- Asian Stocks Echo US Rally Ahead of Inflation Data: Markets Wrap
(Bloomberg) — Asian equities advanced after a rally in the world’s largest tech stocks lifted global shares to new highs ahead of US inflation data due later Thursday. Equities in Japan and Australia rose, echoing the bullish pulse on Wall Street on Wednesday. The S&P 500 and Nasdaq 100 each gained more than 1%, and a gauge of global equities also rose. - Oil Extends Advance as Shrinking US Crude Stockpiles Buoys Mood
(Bloomberg) — Oil climbed for a second day as signs of growing demand and a risk-on tone across broader markets combined to aid sentiment. Global crude benchmark Brent advanced toward $86 a barrel after posting a 0.5% gain on Wednesday, with West Texas Intermediate near $83. Nationwide US stockpiles fell by 3.4 million barrels last week, with gauges of jet fuel. - Trump to Address Bitcoin Event in Show of Support for Crypto
(Bloomberg) — Donald Trump will speak at a Bitcoin conference later this month, according to the event’s organizers, an address that would highlight his growing embrace of the cryptocurrency industry. The presumptive Republican presidential nominee is due to deliver his speech on July 27 on the main stage of the Bitcoin 2024 event in Nashville, Tennessee. - Redbox Owner to Be Liquidated Following Alleged Mismanagement
(Bloomberg) — The bankrupt owner of Redbox Entertainment Inc. will be liquidated, a judge ruled Wednesday, after lawyers for the company and lenders accused its former chief executive officer of mismanaging the business and failing to pay workers or fund their health benefits. Judge Thomas Horan said during a Delaware court hearing that Redbox’s publicly traded owner, Chicken Soup for the Soul Entertainment Inc. - China Cracks Down on Short Sales, Quants to Boost Stocks
(Bloomberg) — China took some of its most extreme steps yet to restrict short selling and quantitative trading strategies, seeking to support the nation’s sliding stock market as a closely-watched economic policy meeting approaches. The China Securities Regulatory Commission approved an increase in margin requirements for short selling starting July 22. - Pressure on Biden Mounts as Senate Democrat Calls for New Ticket
(Bloomberg) — President Joe Biden faced mounting opposition within his own party Wednesday as a Senate Democrat joined a growing number of House lawmakers in calling on him to step aside. Vermont Democrat Peter Welch became the first sitting senator to directly endorse replacing the 81-year-old president whose disastrous debate performance. - Big Take: Bombs Tied to $400 Drones Rewrite the Economics of War
(Bloomberg Businessweek) — Thousands of Ukraine’s deadliest weapons were made on the top three floors of a residential high-rise in Kyiv. The space, which used to be an office for an IT company, contained workstations littered with quadcopters in various stages of assembly, accompanied by clusters of electronic components and circuit boards strewn about the desktops. - Powell Not Prepared Yet to Say He’s Confident About Inflation
(Bloomberg) — Federal Reserve Chair Jerome Powell said he believes inflation is receding, but isn’t yet confident that price gains are sustainably slowing to the central bank’s 2% goal. “I do have some confidence” that inflation is receding, the Fed chief told House lawmakers on his second day of testimony in Washington. - US Inflation Data to Bolster Case for Fed Rate Cut in September
(Bloomberg) — Forecasters expect a monthly report on US consumer prices to show the smallest back-to-back increases in underlying inflation since last summer, adding to the case for a Federal Reserve interest-rate cut in September. The figures, to be published Thursday by the Bureau of Labor Statistics, will probably show a key gauge of prices excluding food and energy. - Republicans Move to Block 401(k) Rule, Siding with Wall Street
(Bloomberg Law) — House Republicans advanced a measure to overturn the US Labor Department’s rule governing investment plan advisers that has been opposed by many on Wall Street. The Committee on Education and the Workforce voted 23-18 Wednesday in favour of the resolution brought under the Congressional Review Act. - Biden Aides to Meet Senators After Pelosi Remarks Deal Blow
(Bloomberg) — Former House Speaker Nancy Pelosi said Joe Biden should quickly consider whether to stay in the presidential race and top officials from his re-election campaign were set to meet anxious Senate Democrats, as unease over the incumbent’s age and ability to defeat Republican Donald Trump continued to reverberate across Capitol Hill. - How Xi Can Surprise World with Big-Bang Moves at China Plenum
(Bloomberg) — China has the firepower to end its housing crisis at a high-stakes policy meeting, including with a “big-bang solution” that involves pumping money like the Federal Reserve. But it’s unlikely to pull the trigger. That’s according to Bloomberg Economics, which said if the People’s Bank of China printed money on a scale similar to the Fed. - Wall Street Banks Look to Second Half for a Likely NII Bounce
(Bloomberg) — As the Federal Reserve sits on pause, so does banks’ biggest source of revenue. Net interest income the difference between what banks earn on their assets and what they pay on debts at the four largest lenders surged to a record last year on the back of higher interest rates. - Light Street, Whale Rock Soar in 2024 as Viking, Coatue Lag
(Bloomberg) — Tech-focused equity hedge funds Whale Rock Capital Management and Light Street Capital Management soared in the first half of the year, outpacing markets and some larger rivals. Glen Kacher’s Light Street climbed 54.6% in the first half, with a healthy portion of gains from its short book. - Google Parent Alphabet Is Said to Shelve Interest in HubSpot
(Bloomberg) — Google parent Alphabet Inc. has shelved efforts to acquire HubSpot Inc., according to people with knowledge of the matter, putting to bed the prospect of a takeover that would have ranked among the biggest of the year. Shares of HubSpot, a customer relationship management company, fell as much as 19% Wednesday in New York trading, the most since 2020. - Game Maker Shift Up Jumps in South Korea After $320 Million IPO
(Bloomberg) — Game developer Shift Up Corp. jumped as much as 49% in its first day of trade in South Korea after an initial public offering that raised 435 billion won ($320 million), the largest in the country for a gaming firm in almost three years. The shares traded as high as 89,500 won. - Tycoon Mike Jatania-Backed Consortium Nears Deal for Body Shop
(Bloomberg) — A consortium led by British tycoon Mike Jatania is nearing a deal to buy struggling UK cosmetics retailer The Body Shop out of administration, people with knowledge of the matter said. Aurea Holding, an investment firm that Jatania runs with former UBS Group AG banker Paul Raphael. - Market Chatter: Barry Diller Hints at Bid for Paramount Global
Paramount Global (PARA) may still get an offer from Barry Diller even as the company entered an agreement to merge with Skydance Media, Bloomberg reported Wednesday. The agreement between Skydance and Paramount, which was announced Sunday, includes a “45-day go-shop period” during which alternative acquisition. - Baidu (9888 HK) shares surged 10.14%, due to signs of growing popularity for its Apollo Go robotaxi in China.
The company is investing in generative AI and autonomous driving, to diversify its business as China’s economic growth slows and impacts advertisements. Investors believe that robotaxis will get another push, after Beijing announced this week that it will support them for ride hailing and car rental fleets. - Apple shares rose 1.88%, after the company reported that it is targeting approximately 10% growth in shipments for new iPhones.
It aims to ship at least 90 million iPhone 16 devices in the latter half of the year, compared to the 81 million iPhone 15s that Apple shipped in the second half of 2023. The company is confident that it can count on the addition of some Apple Intelligence features with the iPhone 16 to fuel demand for its sales. - Deckers Outdoor is the worst performer on the S&P 500 Index on Wednesday after M Science flagged a notable deceleration in growth for its Hoka and UGG brands in June. The stock is down as much as 9.3%, the most intraday since September 2021.
Its shares had gained 40% this year through Tuesday’s close, and it had been the top-performing stock on the S&P 500 Consumer Discretionary Index. Meanwhile, M Science said Adidas sell-through in the wholesale channel in the US and Europe is robust through 2Q; Adidas shares rise as much as 2.4%. Separately, BofA warned that following its fiscal first quarter, more difficult comparisons for Deckers’ UGG brand and competition in the specialty running category could “temper” the magnitude of earnings beats; Analyst Christopher Nardone expects the company’s 1Q report will be strong, but he anticipates it will be the last quarter UGG will benefit significantly from prior price increases and much lower discounting; Deckers is estimated to report 1Q results later this month; Rates neutral with PT $1,020. - Alcoa reported preliminary adjusted Ebitda for the second quarter that beat the average analyst estimate.
PRELIMINARY SECOND QUARTER RESULTS: Prelim adjusted Ebitda $310 million to $330 million, estimate $303.9 million (Bloomberg Consensus); Prelim sales $2.85 billion to $2.93 billion, estimate $2.8 billion. Revenue: For the second quarter 2024, revenue is expected to range between $2,850 million and $2,925 million, a sequential increase due to higher average realized third-party prices for alumina and aluminum, partially offset by lower alumina shipments. Adjusted EBITDA excluding special items: For the second quarter 2024, Adjusted EBITDA excluding special items is expected to be between $310 million and $330 million, a sequential increase driven by higher alumina and aluminum prices and lower production costs. - Intuit shares are down 2.5% on Wednesday, after the tax-preparation software company said it would cut about 10% of workforce and close its Boise and Edmonton sites as part of a reorganization plan.
The job cuts “may lead to sales challenges,” and “we believe consensus for 12% sales growth in fiscal 2025 looks challenging”. Evercore ISI (outperform, PT $725): The move “helps illustrate INTU’s willingness to make tough near-term choices to set the business up for long-term success”; “While laying off employees is always tough decision, we believe making these changes from a position of strength (vs. in a tougher macro) is the right move and we view the incremental hiring plans post [reduction in force] as a sign that Intuit remains bullish on its growth prospects. - Visa Inc. and Mastercard Inc. each dipped on Wednesday after BofA Global Research analyst Jason Kupferberg cut the recommendation on both payment networks’ stocks to neutral from buy, citing limited upside for their valuation multiple and earnings estimates.
“We are making a non-consensus call and downgrading V and MA to Neutral from Buy. While we maintain a favorable view on V/MA‘s premier business model and competitive moat, we see limited upside potential to the valuation multiple and estimates,” the analyst writes. V shares slide as much as 2.6%, the most intraday since October. - Spotify Technology shares are down 0.5% on Wednesday, after Redburn downgraded the audio-streaming company to sell from neutral.
“Music streaming is facing competitive and structural challenges that, we argue, will prevent broad-based price increases from becoming a new norm,” writes analyst Agnieszka Pustula. “While Spotify’s operating momentum has been impressive, consensus is simply forecasting too much growth”. - Lululemon shares drop as much as 2.2% on Wednesday after Jefferies analyst Randal Konik cuts his price target on the yoga-wear maker to a Street-low $220 from $240.
The stock is on pace to close lower for a sixth straight session; shares are at the lowest level since October 2022; Lululemon is down 44% so far this year. Lululemon faces competition from both Alo and Vuori, both of which are “generating healthy brand momentum,” Konik writes; US web visit market share for Alo and Vuori combined has grown to about 28% in June compared with around 18% in December 2022, he notes; In addition, the two are “actively placing” stores near Lululemon locations. - Costco Wholesale Corp. is boosting its basic membership fee for the first time since 2017, raising the charge for most memberships to $65 a year from $60.
The 8% price increase will take effect Sept. 1, Costco said in a statement Wednesday. The price of the retailer’s premium membership will rise to $130 from $120 now. Costco shares rose 2.7% at 4:23 p.m. in extended trading in New York. Costco is following Walmart Inc.-owned Sam’s Club in raising the price of membership as US consumers flock to warehouse stores, which offer wholesale quantities of goods to everyday shoppers. Sam’s Club boosted its annual fee to $50 for basic and $110 for premium in 2022, although it used its rewards program to return the extra cost to members during the first year. - European miners are among the worst-performing sectors in the Stoxx 600 benchmark on Wednesday, with the basic resources subgroup sliding for a fourth day. Iron ore declines on a wave of negative signals from China, while copper drops for a third day as investors weigh the demand outlook from the country.
The Stoxx 600 Basic Resources Index trades 0.3% lower as of 8:28 a.m. in London, the current losing streak is the longest since January. Rio Tinto -0.5% is the biggest drag in the sector by index points; Among other decliners are Glencore (-0.34%), BHP Group (-0.9%), KGHM (-1%), Boliden (-0.2%), Antofagasta (-0.2%). - Tesla shares jumped as much as 1.3% Wednesday, but then pared gains to briefly trade slightly lower, even as Goldman Sachs raised its target on the EV maker to $248 from $175 following better-than-expected 2Q deliveries.
The stock has risen 44%, adding more than $250 billion to its valuation over the past 10 sessions; it fluctuated between small losses and gains at around 10 am in New York on Wednesday. Analyst Mark Delaney attributes the stronger volumes to a combination of — inventory reduction, incentives from Tesla and “the Model 3 Long Range variant recently re-gaining IRA credit eligibility in the US”; “The reduction in inventory levels is a positive sign for future pricing, all else equal”; Meanwhile, headwinds could come from: lower production in 2Q, the cost of 0%/low financing incentives and tariffs; New PT implies a 5.5% decrease from last price. - Citigroup Inc. will pay a $61 million fine to the Federal Reserve over issues related to data-quality management and risk controls.
The central bank said Wednesday that the penalty was for violating an enforcement action from 2020. The Fed said Citigroup would also pay approximately $75 million to the Office of the Comptroller of the Currency. - Gold rises on Fed rate-cut expectations, U.S. inflation data in focus
Gold prices rose on Wednesday after comments from Federal Reserve Chair Jerome Powell raised expectations that the U.S. central bank is on track to lower interest rates soon, while investors awaited U.S. inflation data for more cues. Spot gold rose 0.6% to $2,378.25 per ounce. U.S. gold futures climbed 0.7% to $2,384.80. - Samsung to launch upgraded voice assistant Bixby this year with its own AI
Samsung will launch an upgraded version of its voice assistant Bixby this year based on its own artificial intelligence models; mobile chief TM Roh told CNBC. The Bixby upgrade is part of Samsung’s broader push to market AI features on its suite of devices. Roh said the company will maintain its strategy of allowing multiple voice assistants on its devices.
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