- Asian Stocks Rally on Fed Cut Hopes, Yen Climbs: Markets Wrap
(Bloomberg) — Asian equities and US futures were broadly higher Thursday on firming signs the Federal Reserve will soon cut interest rates. Japanese stocks fell to reflect a stronger yen. Equities in Australia and South Korea rose alongside Hong Kong share futures. Contracts for the S&P 500 and the Nasdaq 100 both climbed to compound Wednesday’s advances ignited. - S&P 500 posts best day since February as Powell points to possible September rate cut
Stocks rallied Wednesday after the Federal Reserve kept interest rates unchanged, as expected, while highlighting inroads against inflation. Traders also poured back into mega cap tech as chip names soared. The S&P 500 jumped 1.58% to close at 5,522.30, while the Nasdaq Composite popped 2.64% to 17,599.40. It was the best session since February for both indexes. The Dow Jones Industrial Average added 99.46 points, or 0.24%, ending at 40,842.79. At session highs, the Dow was up 455.30 points, or 1.1%. The S&P 500 and Nasdaq were up as much as 2.1% and 3.2%, respectively, before paring those gains. - US Stock Futures Rise as Tech Extends Rally After Fed Meeting
(Bloomberg) — US stock index futures rose in early Asian trading hours Thursday, boosted by the Federal Reserve’s signal that interest rate cuts are on the way and an extended rally in the technology sector. Contracts on the Nasdaq 100 rose as much as 1.1%, while those on the S&P 500 climbed more than 0.6%. Both underlying gauges jumped Wednesday after Fed Chair Jerome.
4.Most in Asia Sustain Manufacturing Growth Even as China Slows
(Bloomberg) — Manufacturing activity across most of Asia continued to expand in July, supported by gains in new orders even as others saw operating conditions deteriorate. Factories in much of North Asia, which have been witnessing a better-than-expected exports growth, stayed in expansion territory.
5. Fed On Course for September Rate Cut as Risks to Job Market Grow
(Bloomberg) — Federal Reserve Chair Jerome Powell signaled central bank officials are on course to cut interest rates in September unless inflation progress stalls, citing risks of further labor-market weakening. Powell said policymakers are moving closer to lowering borrowing costs from a more than two-decade high, highlighting a growing confidence at the Fed to dial back.
6. Carvana beats Wall Street’s second-quarter expectations, guides toward record year
Carvana expects 2024 to be a record year for the used-car retailer. The company’s second-quarter net income was $48 million and net income margin was 1.4%. Carvana said in a separate filing that it would make an at-the-market offering worth approximately $1 billion in stock, 35 million shares or so.
7.Hedge Funds Bought USD/JPY Downside Option Barriers: Traders
(Bloomberg) — Leveraged funds bought downside dollar-yen knock out options on Wednesday after BOJ Governor Ueda’s press conference, according to traders. Option contracts primarily 1-mo. in length, traders say. Some hedge funds bought vanilla put options or put spreads: traders. USD/JPY -0.2% to 149.60.
8. Buyout Firms Are Said to Circle Carlyle’s €2 Billion Forgital
(Bloomberg) — Bain Capital and Cinven are among buyout firms studying Forgital Group, an Italian manufacturer of forged components mainly for the aerospace sector, according to people familiar with the matter. Blackstone Inc. and Warburg Pincus are also among the interested parties for the business, which could be valued at as much as €2 billion ($2.2 billion) in a sale.
9. Robot Software Maker Covariant Gets Takeover Inquiry from Amazon
(Bloomberg) — Covariant, a maker of artificial intelligence software used in industrial robots, received recent takeover interest from Amazon.com Inc., according to people familiar with the matter. Representatives for Amazon and Covariant declined to comment. Founded in 2017, Covariant has raised $245 million from investors including Index Ventures and Radical Ventures.
10. Strikes on Israel’s Enemies in Tehran, Beirut Raise Tensions
(Bloomberg) — Israel demonstrated its willingness to risk retaliation after the targeting within a few hours of senior Hamas and Hezbollah leaders abroad raised the prospect of a regional conflagration. Israeli officials said the killing of Hezbollah’s Fuad Shukr in Beirut late Tuesday was a response to a rocket attack last weekend from Lebanon that claimed the lives.
11. Xi’s Embrace of Meloni Shows China Has Use for Friends in Europe
(Bloomberg) — President Xi Jinping’s warm welcome for the Italian prime minister offers a pointed reminder to European leaders of the economic benefits of engaging with China and also of the potential risks. Italian diplomats hailed Giorgia Meloni’s five-day trip as a success after she secured a sit-down with Xi and a clutch of cooperation deals.
12. Fed holds rates steady and notes progress on inflation
Federal Reserve officials held short-term interest rates steady but indicated that inflation is getting closer to its 2% target. Central bankers made no obvious indications that a rate cut was imminent. Instead, they maintained their statement that more progress is needed before rate reductions can happen. “The Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance,” the Federal Open Market Committee’s post-meeting statement said.
13. OpenAI Says ‘Dedicated’ to Safety in Letter to US Lawmakers
(Bloomberg) — OpenAI, responding to questions from US lawmakers, said it’s dedicated to making sure its powerful AI tools don’t cause harm, and that employees have ways to raise concerns about safety practices. The startup sought to reassure lawmakers of its commitment to safety after five senators including Senator Brian Schatz.
14. Traders to Rewrite Election Playbook as Trump Trails in Odds
Donald Trump’s electoral outlook continues to deteriorate from the heights scaled in mid-July with
betting odds on Predict It now showing his chances dropping briefly to just under 50% — they reached
70% at one stage. The rapid reversal should see a further unwind for any “Trump trades” that remain,
and indeed, investors have received a cautionary lesson in the dangers of underestimating how rapidly
political landscapes can shift. Kamala Harris is now favored, with a 53% chance, Predict It data show.
That’s come after the latest Bloomberg News/Morning Consult survey showed Harris wiping out
Trump’s lead across battleground states. The question for investors is whether to abandon some of the
positions they put on during the surge in expectations for a Trump victory that came after President
Joe Biden’s poor debate performance and then the failed assassination attempt on the Republican
contender.
15. AIG Reports Second-Quarter Loss Due to Core bridge Separation
(Bloomberg) — American International Group Inc. booked a loss in the second quarter due to accounting,charges tied to the formal separation of life and retirement business Core bridge Financial Inc. AIG lost about $4 billion after earning $1.5 billion a year earlier, according to a statement Wednesday.
16. Mastercard Shares Surge as Consumer Spending Holds Firm
(Bloomberg) — Mastercard Inc. shares rose the most since January after profit beat analysts’ estimates on strength in customer spending and online payments. Global purchase volume in the three months
through June jumped more than 7% from a year earlier, to $1.97 trillion, also higher than analysts
expected.
17. Microsoft says OpenAI is now a competitor in AI and search
Microsoft’s relationship with OpenAI has officially become more complicated. On Tuesday, Microsoft added the artificial intelligence startup to the list of competitors in the company’s latest annual report. It’s a roster that for years has included mega-cap peers Amazon, Apple, Google and Meta.
18. Chevron’s Hess Deal Suffers New Blow as Arbitration Drags On
(Bloomberg) — Chevron Corp.’s $53 billion proposed takeover of Hess Corp. suffered another setback as an arbitration hearing to settle an ownership dispute with Exxon Mobil Corp. won’t be held until next year. The international arbitration panel handling Exxon’s claim that Chevron’s acquisition does not give it the right to control Hess’ stake in a Guyanese oil project.
19. ASML (+5.6%) and other Dutch chip-equipment stocks rallied after Reuters reported that the US planned to exempt chip-tool vendors from the Netherlands, Japan and South Korea from upcoming export restrictions.
The new rule next month will expand US powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, but exports from countries including Japan, the Netherlands and South Korea will be exempt, according to the report. This means major chip equipment manufacturers such as ASML and Tokyo Electron will be excluded. It’s unlikely to mean that export restrictions won’t apply to key US allies, but that the US will probably negotiate with these countries on the planned restrictions, JPMorgan analyst Sandeep Deshpande said.
20. Noel Quinn signed off his final quarter as boss of HSBC by announcing the bank will return $3 billion to shareholders after the lender reported earnings that beat expectations.
HSBC’s pretax profit for the three months through June rose to $8.9 billion, topping the $7.74 billion average analyst estimate. Shares rose 4%. HSBC now expects banking net interest income of about $43 billion for 2024, up from an earlier forecast of at least $41 billion. The new forecast comes as the Bank of England has held off on cutting rates in recent months, buoying HSBC’s results. The buyback is a function of HSBC’s “confidence for the future,” Quinn said. He will hand over the reins to the current Chief Financial Officer Georges Elhedery on Sept. 2. HSBC named Jonathan Bingham, its global financial controller, as interim group chief financial officer with effect from Sept. 2.
21. Schneider Electric shares rose 3.1% after the electrical products maker boosted its forecast for the year amid strong demand in its end markets including from data centers and infrastructure clients.
The French company reported net profit for the first six months of the year that fell to 1.88 billion euros ($2.03 billion) from EUR2.02 billion last year. Revenue amounted to EUR18.17 billion, up 3.1%.
Adjusted earnings before interest, taxes and amortization rose 6.6% to EUR3.38 billion. Analysts saw net profit, revenue and adjusted Ebita at EUR2.09 billion, EUR18.11 billion and EUR3.24 billion, respectively. “We are uniquely positioned and continue to invest into materializing on the megatrends of digitization & AI and energy transition,” Chief Executive Peter Herweck said.
22. Airbus shares rose 4.8% after the airplane manufacturer reported adjusted Ebit for the second quarter that beat estimates, with analysts saying that the results were better than expected across the board.
SECOND QUARTER RESULTS: Adjusted Ebit EU814 million, -56% y/y, estimate EU669.8 million. Revenue EU16.00 billion, +0.6% y/y, estimate EU16.01 billion. Net income EU230 million, -78% y/y, estimate EU488.7 million. YEAR FORECAST: Still sees adjusted Ebit about EU5.5 billion, estimate EU5.69 billion. Still sees adjusted free cash flow about EU3.5 billion, estimate EU3.61 billion. Still sees Commercial aircraft deliveries about 770 planes, estimate 770.84. COMMENTARY: A220 Ramp-up Continues Toward 14/MO Rate in ’26. Continues to target a monthly production rate of 4 A330s in 2024 and rate 12 for the A350 in 2028. As announced in June, production rate of 75 A320 Family aircraft per month is now expected in 2027.
23. T-Mobile US Inc. reported new monthly mobile-phone subscribers that exceeded analyst estimates, joining its peers in wooing new customers in the second quarter.
Shares rose 3.9%. The company reported a net 777,000 additional monthly phone subscribers. Analysts were expecting 645,300. T-Mobile raised its forecast for mobile subscribers this year to between 5.4 million and 5.7 million, from as much as 5.6 million previously. Wireless service revenue grew 4% from a year earlier to $16.4 billion, beating estimates of $16.3 billion after T-Mobile increased prices on some of its plans for the first time in nearly a decade. Chief Financial Officer Peter Osvaldik noted that T-Mobile’s new customers are widespread, from rural areas to top urban markets, and don’t include those people adding a second line. Some of the new subscribers have come from T-Mobile’s purchase of budget wireless carrier Mint Mobile, which was approved by the Federal Communications Commission earlier this year. Mint has no brick-and-mortar stores and sells phones and mobile plans entirely online.
24. Boeing named Kelly Ortberg, an aerospace industry veteran with a background in mechanical engineering as its next chief executive Wednesday.
Robert “Kelly” Ortberg, a former CEO at aerospace manufacturer Rockwell Collins, will succeed David Calhoun as CEO and president effective Aug. 8. Boeing announced its new CEO as it reported a loss of more than $1.4 billion on falling revenue during the second quarter. The loss was wider and the company’s revenue lower than Wall Street’s expectations, as both Boeing’s commercial-airplanes business and defense unit lost money. Boeing will continue to burn cash in the third quarter, after consuming more than $1 billion each month in the first half, Chief Financial Officer Brian West cautioned. Just how big the drain would turn out to be for the full year, he couldn’t say.
25. Meta Platforms reported better-than-expected sales for the second quarter, offering evidence that the company’s investments in artificial intelligence are helping it sell more targeted and personalized advertisements.
That progress sent the social media company’s shares up 7.2% in afterhours trading. Addressing investors and analysts, CEO Mark Zuckerberg spent most of his time expounding on Meta’s push into large language models that will power AI chatbots and praising the company’s AI smart glasses and virtual reality headsets. In the more immediate term, Meta has been using AI to improve the way advertisements find interested users, adding efficiency to its most lucrative business.
26. Qualcomm Inc., the world’s biggest seller of smartphone processors, saw an afterhours rally sputter, fueled by concerns that the phone market is recovering more slowly than investors had hoped.
Though Qualcomm projected stronger sales and earnings than analysts anticipated for the current quarter, it said that phone shipments are only gradually rebounding from a prolonged slump. Qualcomm Chief Executive Officer Cristiano Amon said the company expects units to be either “flattish” or up by a single-digit percentage this year. Qualcomm’s earnings forecast initially sent its shares up more than 6% in afterhours trading, but the stock retreated following the remarks from Amon. By 6 p.m. in New York, Qualcomm shares were down more than 1%.
27. Arm Holdings Plc shares tumbled 10.5% in afterhours trading after the chip company held off on boosting its annual forecast, raising concerns that it’s not confident in future growth prospects.
Though Arm handily beat analysts’ estimates with its quarterly results, Chief Executive Officer Rene Haas said the company is seeing weakness in certain markets. That led Arm to maintain its current outlook for the year. Arm has a unique role in the chip industry. Its designs and standards are fundamental to semiconductors that run most of the world’s smartphones. And Haas is trying to extend that reach into the lucrative market for data center gear, helping Arm tap more of the spending devoted to AI systems. Revenue rose 39% to $939 million in the fiscal first quarter, which ran through June, Arm said. That was well ahead of the $905.4 million analysts had projected. But the company maintained its sales prediction for the full year of roughly $3.95 billion, just shy of the $4 billion average estimate.
28. Advanced Micro Devices (AMD) shares rose 4.36% after it reported strong second quarter earnings
results.
Revenue came in at $5.84 billion, beating estimates of $5.73 billion. Adjusted earnings per share was at 69 cents, while estimates were at 68 cents. For the third quarter, AMD forecasted revenue between $6.4 billion and $7 billion, while estimates were at $6.62 billion. Nvidia shares surged 12.81%, adding a record $329 billion in value and bringing its year-to-date gain to 136%. This came after its competitor, Advanced Micro Devices (AMD), gave an upbeat revenue forecast, which reflected a strong demand for artificial intelligence chips.
29. Gold scales 2-week high as Fed nods to likely Sept rate cut
Gold prices climbed to a two-week high on Thursday as U.S. Federal Reserve Chair Jerome Powell opened the door to cutting interest rates as early as September. Spot gold was steady at $2,448.38 per ounce, as of 0217 GMT, after hitting its highest level since July 18 earlier in the session. Prices were just about $35 shy of the record high of $2483.60 scaled on July 17. U.S. gold futures firmed 0.8% to $2,492.50.
30. Oil rises on risk of broadening Middle East conflict
Oil prices rose in early Asian trading on Thursday, extending strong gains in the previous session after the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict and on signs of strong oil demand in the U.S. Global benchmark Brent crude futures rose 67 cents, or 0.8%, to $81.51 per barrel by 0007 GMT, while U.S. West Texas Intermediate crude futures rose 69 cents, or 0.9%, to $78.60 per barrel.
31. Barclays profit dips in the second quarter, beats estimates
LONDON — Barclays on Thursday reported second-quarter net profit attributable to shareholders of £1.2 billion ($1.54 billion), slightly lower than a year ago. Analysts polled by Reuters had expected attributable net profit of £1.03 billion for the quarter, according to LSEG data. Revenue came in at £6.3 billion in the second quarter, against a forecast of £6.25 billion. The British lender this year kicked off a major restructure aiming to improve efficiencies and boost profits, driving its share price 52% higher in the year to date.
32. ‘Internal battle’ in Modi’s BJP on whether India needs Chinese investments, Natixis chief Asia
In the country’s annual economic survey released last Monday, India’s Chief Economic Advisor V Anantha Nageswaran proposed promoting foreign direct investments from China. This proposal was reportedly shot down by Trade Minister Piyush Goyal on Tuesday who said that there was “no rethinking at present.” “Indians will not like this policy, but Modi and his finance ministry realized that this is needed,” Alicia Garcia-Herrero, chief Asia Pacific economist at Natixis said.
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