digital media net new annual recurring revenue, will be $550 million in the period ending in November, the company said. Analysts, on average, estimated $561.1 million. Total revenue will be as much as $5.55 billion in the period, compared with analysts’ average estimate of $5.6 billion.
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