- Asian Shares Decline as Bonds Extend Selloff: Markets Wrap
Asian equities declined for a second day along with bonds, as traders consider cooling expectations of Federal
Reserve rate cuts for the rest of the year. The MSCI AC Asia Pacific Index fell as much as 1.1% as benchmarks
in Australia and Japan declined while Chinese markets climbed. That’s after equities in the US dropped from
nearly overbought levels, following a relentless advance to all-time highs. - Dow falls nearly 350 points, snapping a three-day win streak
The Dow Jones Industrial Average fell Monday, giving back some of the strong gains from last week, as
Treasury yields rose and investors awaited new earnings reports. The S&P 500 slipped 0.18% to 5,853.98. The
30-stock Dow lost 344.31 points, or 0.8%, to close at 42,931.60 and snap a three-day run of winning sessions.
The Nasdaq Composite was the outlier, rising 0.27% and ending at 18,540.01. Consumer and homebuilder
stocks were among the biggest losers as fears about higher-for-longer interest rates crept up, with Target
down 3.8% and Builders FirstSource off 5.2%. Lennar also shed 4.4%. The yield on the 10-year Treasury
jumped, rising nearly 12 basis points to 4.19%. - Oil prices trim Middle East war risk-gains, China demand remains a worry
Oil prices fell on Tuesday, paring the previous day’s nearly 2% rise as the top U.S. diplomat renewed efforts to
push for a ceasefire in the Middle East, and as slow demand in China, the world’s top oil importer, continued
to weigh on the market. Brent crude futures for December delivery were down 26 cents, or 0.3%, at $74.03 a
barrel at 0046 GMT. U.S. West Texas Intermediate crude futures for November delivery were 2 cents lower at
$70.54 a barrel on the contract’s last day as the front month. The more actively traded WTI futures for
December, which will soon become the front month, lost 23 cents, or 0.3%, to $69.81 per barrel. Both Brent
and WTI settled nearly 2% higher on Monday, recouping some of last week’s more than 7% decline, with no
letup of fighting in the Middle East and the market still nervous about Israel’s expected retaliation against
Iran potentially leading to a disruption of oil supply. - Gold pauses for breath as U.S. yields, dollar move higher
Gold took a breather after surging to a record high on Monday, as higher U.S. Treasury yields and dollar
offset support from growing uncertainties surrounding the U.S. presidential election and the Middle East war.
Spot gold was little changed at $2,723.25 per ounce, as of 1:35 p.m. ET (1735 GMT), after hitting a record
$2,740.37 earlier in the session. U.S. gold futures settled 0.3% higher at $2,738.9. The 10 year yields are
moving a lot higher, the dollar index got stronger. And that’s putting some weight on gold, said Daniel
Pavilonis, senior market strategist at RJO Futures. Benchmark 10-year Treasury yields rose to a 12-week high,
while the dollar index gained, making gold more expensive for overseas buyers. - China Wealth Fund Issues Record $29 Billion of Bonds This Year
Central Huijin Investment Ltd., a unit of China’s sovereign wealth fund that has at times bought equity to
stabilize the stock market, issued bonds that pushed its total local debt sales this year to a record.
The firm has now sold 207 billion yuan ($29 billion) of notes this year, the most since it first tapped the
onshore credit market in 2010. The fresh issuance includes 9 billion yuan of three-year debt securities and 15
billion yuan of five-year bonds, people familiar with the matter said. - Fed’s Daly Says She Doesn’t See Reasons to Stop Cutting Rates
So far, I haven’t seen any information that would suggest we wouldn’t continue to reduce the interest rate.
Daly said Monday at the Wall Street Journal’s TechLive conference in Laguna Beach, California. This is a very
tight interest rate for an economy that already is on a path to 2% inflation, and I don’t want to see the labor
market go further. Policymakers at their meeting last month began lowering interest rates for the first time
since the onset of the pandemic. They cut their benchmark by a half percentage point, to a range of 4.75% to
5%, as concern mounted that the labor market was deteriorating and as inflation cooled close to the Fed’s 2%
goal. - BOE’s Greene Says Falling UK Interest Rates May Spur Spending
Greene said she favored a cautious, gradual approach to easing policy because of uncertainty over how
British consumers will react to falling borrowing costs after interest rate hikes lured many into saving more. A
rate-cutting cycle should reduce the incentives for households to delay consumption and save more, she said
in an opinion piece for the Financial Times published on Monday. The BOE Monetary Policy Committee
member said that lower borrowing costs could release pent-up demand in the economy and boost inflation,
although she also noted the risk of weaker consumption as consumers continue to refinance mortgages at
higher rates. Greene highlighted that real consumption in the UK was just 1.5% above pre-Covid levels,
compared with 13% in the US. - France Aims for Deficit at 2.8% of GDP by 2029 in Long-Term Plan
France’s executive committed to bring the budget deficit to 2.8% of economic output in 2029 from 6.1% in
2024, starting with a sharp adjustment next year. The outline is based on growth accelerating from 1.1% next
year to 1.4% in 2026 and 1.5% in 2027. The document will be sent to the EU by the end of the month as part
of a procedure for France to get an extension to seven years from four to repair public finances. To meet the
conditions for such an extension, the government also presented reforms it said would improve its economic
prospects, including the already-adopted increase in the retirement age and further changes to
unemployment insurance. The plans are pivotal in France’s efforts to restore fiscal credibility after repeated
slippages over the last year and as the minority government resulting from snap elections struggles to get
parliamentary backing for spending cuts and tax increases in 2025. - Britain faces warnings of a tech exodus over tax plans ahead of high-stakes budget
Several media reports suggest that U.K. Finance Minister Rachel Reeves is planning to hike capital gains tax —
a levy on the profit an investor makes from the sale of their investment. Several entrepreneurs and investors
have warned that the U.K. could face an exodus of technology entrepreneurs as a result of the reported tax
changes. Top tech CEOs in the country argue a hike in capital gains tax would make it harder for
entrepreneurs to build businesses in the U.K. - China tightens export controls for tech and goods with military use, ahead of Xi’s trip to Russia
China has unveiled a set of export control regulations for so-called dual-use items, which refer to goods or
technologies that can be used for civilian as well as military purposes. Xi will be attending the BRICS summit
in the Russian city of Kazan from Tuesday to Thursday, according to China’s foreign ministry. The regulations
come amid intensified U.S. sanctions targeting Chinese companies which the U.S. deems have been supplying
dual-use goods, such as drones, to aid Russia’s war effort in Ukraine. - Harris, Liz Cheney tour battleground states to reach Republicans down on Trump
Vice President Kamala Harris and Republican former Rep. Liz Cheney participated in a series of moderated
conversations Monday across the Blue Wall battleground states of Pennsylvania, Michigan and Wisconsin.
Cheney took stabs at former President Donald Trump over his role in the Jan. 6, 2021 attack on the Capitol,
his disdain for NATO, and abortion. The Harris campaign has been reaching out to disaffected Republicans in
the final stretch of the presidential election. - Blinken Takes Off in 11th Attempt to Reach a Middle East Cease-Fire
US Secretary of State Antony Blinken took off Monday for his 11th visit to the Mideast in his so-far
unsuccessful effort to engineer a cease-fire between Israel and Iran-backed militants since the attack on
Israel more than a year ago. With Blinken planning stops in Israel and other countries in the Mideast,
according to the State Department, it may be the last chance for the Biden administration to secure a pause
in Israel’s multi-front conflict with Hamas in Gaza and Hezbollah in Lebanon before the US presidential
election on Nov. 5. - Hyundai Motor India’s shares drop nearly 5% on trading debut after record IPO
Shares were trading down at 1,874 rupees from their initial public offering price of 1,960 rupees, according to
BSE data. The automaker had offered 142.19 million shares at a price band of 1,865 Indian rupees ($22.18) to
1,960 rupees. The shares reportedly got oversubscribed by more than two times, valuing the IPO at 278.56
billion rupees, or $3.3 billion, making it India’s largest-ever IPO by the amount raised. - Year-End AI Bill Gains Momentum as Challenges in Congress Loom
Congressional leaders are considering passing an artificial intelligence package in the lame-duck session that
would boost research and development and promote guidelines for the technology’s use, yet stiff challenges
are ahead. Washington has faced immense pressure to respond to the AI boom by promoting the tech in a
safe and responsible manner. Lawmakers have been grappling with AI’s risks and benefits and several
congressional committees have approved bipartisan bills addressing issues from labor to human rights to
election deepfakes, though Congress has yet to pass any significant legislation. - SGS downgraded to underperform and Intertek Group cut to sector perform at RBC, which says it is
incrementally more cautious on the testing, inspection and certification (TIC) sector heading into FY25
SGS declines as much as 3.6%, while Intertek falls as much as 2.7%. Analyst Karl Green, who maintains a
sector perform rating on Bureau Veritas, says there are clouds on the horizon and chances of further rerating look limited. Notes recent outperformance by the TIC sub-sector over wider business services sector
and now sees better risk-reward elsewhere. Expects the group’s organic growth to moderate to about 6% for
FY25 and FY26, compared to consensus expectations for about 8% in FY24. - AP Moller-Maersk A/S ADRs climb as much as 7% after the shipping company boosted its underlying
Ebitda guidance for the full year following strong third-quarter results
Shares in peer ZIM Integrated Shipping Services jump as much as 9.5. YEAR FORECAST: Sees underlying Ebitda
$11.0 billion to $11.5 billion, saw $9 billion to $11 billion, estimate $10.14 billion (Bloomberg Consensus);
Sees underlying Ebit $5.2 billion to $5.7 billion, saw $3 billion to $5 billion, estimate $4.14 billion; Sees global
container trade +6%, saw +4% to +6%. PRELIMINARY THIRD QUARTER RESULTS: Prelim Ebitda $4.8 billion,
estimate $3.63 billion; Prelim Ebit $3.3 billion, estimate $2.29 billion; Prelim revenue $15.8 billion, estimate
$14.75 billion. Co. upgrades outlook on the back of strong third quarter results combined with strong
container market demand and the continuation of the Red Sea situation. Co. sees FY24 free cash flow of at
least $3b. - Restaurant Brands International shares rise as much as 3.6% in US trading after Truist Securities says
conversations with Burger King franchisees suggest its Addams Family menu was so successful in its first
week that some supplies are selling out
The Wednesday’s Whopper purple buns are anticipated to sell out nationally for at least a few days this
week, while Gomez’s Churro Fries are expected to sell out completely, analyst Jake Bartlett writes in a note.
Maintains below-consensus 4Q Burger King US same-store sales estimate of +0.5% but sees potential upside.
Rates buy with PT $86. Restaurant Brands is expected to report 3Q results on Nov. 5. - Spirit Airlines shares jump as much as 42%, the most intraday since March 2020, after the carrier
reached an agreement with U.S. Bank National Association to extend a deadline by which the airline must
extend or refinance its 2025 bonds to maintain its credit-card processing agreement with the bank
Spirit now has until Dec. 23 to extend or refinance its 2025 bonds to maintain its agreement with the bank,
according to a filing late Friday. SAVE shares have fallen 87% this year. Meanwhile, JetBlue shares drop as
much as 6.3%, the most intraday in over two months. Citigroup analyst Stephen Trent (sell, PT $2.25) says
that while Spirit hardly seems to be out of the woods, a two-month respite to refinance its loyalty bonds
could provide the carrier a little breathing room, and would make aggressive rallies in Frontier Airlines and
JetBlue look premature. - UAE retailer Lulu to launch IPO next week, sell 25% stake
UAE’s retail giant Lulu Group on Monday announced that it would sell 25 per cent shares through an initial
public offering (IPO) with a nominal value of Dh0.051 each. According to a prospectus published in Khaleej
Times on Monday, the company will sell over 2.582 billion (2,582,226,338) shares through a three-tranche
IPO which will commence on October 28 and close on November 5. Lulu Retail Holding will be listed on the
Abu Dhabi Securities Exchange. The listing is expected on November 14, 2024. The offer price range will be
announced on the same day or before the opening of the offering on October 28. - Microsoft to roll out new autonomous AI agents next month, fending off challenge from Salesforce
Microsoft will allow organizations to create their own autonomous AI agents within Copilot Studio, the tech
giant’s platform for customizing and building so-called copilot assistants, starting next month. The company is
also launching 10 new autonomous agents in Dynamics 365, its suite of enterprise resource planning and
customer relationship management apps. Microsoft is doubling down on AI agents at a time when
competition is intensifying up in the red-hot artificial intelligence space, after Salesforce launched its own
agentic AI system last month.
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