Asian Stocks Echo US Gains as Traders Await US CPI: Markets Wrap
(Bloomberg) — Asian stocks echoed a rebound on Wall Street as traders awaited US inflation data due this week for clues on the size of the Federal Reserve’s coming interest-rate cut. Shares in Tokyo and Sydney registered modest gains following a positive session in US equities that was fueled by renewed dip-buying. Stocks in Seoul were little changed.
Dow closes nearly 500 points higher in rebound from Wall Street’s worst week of 2024
U.S. stocks jumped on Monday after investors bought the dip following Wall Street’s worst week of the year, betting that a likely Federal Reserve rate cut later this month would bolster a slowing economy. Technology shares, among the hardest-hit stocks last week, were Monday’s top performers. The Dow Jones Industrial Average surged 484.18 points, or 1.2%, to close at 40,829.59. The rebound comes after the 30-stock index lost more than 1,200 points last week. The S&P 500 gained 1.16%, ending at 5,471.05, after posting its worst week since March 2023. The benchmark also broke a four-day losing streak. The Nasdaq Composite jumped 1.16% to end at 16,884.60, following its worst week in more than two years. Nvidia’s 3.5% gain helped lift the tech-heavy index. The artificial intelligence darling lost 14% last week. Outside of tech, retailers, banks and industrial shares also mounted a comeback as investors believe a rate cut would give a boost to the flagging consumer. JPMorgan Chase, Costco, Amazon and Boeing were among the winners on Monday.
Oil steady as supply disruptions from Storm Francine offset weak demand
Oil was steady in early trade on Tuesday as investors weighed supply disruptions from Tropical Storm Francine and the potential for further output cuts against persistently weak Chinese demand. Brent crude futures rose 16 cents, or 0.22%, to $72.00 a barrel by 0004 GMT. U.S. West Texas Intermediate crude futures rose 12 cents, or 0.17%, to $68.83 a barrel. Both benchmarks gained around 1% at Monday’s settlement. The U.S. Coast Guard ordered the closure of all operations at Brownsville and other small Texas ports on Monday evening, as Tropical Storm Francine barreled across the Gulf.
Gold prices steady with spotlight on U.S. inflation data
Gold prices held their ground on Monday, as investors awaited the U.S. inflation report for further clues on the potential size of the Federal Reserve’s interest-rate cut. Spot gold was little changed at $2,499.79 per ounce. U.S. gold futures settled 0.3% higher at $2,532.70. Bullion will probably be fairly consolidated, perhaps a little bit choppy in the established range in gold, said Peter A. Grant, vice president and senior metals strategist at Zaner Metals, who expects gold to hit all-time highs. Bullion hit a record high of $2,531.60 on Aug. 20.
China’s Deflationary Spiral Is Now Entering Dangerous New Stage
(Bloomberg) — Deflation stalking China since last year is now showing signs of spiraling, threatening to worsen the outlook for the world’s second-largest economy and raising calls for immediate policy action. Data released Monday confirmed that apart from food costs, consumer price growth barely registered in large swathes of the economy.
China’s exports grow by 8.7% in August, beating expectations
China’s exports rose more-than-expected in August, while imports missed expectations. Exports grew by 8.7% in U.S. dollar terms in August from a year ago, while imports rose by just 0.5%. The volume of China’s rare earths exports fell by 1% in August from a year ago, while imports declined by 12%.
Malaysia Central Banker Sees Rate Hold in 2024 With Growth at 5%
(Bloomberg) — Malaysia’s resilient economy and contained price pressures should allow it to keep interest rates unchanged for the rest of the year, even as global central banks pivot toward easing, according to Bank Negara Malaysia’s deputy governor. Malaysia’s economy is on track to grow around 5% in 2024 while inflation won’t exceed 3%.
Australia to Scrap AT1 Bank Bonds After Credit Suisse Wipeout
(Bloomberg) — Australia’s banking regulator has proposed lenders phase out the use of AT1 bonds, the kind of securities that were wiped out after Credit Suisse Group AG’s collapse, to strengthen their capital holdings in the event of a crisis. The proposed changes seek to support financial system stability at times of crisis with simpler and more certain resolution.
Biggest US Bank Capital Hike Chopped in Half in Latest Plan
(Bloomberg) — The biggest US banks would face a 9% increase in capital requirements, a dramatic retreat from the original plan, after regulators agreed to sweeping changes to a proposed package of rules, according to people familiar with the matter.
House Passes Biosecure Bill, Targeting Key China Biotech Firms
(Bloomberg) — China hawks in the US House overcame a last-ditch lobbying effort and passed legislation Monday night that would blacklist Chinese biotech companies and their US subsidiaries. The bill, approved by a vote of 306 to 81, now goes to the Senate.
Boeing Union Leader Defends Pay Deal as Worker Backlash Builds
(Bloomberg) — Boeing Co. faces growing backlash from rank-and-file workers to a tentative agreement, including a 25% pay raise, it struck with its largest labor union during a marathon weekend bargaining session. In an exclusive interview, Jon Holden, president of IAM District 751, said he understood the angry response from members.
Consumers Shift Spending to Pay for Basic Staples, Citi CFO Says
(Bloomberg) — Credit losses are rising as US consumers shift spending to basic needs and away from purchases that aren’t vital, according to Citigroup Inc. Chief Financial Officer Mark Mason. The nature of spend is evolving, Mason said at a conference hosted by Barclays Plc Monday. It’s going from discretionary to a more staple-type spend.
Starboard Pushes to End News Corp.’s Dual-Class Structure
(Bloomberg) — Starboard Value LP is pushing News Corp. to eliminate its dual-class share structure and is prepared to take further action against the media company if it refuses to engage. In a letter to its fellow investors on Monday, Starboard co-founder Jeffrey Smith wrote that the activist has submitted a non-binding proposal to collapse the dual-share structure.
Summit Therapeutics, SMMT US, shares soared 56% after the biopharmaceutical company presented the latest data of its lung cancer drug, ivonescimab, which was developed in partnership with Akeso
The data showed statistically significant improvement in progression-free survival, PFS, compared to Merck’s Keytruda, according to a presentation at a conference during the weekend. Merck shares fell 2.1%. HC Wainwright buy on Summit: Analyst Mitchell Kapoor says ivonescimab is clearly better than Merck’s Keytruda in non-small-cell lung cancer, adding that there were slam dunks in each of four important disease subtypes.
Boeing Co. shares rallied on optimism that a labor deal with its largest union will help the troubled US aircraft manufacturer avoid a potentially crippling strike at its Seattle-area factories
The landmark offer hammered out over the weekend includes a 25% wage increase over four years and a commitment to build Boeing’s next plane in the Seattle area, the two sides said in separate statements. The accord with union negotiators promises to be a significant victory for new Boeing Chief Executive Officer Kelly Ortberg and his pledge to reset long-contentious labor relations. But it’s too soon to know if workers will go along or buck their leadership, with anti-management sentiment still running high on the factory floor. Boeing shares advanced 3.4%.
Palantir Technologies, Dell Technologies gained 14.1% and 3.8% respectively following news that the companies will join the S&P 500 as part of its latest quarterly weighting change
Palantir Technologies Inc., Dell Technologies Inc. and Erie Indemnity Co. will replace American Airlines Group Inc., Etsy Inc. and Bio-Rad Laboratories Inc., according to a press release from S&P Dow Jones Indices last Friday. The changes are set to go into effect prior to the open of trading on Sept. 23.
Oracle Corp. jumped 8.9% in extended trading after reporting quarterly profit and bookings that topped estimates, signaling that artificial intelligence demand continues to boost its cloud computing business
Earnings, excluding some items, were $1.39 a share, Oracle said. Revenue increased 7% to $13.3 billion in the period ended Aug. 31. Analysts, on average, estimated profit of $1.33 a share on sales of $13.3 billion. As cloud services became Oracle’s largest business, both our operating income and earnings per share growth accelerated, Chief Executive Officer Safra Catz said. The company, known for its database software, is focused on expanding the cloud infrastructure business of renting computer power and storage to compete with Amazon.com, Microsoft and Google. Oracle’s cloud has developed a reputation for success with generative artificial intelligence workloads, the company touted customers including Reka and Elon Musk’s xAI. Fiscal first-quarter cloud revenue increased 21% to $5.6 billion, meeting estimates. Of that, $2.2 billion came from renting computing and storage. Remaining performance obligation a measure of booked sales was $99 billion.
Apple Inc.
Apple Inc. introduced the latest version of its flagship device, the iPhone 16, betting it could entice consumers with modest hardware upgrades and AI technology that’s still on the horizon. Chief Executive Officer Tim Cook unveiled the smartphone alongside new watches and AirPods earbuds at an event on Monday that was infused with the promise of artificial intelligence.
Arm Holdings rose 7% after the Financial Times reported that Apple’s iPhone 16 will include a nextgeneration chip based on Arm’s newest design architecture
Apple will reveal the A18 chip at its event on Monday, with the company embracing SoftBank-owned Arm’s newest V9 chip design in its smartphones, according to the Financial Times article, which cited people familiar with the matter.