- Asian Equities Climb as US Record High Lifts Mood: Markets Wrap
Asian equities rose Thursday after US stocks set a fresh high ahead of inflation data that may help
shape Federal Reserve policy easing in the coming months. Stocks in China jumped after authorities
released details of a liquidity tool institutional investors can use to purchase shares, a measure initially
unveiled last month. On Wednesday, a benchmark of mainland equities had suffered its biggest loss in four
years. - Dow jumps more than 400 points to record close, S&P 500 hits all-time high
Stocks rose for a second session Wednesday, with the S&P 500 and Dow Jones Industrial Average closing at
records, as technology stocks powered higher and investors shook off geopolitical concerns.
The S&P 500 rallied 0.71% to end at 5,792.04 after notching an all-time high, while the Nasdaq
Composite added 0.6% to finish at 18,291.62. The 30-stock Dow surged 431.63 points, or 1.03%, to settle at
42,512.00 and at a record close. Technology stocks were notable leaders in the rally,
with Amazon and Apple gaining more than 1%. Super Micro Computer rallied 4%. Wednesday’s advance
helped correct a bumpy start to October, pushing the major averages into positive territory for the month. - Oil prices rise on Israel-Iran conflict fears and U.S. storm
Oil prices rose in early Asian trade on Thursday on concerns about potential supply disruptions in the Middle
East, with Israel planning to strike oil-producer Iran, and on spikes in fuel demand as a major storm barreled
into Florida. Brent crude futures rose 37 cents, or 0.5%, to $76.95 a barrel, while the U.S. West Texas
Intermediate futures was up 35 cents, also 0.5%, at $73.59 a barrel at 0034 GMT. The world’s
largest oil producer and consumer has been hit by a second major storm, Hurricane Milton, which made
landfall on Florida’s west coast, spawning tornadoes and threatening surges of seawater. The storm has
already driven up demand for gasoline in the state, with about a quarter of fuel stations selling out of
supplies, which has helped support crude prices. - Gold eases for sixth session as dollar marches upward
Gold retreated for the sixth straight day on Wednesday on an advancing dollar and diminished expectations
for a larger rate cut in November. Spot gold fell 0.5% to $2,607.7 per ounce. U.S. gold futures for December
delivery fell 0.3% to $2,626.90. - China Finance Minister Plans Briefing as Investors Seek Stimulus
China said it would hold a briefing on fiscal policy on Saturday as investors look for additional measures to
stimulate the world’s No. 2 economy. Finance Minister Lan Fo’an will introduce moves to strengthen fiscal
policy to shore up growth, and answer questions from reporters, the State Council Information Office said in
a statement on Wednesday. The briefing will start at 10 a.m. local time. - China’s Golden Week holiday signals persistent consumer caution
China’s Golden Week holiday affirmed a trend in more cautious spending, while consumers put greater
emphasis on experiences. Low tourism spending per head and subdued services prices highlighted still weak
domestic demand and continued consumption downgrading, Goldman Sachs analysts said. People become
more cautious with spending. Also they opt for more affordable options of travel and affordable locations,
Kenneth Chow, principal at Oliver Wyman, told CNBC on Wednesday. - China’s property stimulus raises optimism, but more steps are needed for a sectoral turnaround
Average daily sales in Beijing jumped 81%, in terms of floor area, compared to the same holiday period the
year before. Across the country, however, the average daily transaction area of new homes fell 27% year
over year during the holiday. China needs to put out more policies to address the excess inventories, in order
to shore up the sector, but we are not seeing a huge effort [from the government] to do that, said Kenneth
Ho, chief Asia credit strategist at Goldman Sachs. - Powell’s Half-Point Cut Is Hard to Repeat With FOMC in No Hurry
Federal Reserve Chair Jerome Powell is unlikely to win another big interest-rate cut from his policy
committee so long as the labor market holds up. Powell described the move as a recalibration aimed at
making sure the labor market remained strong at his press conference after officials reduced the benchmark
lending rate by a half percentage point to a range of 4.75% to 5%. - Hurricane Milton Makes Landfall Near Tampa as Category 3
Hurricane Milton slammed into Florida’s west coast near Tampa with tree-snapping winds, pushing a wall of
water onshore and putting lives at risk in the densely populated region. Milton came ashore near Siesta Key
with winds of 120 miles per hour, according to an advisory from the US National Hurricane Center, making it
a Category 3 storm on the five-step Saffir-Simpson scale. It was the second hurricane to hit Florida in two
weeks. - BlackRock Is Among Suitors Exploring Purchase of Credit Firm HPS
BlackRock Inc. is among firms exploring a purchase of HPS Investment Partners, according to people with
knowledge of the matter, in a deal that would push the world’s biggest asset manager into the top ranks of
the private-credit market. The two firms have held talks as HPS also pursues a potential initial public offering,
said the people, who requested anonymity to discuss confidential information. Such an IPO may value HPS at
$10 billion or more, Bloomberg News has reported. An acquisition would likely require a premium to that
valuation, some of the people said. - Berkshire’s ¥282 Billion Bond Fuels Japan Investment Hopes
Warren Buffett’s Berkshire Hathaway Inc. sold a ¥281.8 billion ($1.89 billion) multi-tranche bond on Thursday
in a deal that’s fueling speculation the legendary investor will increase his exposure to Japanese assets. The
firm priced a seven-part bond deal with tenors spanning three to 30 years in Berkshire’s biggest yendenominated deal since its debut sale in 2019. The sale means Berkshire is the largest foreign issuer of yen
bonds this year, raising a record ¥545.1 billion. All maturities except the three-year tranche offered higher
premiums relative to its corresponding yen-note offering in April. - Alphabet shares are down 1.1% on Wednesday after the US Justice Department told a federal judge it’s
considering recommending that Google be forced to sell off parts of its operations. The DoJ’s rationale is
that a breakup of the search giant will alleviate the harm caused by its monopolization of the online search
market
JPMorgan analyst Doug Anmuth (overweight, PT $208): There were no major surprises as DOJ’s initial
remedy framework is in expected lines; However, this still carries headline risk around separation/structural
changes & sharing of monetization engine. TD Cowen: Even if adopted & upheld on appeal, no actual changes
for Google likely before 2H 2027; Some remedies appear hard to enforce effectively. Bernstein (market
perform, PT $180): It may be another 4 years until we get a final, final verdict, and most remedies appear to
have more bark than bite for the world’s best search product; The case will be tied up in courts for a while,
and in any case, Google will appeal the verdict, while either Google or the DOJ are likely to appeal the
remedies as being too harsh or lenient respectively. - Kering shares rise as much as 1.3% after the company named Stefano Cantino as the new CEO of its
Gucci label. The ex-Louis Vuitton exec’s appointment is a positive, though he has a lot of work to do to turn
around the luxury brand, analysts at RBC Capital Markets said
RBC analyst Piral Dadhania (sector perform) says Cantino’s appointment is a positive for Gucci and Kering,
given Gucci needs some external experience with a more radical approach for addressing its challenges;
Analyst is not convinced that the new products from creative director Sabato De Sarno are gaining traction.
CIC Market Solutions analyst David Da Maia (neutral) says Cantino’s appointment is not a surprise, but it does
come sooner than expected; The appointment can be viewed as a potential starting point for new, more
promising chapter in Gucci’s history; Key question now is whether Cantino will want to link his destiny to that
of Sabato De Sarno, whose debut as Gucci creative director has so far not been very convincing. Kering’s
shares have fallen 40% YTD. - Fortinet shares rise 2.2% on Wednesday as TD Cowen raises its price target on the cyber-security
company to to $90 from $75, citing sustainable recovery
Analyst Shaul Eyal says as per TD Cowen’s checks, the company’s 3Q revenue and billings will be at the top
range of the guidance, with potential slight upside. There’s also ongoing firewall product recovery based on
growing AI requirements. TD Cowen moved its target to the high end of the range, implying a 16% increase
from last close. Fortinet has 16 buys, 28 holds and no sell ratings among analysts tracked by Bloomberg;
average PT $74.74. - Pfizer’s chief executive Albert Bourla plans to meet Starboard Value, Financial Times reports, citing
unidentified people familiar with the matter. Shares of the drugmaker are up as much as 4% in Wednesday
trading
Bourla and at least one other director will hold talks with Starboard next week. Pfizer’s lead independent
director, Shantanu Narayen, is expected to accompany Bourla. Starboard will be represented at the meeting
by CEO Jeff Smith and partner Patrick Sullivan. Starboard’s recommendations could not immediately be
determined and the firm declined to comment to the FT. Pfizer did not immediately respond to a request for
comment to the FT. - ING Groep drops as much as 3.7% and is the worst performer on the Stoxx 600 banks index on
Wednesday after Deutsche Bank downgrades to hold, removing its buy rating from the lender for the first
time in eight years
Analyst Benjamin Goy says in note that profit has probably hit a peak, and capital returns will soon do the
same. Expects more limited support from ING’s large but relatively short replicating portfolio going forward.
Falling revenue next year, alongside likely still elevated cost inflation, could see a meaningful efficiency
deterioration in 2025.
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