- Asia-Pacific markets mixed after Powell signals smaller rate cuts; China markets closed for holiday
South Korea, Hong Kong, and mainland Chinese markets are closed for a public holiday Tuesday.
Business optimism among large Japanese manufacturers was unchanged, while sentiment among large nonmanufacturers in Japan improved, inching up to +34 from +33 in the third quarter. - S&P 500 posts record close on Monday to cap winning month and quarter
The S&P 500 rose to a record close on Monday, concluding a winning month and quarter. The Dow Jones
Industrial Average gained 17.15 points, or 0.04%, to 42,330.15. The S&P 500 added 0.42% and closed at
5,762.48. Both indexes closed at records. The Nasdaq Composite advanced 0.38%, ending at 18,189.17.
Stocks rallied into the close, erasing losses seen after commentary from Federal Reserve Chair Jerome Powell.
He said Monday that more interest rate decreases could be forthcoming, but cautioned that the central bank
did not have a preset path. If the economy moves as expected, he said to expect two rate cuts of a quarter
percentage point each this year. - Oil steady as prospect of more supply offsets Middle East conflict worries
Oil prices were steady on Tuesday as the prospect of additional supply entering the market amid lackluster
global demand growth offset concerns that the escalating Middle East conflict could disrupt exports in the
key producing region. Brent crude futures for December delivery increased 13 cents, or 0.18%, to $71.83 a
barrel as of 0050 GMT. U.S. West Texas Intermediate crude futures for November delivery gained 11 cents, or
0.16%, to $68.28 a barrel. Oil markets have been under pressure from weaker-than-expected demand growth
this year, particularly in China, the world’s biggest crude importer. Those demand concerns were reinforced
on Monday after data showed the country’s manufacturing activity shrank for a fifth month in September.
On Monday, Brent futures ended September down 9%, its third month of declines and largest monthly drop
since November 2022. It slumped 17% in the third quarter for its biggest quarterly loss in a year. WTI fell 7%
last month and dropped 16% for the quarter. - Record run steers gold to best quarter in four years
Gold eased on Monday, taking a breather after a historic rally driven by U.S. monetary easing and heightened
Middle East tensions, which put it on course for its best quarter since 2020. Spot gold was down 1.2% at
$2,626.95 per ounce. U.S. gold futures fell 0.7% to $2,649.2. Gold has risen 13% so far this quarter, which
would be its best since early 2020, having hit an all-time high of $2,685.42 on Thursday, fueled by the U.S.
Federal Reserve’s half-percentage-point cut and flare-ups in the Middle East. - German inflation drops to 1.8% in September, below expectations
The harmonized German consumer price index eased to 1.8% in September, coming in lower than expected,
preliminary data from the country’s statistics office Destatis showed on Monday. The September harmonized
CPI figure had been forecast to come in at 1.9% according to a Reuters poll. In August, the harmonized CPI
had surprisingly eased to 2%. On a monthly basis, the preliminary harmonized CPI dipped by 0.1%. A Reuters
poll showed that the monthly reading was expected to be unchanged. The German harmonized CPI figure
was last under 2%, which is the European Central Bank’s target rate for inflation, in February 2021, LSEG data
indicated. Inflation readings are harmonized in the euro area and in the European Union to ensure
comparability. Data out earlier on Monday showed that inflation eased in several major German regions in
September, with the print in the country’s most populous state North-Rhine Westphalia softening to 1.5% in
September, from 1.7% in August. Within Europe, data published last week showed that the harmonized
inflation rate in France and Spain fell below the 2% target in September. - Powell indicates further rate cuts, but insists the Fed is not on any preset course
Federal Reserve Chair Jerome Powell said Monday that the recent half percentage point interest rate cut
shouldn’t be interpreted as a sign that future moves will be as aggressive. Instead, the central bank chief
asserted during a speech in Nashville, he and his colleagues will seek to balance bringing down inflation with
supporting the labor market and let the data guide future moves. Looking forward, if the economy evolves
broadly as expected, policy will move over time toward a more neutral stance. But we are not on any preset
course, he told the National Association for Business Economics in prepared remarks. The risks are two-sided,
and we will continue to make our decisions meeting by meeting. - Israel Says It Has Begun Targeted Ground Raids in Lebanon
Israel said it had begun targeted ground raids in southern Lebanon, escalating a campaign to root out
Hezbollah despite international appeals for restraint. The Israel Defense Forces said early Tuesday its forces
are striking targets located in villages close to the border that pose an immediate threat to Israeli
communities in northern Israel. - Iran’s response to Israel will be a choice between revenge and survival. Markets say it’s choosing
survival
Iran’s generals and its supreme leader, Ayatollah Ali Khamenei, have pledged revenge, but their actions and
language suggest, at least so far, a more measured response. An all-out war between Israel and Iran would be
devastating to the entire region, but would be particularly damaging to Iran, whose economy is already in
dire condition and whose oil facilities could be particularly vulnerable to attacks. In the last two weeks,
Israel’s decisive blows to Hezbollah have in essence gutted the crown jewel of Iran’s regional proxy network,
one regional analyst told CNBC. - Consumer companies vie for share of India’s booming stock market
More consumer-centric companies are looking to capitalize on India’s booming stock market and strong
economic growth, by going public. With the India set to emerge as the world’s third-largest consumer market
by 2027, Atul Singh, CEO and managing director of wealth management firm LGT Wealth India said the
nation’s growth story is now likely to be driven by private consumption. - AI chipmaker Cerebras files for IPO to take on Nvidia
Artificial intelligence chip startup Cerebras Systems on Monday filed its prospectus for an initial public
offering. It plans to trade under the ticker symbol CBRS on the Nasdaq. Cerebras had a net loss of $66.6
million in the first six months of 2024 on $136.4 million in sales, according to the filing. It had a net loss of
$77.8 million and $8.7 million in sales for the first six months of 2023. - Stellantis shares fall as much as 14% in Milan to their lowest since October 2022 after the carmaker
slashed its profit margin forecast for the year, citing US costs and a slowing and more competitive auto
market. Analysts at Oddo lower their rating on the stock to neutral, saying the magnitude of the warning
was a shock and it should have come earlier
In US premarket trading, GM slipped 3.2% and Ford fell 2.8%. UBS: Analysts led by David Lesne say this
warning, along with VW’s on Friday evening, is too big to call a de-risking event and move on; Estimate the
downgrade compared to sell-side consensus will be around 40% for the full year on AOI level; Say the
performance of the auto sector in the coming weeks and months will be capped by deteriorating
fundamentals into 2025, irrespective of the value argument. Stellantis sees FY adjusted operating income
(AOI) margin between 5.5% to 7.0%, down from prior double digit, according to statement, Bloomberg
Consensus estimate 9.77%. Roughly two-thirds of the reduced AOI margin is driven by corrective actions in
North America. Also cites lower than expected sales performance in 2H across most regions. Sees Industrial
FCF range from -€5 billion to -€10 billion, previously saw positive, reflecting substantially lower AOI outlook
as well as the impact of temporarily elevated working capital in 2H, estimate positive EU4.81 billion. - Abercrombie & Fitch shares fall as much as 7.6%, the most intraday since Aug. 28, paring its year-todate rally to about 55%
The apparel retailer’s still-impressive gain this year comes on the heels of a spectacular 285% surge in 2023.
Short interest is currently 8.1% of float compared with ~7.6% on Aug. 27, the day before Abercrombie
reported underwhelming quarterly results that sank shares 17%: data provided by S3 Partners. ANF has 5
buys, 5 holds, 0 sells; avg PT $186, implying about 36% upside from current level: data compiled by
Bloomberg. ANF is the worst performing stock in the S&P 1500 Apparel Retail Index (S15APRE), which is down
0.5%. Implied volatility on 3-month options rose to the highest since late August, while the skew, or premium
of puts over calls, also widened. - Baxter International shares are down as much as 4.1%, the most intraday in more than a month, after
the medtech company said late Sunday that its North Cove facility in Marion, North Carolina, was affected
by flooding following Hurricane Helene and is currently closed
A levee breach led to water permeating the site; bridge access damaged. The disruption is anticipated to
negatively impact the company’s financial results, BAX says. Plans to provide an update in its 3Q earnings
announcement. Wells Fargo, equal weight, notes that the affected site primarily makes intravenous (IV) and
peritoneal dialysis solutions and is the largest maker of these solutions in the US; We believe the other three
IV solutions manufacturers will be able to offset some of the lost BAX supply from North Cove, according to
analyst Larry Biegelsen. JPMorgan (neutral) writes: Depth of the impact will depend on how fast supply can
start flowing from the North Cove plant, but overall we’d expect a smaller and more acute impact vs. the
Puerto Rico disruption in 2017. - Universal Health Services falls 5% after the health-care facility operator said lawsuits involving the
Cumberland Hospital for Children and Adolescents and the Pavilion Behavioral Health System may have a
material adverse effect on the company
According to a filing, Cumberland Hospital for Children and Adolescents, an indirect subsidiary of Universal
Health Services, is a defendant in multi-plaintiff lawsuits relating to allegations of inappropriate sexual
contact during medical examinations by Dr. Daniel Davidow, an independent contractor and the former
medical director for Cumberland. The claims asserted by three of the plaintiffs in the Cumberland litigation
were consolidated for trial in September. A jury entered a verdict finding Dr. Davidow and Cumberland liable
and awarded these three plaintiffs combined compensatory damages of $60m, an additional combined
$180m in trebled damages and an additional combined $120m in punitive damages. Cumberland is
evaluating all legal options and intends to challenge this verdict. Based upon Virginia law, we expect that the
punitive damage amount should be reduced to a combined maximum of $1.05m as a matter of law, the
company said in the filing. There are about 40 additional plaintiffs making similar allegations with claims
pending in the Cumberland litigation. Also, the Pavilion Behavioral Health System, an indirect subsidiary of
Universal Health Services, was a defendant in a lawsuit filed in Champaign County, Illinois, relating to the
sexual assault of one minor patient by another minor patient in 2020. - Apple shares are up 1.7% on Monday, with the iPhone maker easily outperforming other names within
big tech. The Nasdaq 100 Index is up 0.1%
The move extends a recent gain for Apple, which is up 7.3% off a recent low despite some tepid early
demand signs for its AI-infused iPhone. Over the weekend, JPMorgan analyst Samik Chatterjee wrote that
lead times for the latest iPhone suggested that slower initial demand for Pro models was starting to correct.
Lead times are showing trends which, if continued, will explain the weaker lead times for the Pro models in
the initial weeks as only an aberration led by a combination of better supply mix as well as delay in pick up in
momentum from higher end consumers awaiting the release of Apple Intelligence. - Universal Health Services falls 5% after the health-care facility operator said lawsuits involving the
Cumberland Hospital for Children and Adolescents and the Pavilion Behavioral Health System may have a
material adverse effect on the company
According to a filing, Cumberland Hospital for Children and Adolescents, an indirect subsidiary of Universal
Health Services, is a defendant in multi-plaintiff lawsuits relating to allegations of inappropriate sexual
contact during medical examinations by Dr. Daniel Davidow, an independent contractor and the former
medical director for Cumberland. The claims asserted by three of the plaintiffs in the Cumberland litigation
were consolidated for trial in September. A jury entered a verdict finding Dr. Davidow and Cumberland liable
and awarded these three plaintiffs combined compensatory damages of $60m, an additional combined
$180m in trebled damages and an additional combined $120m in punitive damages. Cumberland is
evaluating all legal options and intends to challenge this verdict. Based upon Virginia law, we expect that the
punitive damage amount should be reduced to a combined maximum of $1.05m as a matter of law, the
company said in the filing. There are about 40 additional plaintiffs making similar allegations with claims
pending in the Cumberland litigation.
Menu