- Asian Equities Climb Ahead of Central Bank Events: Markets Wrap
(Bloomberg) — Stocks in Asia edged higher ahead of key events from the Federal Reserve and the Bank of
Japan that will help define the global rates trajectory. The MSCI Asia Pacific Index climbed 0.2% as
benchmarks in Japan, Australia and South Korea rose. That came after the S&P 500 and Nasdaq 100 indexes
advanced on further signs the Fed will cut interest rates. - S&P 500, Nasdaq close higher as Fed minutes lift investors’ hopes for a September rate cut
The S&P 500 advanced Wednesday after a summary of the Federal Reserve’s policy meeting last month
reinforced hope for lower rates in the near future. The broad index added 0.42% to 5,620.85, marking its
ninth winning session of the last 10. Wednesday’s advance propelled the benchmark within 1% of its all-time
record close. Four of the 11 sectors that comprise the S&P 500 notched 52-week highs during the session.
The Nasdaq Composite climbed 0.57% to 17,918.99, also clinching its ninth positive day of 10. The Dow Jones
Industrial Average ticked up by 55.52 points, or 0.14%, to finish at 40,890.49 for its sixth winning day of the
last seven. The Russell 2000 outperformed, with the small cap-focused index climbing more than 1%. Those
moves came as Fed officials said a decrease to the borrowing cost during the September policy meeting was
increasingly likely, according to minutes from the July gathering released Wednesday afternoon. - Oil prices slow sell-off as expectations of Fed rate cut grow
A sharp sell-off in crude oil paused on Thursday after expectations of a rate cut by the Federal Reserve offset
a bunch of weak economic data from the world’s two largest economies, the United States and China. Brent
crude futures were 3 cents up to $76.08 a barrel. U.S. West Texas Intermediate crude futures fell 5 cents to
trade at $71.88 at 0036 GMT. Both contracts lost over $1, or more than 1%, in the previous session. WTI
touched its lowest since early February on Wednesday after revised U.S. employment statistics showed fewer
jobs than previously reported and weak economic data from China, the world’s second-largest economy. The
revised jobs data offset support from a drop in U.S. oil inventories. - Gold prices hover near record high post U.S. Fed minutes
Gold prices regained lost ground on Wednesday to hover close to their all-time highs after minutes from the
U.S. Federal Reserve’s last meeting showed officials strongly leaned towards an interest rate cut at their
September policy meeting. Spot gold was up 0.1% at $2,516.01 per ounce after hitting a record high of
$2,531.60 on Tuesday. U.S. gold futures settled 0.1% lower at $2,547.50. Gold is closing at the highs after Fed
minutes indicated that a vast majority of the committee was prepared to cut rates in September, said Tai
Wong, a New York-based independent metals trader. - Hedge Fund Tribeca Says Weak Bank Research Fueled Its 19% Gain
(Bloomberg) — Australia’s second-best performing hedge fund is profiting from greater market swings during earnings seasons, saying investment bank research has failed to track the ups and downs of faster-evolving industries. - LVMH’s Sephora Cuts Around 10% of China Staff as Woes Deepen
(Bloomberg) — Cosmetics retailer Sephora is cutting hundreds of staff in China, according to people familiar
with the matter, as one of LVMH’s biggest brands tries to turn around a loss-making operation in the world’s
second-largest economy. Sephora China has fired both office and store staff while persuading others to
resign. - Mexico Prices ¥152.2 Billion in First Samurai Bond in Two Years
(Bloomberg) — Mexico priced a Samurai bond Thursday, showing that there’s investor demand in Japan for
riskier debt though costs have gone up. The sovereign issuer sold ¥152.2 billion, $1.05 billion, of debt in five
tranches, including 10-year notes at a spread of 140 basis points, according to Daiwa Securities Co., one of
the underwriters. - Binance Hiring 1,000 as Compliance Spending Tops $200 Million
(Bloomberg) — Binance Holdings Ltd. is hiring 1,000 people this year with many earmarked for compliance
roles as the crypto exchange’s annual spending to meet regulatory requirements, including US oversight
under a plea deal, tops $200 million. Chief Executive Officer Richard Teng, who is visiting the US to talk to
monitors and officials, outlined the employment goals for the world’s largest crypto trading platform in an
interview with Bloomberg News in New York on Wednesday. - Walz Leads Rising Stars Targeting Trump On Convention Stage
(Bloomberg) — Democrats at their convention in Chicago on Wednesday are turning the spotlight to the next generation of party stars in a bid to cast Republican presidential nominee Donald Trump as an elderly, out-of-touch candidate and existential danger. - Fed Minutes Show Several Saw Case for Cutting Rates in July
(Bloomberg) — Several Federal Reserve officials acknowledged there was a plausible case for cutting interest
rates at their July 30-31 meeting before the central bank’s policy committee voted unanimously to keep them
steady. Several observed that the recent progress on inflation and increases in the unemployment rate had
provided a plausible case for reducing the target range 25 basis points at this meeting or that they could have
supported such a decision, minutes from the meeting, published Wednesday in Washington, said. - BOJ’s Ueda Is Set to Face Intense Scrutiny After Market Chaos
(Bloomberg) — Governor Kazuo Ueda will face intense market scrutiny Friday after the Bank of Japan’s rate hike and his clear hawkish signals contributed to a meltdown in global financial markets earlier this month. Ueda is scheduled to respond to questions from lawmakers in the lower house of parliament from 9:30 a.m. - Bank of Korea Holds Rate Steady to Rein in Housing Market
(Bloomberg) — The Bank of Korea held its benchmark interest rate steady as authorities seek to rein in rising
home prices that are fueling household debt concerns. The central bank maintained its seven-day repurchase
rate at 3.5% in a decision Thursday that met the expectations of 22 of 23 economists surveyed by Bloomberg. - Robert F. Kennedy Jr. Is Expected to End His Presidential Campaign
Short on cash and losing traction with voters, Mr. Kennedy intends to make a speech about his political
future on Friday. Robert F. Kennedy Jr. is expected to end his troubled independent presidential campaign
this week, according to three people briefed on his plans, and is in talks to throw his support behind former
President Donald J. Trump. - Harris Had More Donors in 11 Days Than Biden Did Over Entire Run
(Bloomberg) — Vice President Kamala Harris drew more than 2.4 million donors in her first 11 days at the top
of the Democratic ticket — nearly 200,000 more contributors than during the entirety of President Joe
Biden’s year-plus long campaign. The surge in donors resulted in $201 million in individual contributions for
her campaign and the Democratic Party. - Trump Says It’s Hard to Talk Policy With Obamas Attacking Him
(Bloomberg) — Donald Trump said he’d like to focus on policy, as his allies are urging him to do, but can’t
when Barack and Michelle Obama are delivering scathing critiques of him on prime-time television. Did you
see Barack Hussein Obama last night?, Trump said Wednesday at a rally in Asheboro, North Carolina. - Yen’s Rebound Threatens Growth Story in Japan: Earnings Watch
(Bloomberg) — Japanese companies have just posted record quarterly profits, but the yen’s rebound is fueling
worries about just how sustainable their earnings growth will be amid weak demand in China and the risk of a
slowing US economy. The murky outlook is likely to dog Japanese stocks after they suffered one of the worst
crashes in history earlier this month. - China Banks Become Surprise Winners of Frenzied Hunt for Yield
(Bloomberg) — It’s arguably one of the last places you’d expect stock investors to turn as China’s economy
struggles and its real estate crisis worsens. But Chinese banks have suddenly become market darlings as
investors bet their outsized dividend payouts and state support will make them winners in a country where
yields on bonds have tumbled near record lows. - Bronfman Raises Offer for Paramount Global to $6 Billion
(Bloomberg) — Media investor Edgar Bronfman Jr. raised his offer to take control of CBS parent Paramount Global to $6 billion, according to people familiar with his proposal, potentially upsetting the company’s plan to merge with independent producer Skydance Media. The bid tops a $4.3 billion proposal he made on Aug.19. - China Vows Crackdown on Bond Speculation, Warns of Risk: Papers
(Bloomberg) — China will step up investigation and punishment of illegal activities in the bond market, in a
bid to prevent financial risks and maintain market orders, several major official newspapers reported, citing
interviews with Xu Zhong, deputy secretary general of the National Association of Financial Market
Institutional Investors, or NAFMII. - Macy’s Inc shares tumbled 12.9% after it missed analysts’ estimates for its quarterly revenue and
lowered its outlook for sales during the rest of the year, citing increased discounting by competitors and a
more cautious consumer
Sales in the quarter through Aug. 3 fell 3.8% to $4.9 billion, the department-store operator said. Analysts had
been expecting revenue of $5.1 billion on average. Comparable sales at Macy’s were down 4.5% on an
owned basis and fell 1.1% at Bloomingdale’s, a sign that even high-end consumers are showing greater
caution. At Bluemercury, they rose 2%. Sales of skincare and other beauty products have remained strong
despite a slowdown in consumer spending elsewhere, buoying the results at the cosmetics chain. - TJX Cos. shares gained 6.1% after the off-price retailer increased its full-year projections for comparable
sales and profit following second-quarter results that broadly topped Wall Street expectations
Analysts are encouraged by the outlook boost, and Chief Executive Officer Ernie Herrman’s comment that the
third quarter is off to a strong start. TJX also said its acquired a 35% stake in Dubai-based Brands for Less for
$360 million. SECOND QUARTER RESULTS: Net sales $13.47 billion, +5.6% y/y, estimate $13.32 billion. EPS
96c vs. 85c y/y. Comparable sales +4% vs. +6% y/y, estimate +2.73%. Pretax profit margin +10.9% vs. +10.4%
y/y, estimate +10.7%. Merchandise inventories $6.47 billion, -1.7% y/y, estimate $6.73 billion. Ending store
count 5,001, +2.4% y/y, estimate 5,008. 2025 YEAR FORECAST: Sees EPS $4.09 to $4.13, saw $4.03 to $4.09.
Sees comparable sales +3%, saw +2% to +3%, estimate +2.76%. Sees pretax profit margin +11.2%, saw +11%
to +11.1%, estimate +11.2%. - Target Corp. surged 11.2% after it ended a string of quarterly sales declines by focusing on cutting prices on essential goods, winning over inflation-hit consumers who are pulling back from other retailers
The company’s comparable sales, a key gauge of retail success, rose for the first time in more than a year in the second quarter. Shoppers returned to Target stores thanks to deals such as $15 bras and $1 pool noodles, as well as price cuts on essentials like milk and bread. Target’s comparable sales rise of 2% in the quarter was higher than the average estimate. Comparable sales for discretionary items were slightly negative during the quarter, but apparel and beauty products were among the categories that saw growth. Price cuts also drove sales of basics like groceries. Results from Target and rival Walmart show American consumers are willing to spend, but they’re hunting for bargains and prioritizing lower-priced necessities. Shoppers are still holding off on big-ticket items such as designer clothes and appliances at stores like Macy’s Inc. and Home Depot Inc., though, as they wait for interest rates to ebb. - JD.com ADRs fell 4.2% Wednesday after Walmart sold its stake in the Chinese e-commerce firm. The
stake sale marks the end of a partnership that started in 2016
Walmart sold 144.5 million shares for $24.95 apiece, according to people familiar with the matter. Citi analyst
Alicia Yap says Walmart’s exit was a surprise and the subsequent stock decline is reflecting the unexpected
news. Given recent strong traction of Walmart stores and Sam’s Club stores sales in China, and the expiration
of the 8-years non-compete agreement, we believe it is possible that Walmart might decide to redeploy the
capital for its own stores expansions, says Yap. - Snowflake Inc. gave a sales outlook that failed to reassure investors that the company will gain ground
in the market for artificial intelligence software tools. The shares fell 8% in afterhours trading
Product revenue, which makes up the bulk of Snowflake’s business, will be $850 million to $855 million in the
period ending in October, the company said. Analysts, on average, predicted $848 million, although some
estimates exceeded $900 million. The company also raised its fiscal year product sales forecast to $3.36
billion from $3.3 billion. Under Chief Executive Officer Sridhar Ramaswamy, Snowflake has launched products
focused on generative AI and other new ways to analyze large sets of data. The strategy is fueled in part by
increased pressure from rivals including Databricks Inc. and cloud infrastructure providers like Microsoft
Corp. Snowflake offers software that helps customers find, organize and use huge amounts of information
from a variety of sources. - Tesla to recall more than 9,000 Model X SUVs, NHTSA says
Tesla is recalling 9,136 Model X sports utility vehicles over a trim on the roof that could separate, increasing
the risk of a crash, the National Highway Traffic Safety Administration, NHTSA, said. This marks a rare physical
recall for the Austin, Texas-based automaker, which usually fixes issues in its vehicles through over-the-air
software updates. Tesla recalled nearly 2.6 million vehicles due to safety concerns in the first six months of
the year, only behind Ford Motor which has recalled about 3.6 million vehicles in the U.S., according to recall
management platform developer Bizzycar. - China’s growing authoritarianism poses a global challenge, Taiwan’s President Lai warns
Taiwan’s President Lai Ching-te has cautioned that China’s growing authoritarianism will not stop with the island, and that it poses a challenge at the global level. Lai was speaking at the annual Ketagalan Forum, a dialogue focusing on security issues in the Indo-Pacific. It was attended by representatives from several countries including the U.S., India, Japan, Australia and Canada. We are all fully aware that China’s growing authoritarianism will not stop with Taiwan, nor is Taiwan the only target of China’s economic pressures, Lai said, adding that this authoritarianism is becoming more aggressive. It’s now a challenge at the global level, Lai emphasized, calling for countries to cooperate and curtail China’s efforts. - China’s state media slams U.S. over Biden nuclear strategy report
China’s state media and foreign ministry quickly moved to criticize Washington, after the New York Times
reported that U.S. President Joe Biden had reoriented the U.S.′ nuclear strategic plan to focus to Beijing’s
rapid expansion of its nuclear arsenal. The White House said that the nuclear strategic plan was not in
response to a single country or threat. - India walks a diplomatic tightrope, making friends with Ukraine while ally Russia watches on
Indian Prime Minister Narendra Modi’s visit to Ukraine on Friday is likely to be closely watched by New
Delhi’s long-standing ally, Russia. The trip comes as India looks to navigate tricky alliances with both Russia
and the West. India is one of the few countries that has robust trading and diplomatic relations with both
sides in the war that has been waging in Ukraine since Russia’s February 2022 invasion. Modi’s trip to Kyiv is
the first such engagement undertaken by an Indian head of state in over 30 years. - Microsoft revamps reporting structure to give better visibility into cloud consumption revenue
Microsoft announced that it will remove two components of the Azure and other cloud services revenue
growth metric it releases every quarter. The change will provide a better understanding of the performance
of the growing Azure cloud infrastructure business, which competes with Amazon Web Services, one analyst
said. - China calls EU tariffs on EVs unfair, says it will take necessary measures to defend industry
A Ministry of Commerce spokesperson told reporters that Beijing continues to believe the EU’s probe into
China’s subsidies for EVs are promoting unfair competition. On Tuesday, the European Commission lowered
import duties on a number of electric vehicle manufacturers importing cars into the EU from China, including
Tesla. Beijing said it would take all necessary measures to defend its Chinese electric vehicle companies.
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