- Hong Kong stocks fall as stimulus rally fizzles; Japan’s Nikkei leads gains in Asia
Hong Kong stocks plunged on Thursday as the China stimulus rally appeared to ease. The Hang Seng index
fell 3%, coming off a strong session on Wednesday when the index closed over 6% higher after hitting a 22-
month high. Hang Seng Mainland Properties Index briefly sank more than 10%, dragged down by Longfor
Group Holdings losing 12.8% and New World Development falling 10%. Hang Seng Tech Index fell over 6%.
Markets in mainland China remain closed until Oct. 8. Chinese stocks had been on a tear after authorities
announced a slew of support measures last week. - Dow ekes out narrow gain Wednesday as Middle East tensions weigh on markets
The major averages ended Wednesday just above the flatline as rising tensions in the Middle East weighed on
markets. The S&P 500 added 0.01% to 5,709.54, while the Nasdaq Composite rose 0.08% to 17,925.12.
The Dow Jones Industrial Average added 39.55 points, or 0.09%, to finish at 42,196.52. Nike slid 6.8% after
the sneaker giant pulled full-year guidance ahead of its CEO change. Tesla dropped 3.5% after the company
reported delivery numbers, though the technology sector was buoyed by a 1.6% rise in Nvidia. That action
follows a losing session after Iran’s firing of ballistic missiles on Israel dented risk appetite and investor
enthusiasm for the new trading month and quarter. Investors are readying for more uncertainty as Israel
begins a ground operation into Lebanon and tensions escalated with Iran-backed militant group Hezbollah. - Oil rises as Middle East conflict deepens, gains capped by global supply outlook
Oil prices ticked higher in early trade on Thursday as investors weighed the escalating conflict in the Middle
East and the potential for disruption to crude flows, against an amply-supplied global market. Brent
crude futures increased 64 cents, or 0.87%, to $74.54 a barrel as of 0006 GMT. U.S. West Texas Intermediate
crude futures gained 72 cents, or 1.03%, to $70.82 a barrel. - Gold rangebound as investors brace for key U.S. economic data
Gold prices were trading in a tight range on Thursday as traders remained on the sidelines ahead of a key U.S.
economic data that may provide clues about the size of the Federal Reserve’s interest rate cuts expected
later this year. Spot gold was flat at $2,655.03 per ounce by 0333 GMT. Prices hit a record high of $2,685.42
on Sept. 26. U.S. gold futures gained 0.2% to $2,675.40. Gold is consolidating at this point of time but expect
prices will retest the all-time high of $2,685 as charts show persistent strong upward trends, said Brian Lan at
Singapore-based dealer GoldSilver Central. - Japan still expected to stick to hiking cycle despite PM Ishiba’s dovish turn
Japanese currency experts are not budging from their Bank of Japan rate policy expectations even after
dovish comments from Japanese Prime Minister Shigeru Ishiba. I do not believe that we are in an
environment that would require us to raise interest rates further, Prime Minister Shigeru Ishiba said on
Wednesday after meeting with Bank of Japan Governor Kazuo Ueda. - Private payrolls show better-than-expected growth of 143,000 in September, ADP says
Private companies added 143,000 jobs in September, an acceleration from 103,000 in August and better than
the 128,000 consensus forecast, ADP reported Wednesday. Job gains were fairly widespread, with leisure and
hospitality leading at 34,000, followed by construction (26,000) and education and health services (24,000). - The East and Gulf coast ports strike could be a no-win situation for the Biden administration
President Joe Biden has said he will not intervene to force striking ILA union workers back on the job at East
and Gulf coast ports, a political calculation that balances the power of unions ahead of a tight election with
concerns about the economy, the No. 1 issue for many voters. Biden and top administration officials
including Transportation Secretary Pete Buttigieg and acting Secretary of Labor Julie Su have focused more
attention on the ocean carriers and price gouging since the strike began. If the union prevails in its battle for
a large wage increase, there is the risk of a resumption of wage inflation that could upset the Fed’s so-far
successful efforts to tame inflation, though recent Fed concern has focused more on a potential labor
slowdown than boom conditions. - Israel retaliation may target Iran oil infrastructure, boosting prices further, Wall Street analysts say
The oil market faces a rising risk of supply disruptions as war spreads in the Middle East, geopolitical and
crude market analysts say. Israel could hit Iran’s oil facilities in response for the Islamic Republic’s ballistic
missile attack. Prices could rise as a result, though OPEC has spare capacity that can cushion the market so
long as the Strait of Hormuz is not disrupted. - China says it filed an appeal to WTO over Canada’s tariffs on EVs and metals
China on Wednesday said it filed an appeal with the World Trade Organization, asking the organization to
rule on the recent tariffs that Canada imposed on Chinese electric vehicles and metal products. In August,
Canada announced it would impose 100% import tariffs on China-made EVs. These measures will disrupt and
distort the global industrial chain and supply chain, China’s Ministry of Commerce said. - OpenAI closes funding at $157 billion valuation, as Microsoft, Nvidia, SoftBank join round
OpenAI closed its long-awaited funding round, announcing that it raised $6.6 billion at a $157 billion post-
money valuation. Led by Thrive Capital, the round also had participation from Microsoft and Nvidia, CNBC
confirmed. Earlier this year, OpenAI was valued at a reported $80 billion, up from $29 billion in 2023. - Tesla Inc. posted its first increase in quarterly vehicle sales this year, though the automaker let down
investors expecting more of a bump from China boosting electric car subsidies
The company handed over 462,890 vehicles to customers in the last three months, up 6.4% from a year ago. Deliveries came up shy of the roughly 463,900 units expected among analysts. We will see some pressure on shares this morning as investors walk away from delivery numbers expecting more, Daniel Ives, a Wedbush analyst wrote. Tesla shares fell 3.5%.
Tesla got a lift during the quarter from China’s government doubling an incentive for consumers to trade in older cars for electric models, stoking demand in the world’s largest EV market. This fueled optimism about improving sales and coincided with rising expectations for an Oct. 10 event near Los Angeles, where Musk will unveil self-driving vehicle prototypes.
This will be one for the history books, the CEO wrote last week on X, the social media service he owns.
Whereas vehicle sales have ticked up both from a year ago and sequentially, Tesla’s energy business took a step back from a record second quarter. The company deployed 6.9 gigawatt hours of storage products in the last three months, down more than a quarter from the period that ended in June. It’s still managed to deploy more energy storage products already this year than in all of 2023. - Nike moved to reset Wall Street’s expectations ahead of new Chief Executive Officer Elliott Hill’s
arrival. The sportswear company withdrew its full-year sales guidance on Tuesday, citing the leadership
transition later this month. Nike is also postponing its investor day, which had been scheduled for
November, giving Hill more time to develop his turnaround strategy. Shares fell 6.8%
Withdrawing the forecast provides Elliott with the flexibility to reconnect with our employees and teams,
evaluate the current strategies and business trends and develop our plans to best position the business, Chief
Financial Officer Matt Friend said. Sales in the fiscal first quarter fell 10% to $11.59 billion, just short of the
average analyst estimate. Declines were especially sharp in North America as well as Europe, Africa and the
Middle East, while problems also persisted at the Converse brand. Nike expects revenue to fall 8% to 10% in
the second quarter before trends improve later this year. Jefferies analysts warned share losses were likely to
continue even after Hill joins. It will take time to address the crosscurrents of share loss, a challenging
consumer backdrop, and shifting fashion trends, all giving us pause to owning shares, the analysts said in a
note. Pressures are easing in some areas: Sales in Greater China outpaced analyst expectations, and the 4%
drop there was the smallest among the company’s regions. Nike said new products are selling well in China,
including the Pegasus 41 running shoe and classic franchises like Jordan. - Humana shares fell 11.8% after the health insurer disclosed sharp declines in quality ratings for its
Medicare plans for 2025 and said the drop will impact quality bonus payments in 2026. The news spurred
at least two analysts’ downgrades
Humana said the proportion of its membership enrolled in 4 star plans and above in 2025 is down to 25%
from 94% in the prior year, based on preliminary Medicare Advantage Star Ratings data provided by the
Centers for Medicare and Medicaid Services. A significant driver of these results was contract H5216
decreasing to a 3.5-star rating from a 4.5-star rating in 2024. H5216 contains about 45% of Humana’s MA
membership. Stephens analyst Scott Fidel called the news a worst-case scenario for Humana and estimated
that $3 billion in revenue could be at risk. Leerink analysts led by Whit Mayo estimated that lower ratings
may cost the company $1 billion in 2026 and will delay Humana’s plans to return to its target margins of at
least 3% in its Medicare Advantage business by 2027. - Conagra Brands shares fell 8.1% after the maker of Slim Jim and Healthy Choice meals said reduced
prices on certain frozen items and butters hurt its most recent earnings, and supply chain problems raised
questions about profit going forward
With food prices up around 25% since 2019, consumers have been cutting back on purchases at the
supermarket. The company has used discounts and promotions to lure shoppers, especially in the frozen
category, Chief Executive Officer Sean Connolly said. That has squeezed margins, along with higher costs for
beef and sweeteners. The company has seen deflation in edible fats and oils, driving permanent price cuts for
its oil-based spreads, which include the Smart Balance, Earth Balance and Blue Bonnet brands. Conagra also
said that a piece of equipment needed to be replaced at a Hebrew National factory in the middle of grilling
season, resulting in a pause in production. Hebrew National makes hot dogs and deli meats. While back up
and running, the disruption hurt results by $27 million in the quarter. - Illumina shares rose 7.8% after the DNA-sequencing company scheduled an innovation event for next
week
RBC analyst Conor McNamara writes that he’s is surprised to hear about the event that’s slated for Oct. 9
and said details remain scarce. He suspects the company will be discussing a new product offering to the low-throughput-screening market We contacted the company, and they had no comment on what exactly would be unveiled, he said.
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