- China Stocks Eye Gains; S&P 500 Steady on Powell: Markets Wrap
(Bloomberg) — Shares in Australia and Japan fell Wednesday while Chinese futures pointed to gains ahead of key economic data after fresh highs of US equities. Hong Kong futures contracts rose earlier, following a Tuesday rally for mainland stocks and a gauge of US-listed Chinese shares. - Asia markets trade mixed after Powell’s inflation comments; China inflation weaker than expected
Traders in Asia assessed wholesale inflation numbers from Japan, with focus also on inflation data out of China.
China’s inflation numbers narrowly missed expectations, recording a 0.2% rise compared to expectations of a 0.4% climb from Reuters. Federal Reserve Chair Jerome Powell on Tuesday expressed concern that holding interest rates too high for too long could jeopardize economic growth. - Oil Nudges Higher as Inventory Draw Overshadows Fed’s Messaging
(Bloomberg) — Oil edged higher as signs of another inventory draw in the US eclipsed uncertainty on the timeline for Federal Reserve interest-rate cuts after testimony from Chair Jerome Powell. Brent crude rose toward $85 a barrel after falling by more than 3% over the last three sessions, with West Texas Intermediate below $82. - Houston Struggles with Beryl’s Blackouts and Searing Heat
(Bloomberg) — Houston is struggling through Hurricane Beryl’s chaotic aftermath, with blackouts, blocked roads, internet disruptions and spotty access to gas expected to linger well after the storm’s floodwaters recede. More than 1 million homes and businesses are likely to be without power until at least Wednesday night, according to the region’s main electric utility, CenterPoint Energy Inc. - Musk Beats $500 Million Severance Suit Over Mass Twitter Layoff
(Bloomberg) — X Corp. and owner Elon Musk defeated one of the lawsuits filed over the firing of thousands of employees after the billionaire’s takeover of the social media platform in October 2022. The suit alleged that X, formerly known as Twitter, and Musk owed at least $500 million in severance pay to about 6,000 laid-off employees under provisions of the federal. - Divided Democrats Blast Trump Agenda to Shift Biden Focus
(Bloomberg) — Even as congressional Democrats argued Tuesday over whether to stand behind Joe Biden’s candidacy, the White House and lawmakers grasped for a unified strategy: trying to change the subject from the president’s mental acuity to Donald Trump’s policy goals. - NATO Offers Ukraine More Air Défense in New Support Pledge
(Bloomberg) — NATO allies promised five long-range air-defense systems for Ukraine in a fresh show of support, even as leaders resisted offering the country a path toward membership and fresh assessments indicate the conflict with Russia is headed toward indefinite stalemate. - Powell Flags Rising Risks to Jobs While Avoiding Rate-Cut Timing
(Bloomberg) — Federal Reserve Chair Jerome Powell said officials are increasingly wary of potential risks to the labour market from high borrowing costs as they seek more evidence inflation is slowing down. Speaking to lawmakers Tuesday, Powell was careful not to offer a timeline for interest-rate cuts, which investors are now betting will begin in September. - China Bond Traders Draw Red Lines as PBOC Gears Up to Calm Rally
(Bloomberg) — Bond traders are getting ready for China to start pushing back on record-low yields, with the central bank now armed with “hundreds of billions” of yuan of securities at its disposal to sell. Traders are drawing two red lines at 2.25% and 2.45% for the 10-and 30-year yields respectively, as they expect the People’s Bank of China may start selling bonds. - Trump Returns to Trail in Miami as Biden Fights Off Revolt
(Bloomberg) — Donald Trump is resurfacing on the campaign trail after laying low for days while a firestorm enveloped his rival President Joe Biden, who is fending off calls from within his own party to step aside for a younger Democratic nominee. Just a few weeks ago, this was projected to be one of the worst periods of the campaign for Trump. - Cracks in Middle Class Spending Spur Bets on Faster Fed Cut
(Bloomberg) — Waning US consumption, combined with rising unemployment, is spurring bets on a faster Federal Reserve rate cut. Americans are feeling the weight of lingering inflation and high interest rates, as the unemployment rate surprised to the upside. Consumer companies including Nike Inc. and Walgreens Boots Alliance Inc. saw shares tumble to multi-year lows. - Bank of Korea Poised to Hold as Momentum Grows for Pivot: Guide
(Bloomberg) — The Bank of Korea is poised to leave interest rates unchanged Thursday, leaving central bank watchers on the lookout for any hints over when it will pivot on policy as inflation eases and political pressure mounts. All 22 economists surveyed by Bloomberg see the central bank maintaining the rate at 3.5% when the monetary policy committee meets this week. - Powell Says Regulators Are Near a Revamped Bank-Capital Plan
(Bloomberg) — Federal Reserve Chair Jerome Powell said US regulators are close to agreeing to change their plan to force big banks to hold significantly more capital a move that could mark a major win for Wall Street banks. - BofA Taps UBS’s Top Insurance Investment Banker George Matsuzaka
(Bloomberg) — Bank of America Corp. has hired UBS Group AG’s global head of insurance investment banking George Matsuzaka, according to people with knowledge of the matter. New York-based Matsuzaka is set to join the Charlotte-based lender in October as co-head of global insurance investment banking, said one of the people, who asked not to be identified as the appointment. - Jefferies-Backed Fund Accuses Ex-Portfolio Manager of Fraud
(Bloomberg) — A hedge fund that’s part of Jefferies Financial Group sued its former portfolio manager, claiming he orchestrated an investment of more than $100 million in a Ponzi-like scam. The fund, 352 Capital, filed a lawsuit last week against Jordan Chirico, saying he directed the purchase of a large quantity of bonds issued by a company that claimed to operate. - Goldman Buys Majority Stake in Taylor Swift Stage-Builder TAIT
(Bloomberg) — The private equity business of Goldman Sachs Alternatives is buying a majority stake in TAIT, the engineering firm that designed the stage for Taylor Swift’s Eras Tour. The alternative investment platform of Goldman Sachs Asset Management has struck a deal to acquire a majority stake from affiliates of Providence Equity Partners. - RTX Is Said to Near Deal to Sell Hoist Unit to Arcline
(Bloomberg) — RTX Corp. is in advanced talks to sell a unit of its Collins Aerospace division to private equity firm Arcline Investment Management, according to people familiar with the matter. Arcline-backed Signia Aerospace could announce an agreement to acquire the Collins Hoist and Winch business as soon as this week. - ZoomInfo quickly gains amid takeover speculation
Seeking Alpha Seeking Alpha JHVEPhoto ZoomInfo Technologies (ZI) quickly rose 1% amid takeover speculation for the software and data company. There are two private equity firms circling ZoomInfo, according to a Betaville alert on Tuesday, which cited people familiar. There may also be a strategic buyer interested. - Ferrari’s Enrico Cardile heads to Aston Martin as Adrian Newey rumors swirl
(SB Nation) Enrico Cardile is headed to Aston Martin. While Formula 1 may be off this week, coming after a tripleheader that not only took the grid from Barcelona to Austria and then Silverstone but also offered plenty of surprises. - BP shares dropped 4.30%, after it warned of lower refining margins and predicted a write-down on the value of a German plant of $1 billion to $2 billion.
The company also said on Tuesday that lower profits from making fuels such as diesel and higher levels of maintenance will adversely affect its second-quarter earnings. BP is expected to report its second-quarter financial results on 30 July 2024. - Sony Group shares were up by 5.00%, as it got a boost from Japanese semiconductor makers’ plans to inject about ¥5 trillion ($31 billion) into the sector by 2029.
The move aims to boost production of power devices and image sensors, as well as critical components for emerging technologies such as artificial intelligence (AI) and electric vehicles (EV). Sony and Mitsubishi Electric are leading this initiative, with their investments targeting power semiconductors, sensors, and logic chips, which are vital for AI and EV growth. - Albemarle shares fall as much as 8%, the most intraday since March 5, and hit their lowest since 2020 after UBS cut the target on the stock to $109 from $124 “to reflect our view of lower lithium prices.” Maintains neutral rating.
Expects Albemarle to post one of the weakest earnings per share growth rates in chemicals in 2024 as lithium prices cause earnings to “normalize from peak levels seen in 2022/2023”. Albemarle is the worst-performing stock in the S&P 500 on Tuesday Bloomberg Intelligence analyst Sean Gilmartin and Jason Miner wrote lithium prices declined in June on weak demand. - Mercedes-Benz Group AG shares fall as much as 3.1% after analysts at Bank of America downgrade the German automaker to underperform from neutral on earnings concerns. Anticipating lower China forecasts, Citi separately cut the price target.
BofA (underperform): Analysts expect average fleet age to increase versus peers, leading to weaker top-line growth in 2025/2026; Also have concerns on top-end sales, and expect earnings consensus for these years to decline by 10% to 15%; See declining share buybacks as additional burden Citi (neutral): Analyst Harald Hendrikse says that the company is strongly exposed to China risks including tariffs and a waning China demand; Writes that the very proactive buyback program could alleviate some of these concerns but does not see “a positive catalyst or narrative that would allow the shares to re-rate more sustainably. - Railroad operator CSX shares fall as much as 4% as the company said it will review the capitalization of certain prior period engineering materials and labor.
The results of the review are not expected to impact free cash flow in past or future periods, the company said. Excluding the results of this review, CSX still expects to improve both operating income and operating margin on a sequential basis in the second quarter, and management will provide more details on the earnings call on Aug 5. - BMW rises as the German carmaker gets upgraded to buy by HSBC, which says it doesn’t see a calamitous 2Q for the autos sector, though the downgrade cycle continues.
The Stoxx 600 autos sector is the worst performer of the day, down 1.3% at 9:20 a.m. in Frankfurt vs the broader market down 0.5%. BMW is the only gainer, up 0.1%; Mercedes falls as much as 3.1%. Says 2Q could see improvement for Mercedes, Porsche AG and VW. Says investors appear less confident than consensus with worries about warnings from autos in 2Q. - Senators seek special counsel probe of Supreme Court Justice Clarence Thomas
Two Democratic Senate committee leaders are seeking a special counsel investigation into whether Supreme Court Justice Clarence Thomas broke federal tax and ethics laws. Senate Finance Committee Chair Ron Wyden, D-Ore., and Sen. Sheldon Whitehouse, D-R.I., who leads a subcommittee on federal courts, asked Attorney General Merrick Garland to make the appointment. - Stock futures are little changed after S&P 500 notches another record close
Stock futures were little changed on Wednesday afternoon after the S&P 500 notched a fresh record close. Futures connected to the Dow Jones Industrial Average dipped 9 points or 0.02%. S&P 500 futures and Nasdaq-100 futures climed 0.05% and 0.15% respectively. - Blowout’ in French borrowing costs still to come amid economic deadlock, veteran investor says
French borrowing costs will spike over those of Germany “when it comes home that actually political paralysis in France is economic paralysis in France,” Quantum Strategy President David Roche told CNBC on Tuesday.
However, former European Central Bank chief Jean-Claude Trichet said he believes that, despite current uncertainty, a “coalition of ideas” will form to break any deadlock and present a credible fiscal plan. - Don’t get tired’: Samsung Electronics workers extend strike indefinitely, say chip production disrupted
Samsung labor union said it would extend the strike ‘indefinitely’ from Wednesday after Samsung management did not show intention to hold discussions after the first strike. On Monday, members of the National Samsung Electronics Union began a three-day general strike over pay and benefits. - Gold rangebound with spotlight on U.S. inflation reading
Gold traded in a narrow price range on Wednesday as investors looked forward to a key U.S. inflation reading that could shed more light on the Federal Reserve’s interest rates trajectory. Spot gold rose 0.2% to $2,367.79 per ounce by 0229 GMT. U.S. gold futures climbed 0.3% to $2,374.10.
31.Ossenbeck upgraded CH Robinson Worldwide to neutral from underweight, saying there is upside to 2Q estimates as productivity gains and better revenue management offset the impact of a modest squeeze in spot/contract spreads during May and June
Trucking companies Werner and Heartland fell as much as 4.1% and 8.3% respectively after they were downgraded by both JPMorgan and UBS. JPMorgan said the combination of tepid US manufacturing and rising capacity in the market from smaller truckers merits a more conservative view for the companies, and UBS cited a slower recovery in trucking rates. The Russell 3000 trucking index fell by as much as 2%, while the S&P 500 Index rose as much as 0.3%.
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