- Asian Stocks Extend Rally on China, US Sentiment: Markets Wrap
(Bloomberg) — Stocks in Asia extended gains as risk appetite across financial markets got a further boost from
China’s latest stimulus measures and upbeat US momentum. Equities in Australia advanced, while China’s
benchmark CSI 300 Index is set for its biggest weekly gain in almost a decade after officials pledged to
increase fiscal support. - Dow jumps more than 250 points, S&P 500 closes higher to post fresh record
Stocks rose Thursday, with the S&P 500 hitting a new record, following the release of upbeat U.S. economic
data. The broad market index climbed 0.40% to 5,745.37. The index posted a new all-time high during the
session and a record close, lifted by gains in Micron Technology. The Nasdaq Composite added 0.60%, closing
at 18,190.29. The Dow Jones Industrial Average advanced 260.36 points, or 0.62%, to end at 42,175.11.
Micron closed 14.7% higher after issuing strong guidance for the current quarter. Results for Micron’s fiscal
fourth quarter also topped analysts’ estimates. The VanEck Semiconductor ETF (SMH) added 2.9%. - U.S. crude oil falls nearly 3%, closes below $68 on report Saudi committed to production increase
U.S. crude oil prices fell nearly 3% on Thursday on a report that Saudi Arabia is committed to pressing ahead
with production increases later this year. Saudi is prepared to ditch its unofficial oil price target of $100 per
barrel, people familiar with the kingdom’s thinking told The Financial Times. Saudi officials are ready to
increase oil production in December even if the move results in a prolonged period of low oil prices, the
people said. - Silver hits 12-year high, chasing gold’s record-breaking rally
Silver rose to its highest level in nearly 12 years on Thursday, riding the coattails of gold’s rally to record
peaks on interest rate cuts by major central banks. Spot silver was 0.7% up at $32.06 per ounce, having hit
$32.71 earlier in the day, its highest since December 2012. Silver is going to continue to rally over the coming
quarters because of the consecutive rate cuts and as China’s stimulus could continue for some time, said
Amelia Xiao Fu, head of commodity markets at BOCI, adding that she sees the price moving towards $37
level. - GDP: US economy grows at 3% annualized pace in second quarter
The US economy grew at a 3% annualized pace in the second quarter, a faster rate than Wall Street had
expected. The Bureau of Economic Analysis’s third estimate of second quarter US gross domestic product
(GDP) was unchanged from the second estimate which had shown 3% annualized growth. Economists had
estimated the reading to show annualized growth of 2.9%. The third estimate for second quarter GDP
confirms that economic growth was higher than the 1.4% annualized growth seen in the first quarter. - Fed’s Cook Says She ‘Wholeheartedly’ Backed Half-Point Rate Cut
(Bloomberg) — Federal Reserve Governor Lisa Cook said she wholeheartedly supported the central bank’s
move last week to cut interest rates by a half percentage point, citing a slowing labor market and easing
inflation. That decision reflected growing confidence that, with an appropriate recalibration of our policy
stance, the solid labor market can be maintained in a context of moderate economic growth and inflation
continuing to move sustainably down our target, Cook said Thursday in remarks at Ohio State University. - China Bonds Flash Japanification Warning Despite Stimulus Plan
(Bloomberg) — Promoters of the theory that China faces a Japanification of its economy look set to enjoy a
symbolic milestone in the bond market. The yield on China’s 30-year government bonds is on track to fall
below its Japanese equivalent for the first time in about two decades. - China Cuts Key Rate, Frees Up Cash for Banks to Spur Growth
(Bloomberg) — China cut the amount of cash banks must keep in reserve Friday, in a bid to free up money for
financial institutions and bolster their efforts to boost the nation’s slowing economy. The People’s Bank of
China’s 0.5 percentage point reduction to the reserve requirement ratio was announced earlier this week by
central bank chief Pan Gongsheng. - RBA’s Hawkish Rate Path Lands Bullock in Hot Seat as World Eases
(Bloomberg) — A year into her term as Australia’s central bank governor, Michele Bullock is facing headwinds
on multiple fronts. They’re only likely to intensify. Bullock and her colleagues on the policy-setting board have
split from global peers by signaling Australian rates will stay at a 12-year-high of 4.35% for the time being. - Nikkei Poised to Recover From Rout Triggered by BOJ’s July Hike
(Bloomberg) — Japan’s Nikkei 225 Stock Average headed for a full recovery from a rout set off by the Bank of
Japan’s decision to raise interest rates at the end of July. The blue-chip gauge climbed to as high as 39,260.20
in morning trading, surpassing its close on July 31, the day the central bank hiked its policy rate to around
0.25%. - JAPAN REACT: Tokyo CPI Cooler Now, Will Heat Up in October
(Bloomberg Economics) — OUR TAKE: The slowdown in Tokyo inflation in September is probably just a lull
after the run-up driven by stronger pay growth. The Bank of Japan’s focus is on the October report. That will
capture price adjustments at the start of the fiscal second half. We expect it to show inflation heating up
again, lifted by stronger services prices. The BOJ appears to be slow-walking its next rate hike. - Harris Pushes Back on Trump Claims That She Will Confiscate Guns
(Bloomberg) — Vice President Kamala Harris joined President Joe Biden on Thursday to roll out measures
aimed at exploring ways to crack down on illegal firearm technologies, using the event to push back on
Republican messaging that she will confiscate guns from legal owners if elected. - Big Take: Harris Holds Razor-Thin Swing-State Lead in Tight Race
(Bloomberg) — Vice President Kamala Harris has all but neutralized Donald Trump’s advantage on economic
issues, fueling an upbeat showing for the Democrat in battleground states where she and the former
president are locked in a tight race about 40 days until the election. - Israel Rejects Cease-Fire Talks and Keeps Up Attacks in Lebanon
(Bloomberg) — Israeli Prime Minister Benjamin Netanyahu vowed the military would maintain its
bombardment of Hezbollah targets in Lebanon indefinitely, undermining efforts by the US and allies to secure
a cease-fire that would ease the risk of a regional war. Air strikes will continue until all Israel’s objectives
have been achieved, the prime minister said Thursday. - Boeing 737 Rudders May Jam on Some Planes, NTSB Warns
(Bloomberg) — The US National Transportation Safety Board warned that a faulty component in some Boeing
Co. 737 aircraft could cause the plane’s rudder control system to jam. About 350 parts are affected by the
issue and were supplied by Collins Aerospace, a unit of RTX Corp., for some 737 Max and 737 NG aircraft,
according to the NTSB. - Citi, Apollo Join Forces in $25 Billion Private Credit Push
(Bloomberg) — Citigroup Inc. and Apollo Global Management Inc. are teaming up in the fast-growing private
credit market, agreeing to work together on $25 billion worth of deals over the next five years. The two Wall
Street heavyweights have struck an exclusive partnership to arrange financings for corporate and private
equity clients, according to a statement. - H&M shares dropped 4.6% after the Swedish clothing retailer said it’s unlikely to hit a key profit target
this year
Chief Executive Officer Daniel Erver said that a pick-up in sales since the cold weather in June won’t be
enough to help it achieve a 10% operating profit margin goal. He also pointed to the continued high cost of
living for consumers. Operating profit for the third quarter came in at 3.51 billion kronor ($350 million),
below analyst estimates, even though H&M said it had maintained good cost control during the period. Net
sales in the quarter were down a touch at 59.01 billion kronor and also slightly below analysts’ expectations.
But sales in September are expected to increase by 11% in local currencies on a year earlier, H&M said.
H&M’s surging shares in the run-up to today’s results reflected optimism about strong sales, as European
temperatures clearly turned cold for the autumn-winter season, according to James Grzinic, a retail analyst at
Jefferies. However, he added: What is rather more critical today is a 24% miss in third quarter earnings
before interest and tax. - Accenture shares rose 5.6% after the IT services company reported its fourth-quarter results and gave a
forecast that analysts said came as a relief
FOURTH QUARTER RESULTS: Adjusted EPS $2.79 vs. $2.71 y/y, estimate $2.79. Revenue $16.41 billion, +2.6%
y/y, estimate $16.39 billion. Bookings $20.1 billion, +21% y/y, estimate $18.61 billion. Gross margin 32.5% vs.
32.4% y/y, estimate 32.5%. Free cash flow $3.18 billion, -1.5% y/y. Operating cash flow $3.39 billion, -0.6%
y/y, estimate $3.7 billion. Operating margin 14.3% vs. 12% y/y. FIRST QUARTER FORECAST: Sees revenue
$16.85 billion to $17.45 billion, estimate $16.96 billion. Sees revenue +2% to +6%. 2025 YEAR FORECAST:
Sees revenue +3% to +6%. Sees EPS $12.55 to $12.91. Sees operating margin 15.6% to 15.8%. Sees operating
cash flow $9.4 billion to $10.1 billion, estimate $10.77 billion. Sees free cash flow $8.8 billion to $9.5 billion,
estimate $9.84 billion. Bloomberg Intelligence: The outlook is confirming that corporate IT spending remains
under pressure but we see the target as reasonable and anticipate more clarity in IT budgets in 1H25, along
with the possibility of a positive revision of the growth outlook. - Super Micro Computer tumbled 12.2% on a report that the US Justice Department is looking into an exemployee’s claims that the server maker violated accounting rules just a few years after settling a bookkeeping case with a top financial regulator
A prosecutor at the US attorney’s office in San Francisco recently reached out to people who may have
relevant information about the allegations, according to a person familiar with the matter. The inquiry was
reported Thursday by the Wall Street Journal, which cited a case against Super Micro by former employee,
Bob Luong. Scrutiny has intensified on Super Micro since Luong alleged earlier this year in federal court that
the company had sought to overstate its revenue. Short-seller Hindenburg Research subsequently referenced
Luong’s claims in a research report about Super Micro, claiming glaring accounting red flags, evidence of
undisclosed related party transactions, sanctions and export control failures, and customer issues. Earlier this
month, Charles Liang, Super Micro’s chief executive officer, said in a letter to customers that Hindenburg’s
report contained false or inaccurate statements about our company including misleading presentations of
information that we have previously shared publicly. - Southwest Airlines Co.’s shares rose 5.4% after the carrier unveiled a stock buyback plan and detailed
major policy changes, part of a plan to revitalize its operations and fend off an activist investor
The airline will begin selling assigned seats late next year and introduce a premium fare option offering extra
leg room, according to a statement Thursday. The changes break from tenets that helped set Southwest
apart for decades, after the carrier was slow to embrace the industry’s push to capture growing demand for
premium flying options. Other Southwest hallmarks will endure, however. The carrier said it has no plans to
introduce fees on checked luggage, sticking with the “bags fly free” policy that executives believe keeps
customers loyal. The disclosures were part of a wide-ranging investor update as Southwest also set a new
$2.5 billion share repurchase program, raised its third-quarter sales forecast and said it added former airline
executive Robert Fornaro to its board. The presentation offered new details about Southwest’s plan to turn
around lagging financial results and update its long-standing, one-size-fits-all business model to appeal to
today’s consumers. The airline aims to convince shareholders that its efforts are working and there’s no need
for activist Elliott Investment Management’s aggressive plan to shake up the company. The new initiatives,
along with additional steps underway to increase efficiency and lower costs by $500 million, should
contribute to an extra $4 billion in earnings before interest and taxes by 2027, the carrier said.
