- Asian Stocks Rebound After Upbeat US Economic Data: Markets Wrap
(Bloomberg) — Asian stocks advanced as upbeat US growth data suggested the Federal Reserve is engineering
a so-called soft landing for the economy. Equities in Australia and South Korea rose while those in Japan
inched up. The MSCI Asia Pacific Index headed for a fourth month of gains as traders awaited a key US
inflation report due Friday. - Dow rises 200 points for fresh record close, Nasdaq falls as Nvidia shares tumble
The Dow Jones Industrial Average climbed to a record Thursday, as Wall Street tried to resume its comeback
from a steep sell-off earlier this month. The 30-stock index rose 243.63 points, or 0.59%, for a fresh record
close of 41,335.05. Gains in Goldman Sachs, Intel and Visa helped lift the blue-chip average to a new high.
The S&P 500 ended the session just below the flatline at 5,591.96. The Nasdaq Composite slid 0.23% to end
at 17,516.43. Artificial intelligence darling Nvidia, which fell 6.4%, weighed on the S&P 500 and the Nasdaq.
In its fiscal second quarter, the AI chipmaker exceeded expectations on the top and bottom lines, and it
issued a rosy current-quarter sales outlook on Wednesday afternoon. - Oil steady as players take stock of Middle East supply concerns
Oil prices were steady in early trading on Friday as investors weighed supply concerns in the Middle East
against signs of weakened demand. Brent crude futures for October delivery expire on Friday and were
unchanged at 0033 GMT. The more actively traded contract for November LCOc2 fell 7 cents or 0.09% to
$78.75. U.S. West Texas Intermediate crude futures were down 11 cents, or 0.14%, to $75.80. Both contracts
settled more than $1 higher on Thursday driven by oil supply concerns. More than half of Libya’s oil
production, or about 700,000 barrels per day, was offline on Thursday and exports were halted at several
ports following a standoff between rival political factions. - Gold gains as investors zero in on Fed cuts, inflation data
Gold prices gained on Thursday, fueled by strong expectations of a Federal Reserve rate cut in September
with investors focusing on U.S. inflation data for further insights on the potential size of the cut. Spot gold
added 0.91% to $2,525.12 per ounce. U.S. gold futures rose 0.82% to $2,558.60. - Hedge Funds Clash With Wind Power Firms in Taiwan Swap Markets
(Bloomberg) — Hedge funds and wind-farm companies are doing battle in an opaque corner of financial
markets. The trade is centered on a gap between deliverable and non-deliverable 10-year Taiwan dollar
interest rate swaps which is near a five-year high. The spread is the result of a tug-of-war between
speculators betting against rising rates and companies. - US GDP & Jobless Claims Highlights: US GDP grows at 3% in Q2; Jobless claims dip to 231,000
The US economy grew last quarter at a healthy 3% annual pace, fueled by strong consumer spending and
business investment, the government said Thursday, August 29, in an upgrade of its initial assessment. The
Commerce Department had previously estimated that the nation’s gross domestic product, the total output
of goods and services, expanded at a 2.8% rate from April through June. The second-quarter growth marked
a sharp acceleration from a sluggish 1.4% growth rate in the first three months of 2024. Consumer spending,
which accounts for about 70% of US economic activity, rose at a 2.9% annual rate last quarter, up from 2.3%
in the government’s initial estimate. Business investment expanded at a 7.5% rate, led by a 10.8% jump in
investment in equipment. Also, the number of Americans filing for unemployment benefits fell slightly last
week as the US labour market remains healthy in the face of high interest rates. Jobless claims ticked down
by 2,000 to 231,000 for the week of Aug. 24, the Labor Department reported Thursday, August 29. That’s just
below the 232,000 new filings analysts were expecting. - Tokyo Inflation Tops Expectations, Supporting Case for BOJ Hikes
(Bloomberg) — Inflation in Tokyo picked up speed in August, supporting the case for the Bank of Japan to
continue raising rates at a gradual pace as the bank balances the need to support the economy. Consumer
prices excluding fresh food rose 2.4% in the capital, an acceleration from 2.2% growth in July, the Ministry of
Internal Affairs reported Friday. - Mayo Sees Bank Stocks Ready to Rip on Rates and Soft Landing
(Bloomberg) — With the Federal Reserve preparing to reduce interest rates and the US economy showing few
signs of a recession, banks stocks are set up for a strong rally, according to Wells Fargo & Co. analyst Mike
Mayo. Rate cuts should help net interest margins at many lenders, and indeed numerous large-cap banks are
projecting higher net interest income and margins. - Harris Edges Trump in Key States, With Sun Belt Now Up for Grabs
(Bloomberg) — Kamala Harris has sustained the burst of momentum she brought to the presidential contest
and is leading or tied with Republican Donald Trump in each of the seven states most likely to decide the
race. - Vigorous give and take: U.S. security advisor discusses economic curbs in rare trip to China
U.S. national security advisor Jake Sullivan said he raised concerns about the country’s focus on economic
security in meetings with Chinese officials. Earlier Thursday, a statement from Chinese President Xi Jinping
said he told Sullivan that Beijing hopes Washington will find a right way to get along. Tensions between the
world’s two largest economies have escalated in recent years spilling over from trade into finance and
technology. - Nvidia Discusses Joining OpenAI’s Latest Funding Round
(Bloomberg) — Nvidia Corp., the world’s biggest chipmaker, has discussed joining a funding round for OpenAI
that would value the artificial intelligence startup at more than $100 billion, according to people familiar with
the matter. Apple Inc. and Microsoft Corp. also have been in talks about participating in the financing, said
the people, who asked not to be identified. - Nippon Steel Boosts M&A Case With $1.3 Billion Spend at US Mills
(Bloomberg) — Nippon Steel Corp. announced $1.3 billion in investments at US mills owned by United States
Steel Corp. as the Japanese company steps up efforts to win over workers and politicians for its bid to buy the
Pittsburgh-based steelmaker. - Lululemon Athletica Inc. lowered its sales and profit outlook for the year as increased competition and
relentless inflation curb demand for its yoga pants
The company now sees sales of up to $10.48 billion this year, down from the previous view of as much as
$10.8 billion, offered in early June. Chief Financial Officer Meghan Frank said the cut was due to uncertainties
in the economy, including a shorter holiday season and the upcoming US elections. Sales growth in North
America is slowing as shoppers contend with inflation, higher interest rates and a cooling job market.
Shopper preferences are also moving toward styles that are looser than the leggings Lululemon is known for.
Comparable store sales fell 3% in the category that includes the US in the second quarter ended July 28,
missing analyst expectations. Companywide, that metric rose 2% in the period, slowing for a third
consecutive quarter. - Marvell Technology shares climbed 7.4% in afterhours trading, after the semiconductor device
company reported second-quarter results that beat expectations and gave a third-quarter revenue outlook
that is seen as strong
SECOND QUARTER RESULTS: Adjusted EPS 30c vs. 33c y/y, estimate 29c. Net revenue $1.27 billion, -5.1% y/y,
estimate $1.25 billion. Adjusted gross margin 61.9% vs. 60.3% y/y, estimate 62%. THIRD QUARTER FORECAST:
Sees net revenue $1.45 billion to $1.46 billion, estimate $1.4 billion. Sees adjusted gross margin about 61%,
estimate 61.3%. Sees adjusted EPS 35c to 45c, estimate 38c. COMMENTARY: Marvell’s second quarter
revenue grew 10% sequentially, above the mid-point of guidance driven by strong demand from AI. As a
result, for the third quarter of fiscal 2025, we expect all our end markets to grow sequentially, with
consolidated revenue forecasted to grow 14% sequentially at the mid-point, accompanied by a significant
increase in operating leverage. Next quarter, we expect our combined enterprise networking and carrier end
markets to return to growth, while our data center end market growth accelerates. - Dell Technologies Inc. shares rose 3.3% afterhours after it reported better-than-expected revenue due
to an increase in the sales of its servers to handle artificial intelligence workloads
Orders of AI-optimized servers were $3.2 billion in the fiscal second quarter, up from $2.6 billion in the
previous period, Dell said. The sales backlog for the equipment was $3.8 billion, with the pipeline of deals
several multiples of that, Chief Operating Officer Jeff Clarke said. Most AI server business is with smaller
cloud service providers, but enterprises and governments are an emerging opportunity, Clarke said. Revenue
jumped 9% to $25 billion in the period ended Aug. 2. Analysts, on average, estimated $24.5 billion. Sales in
the unit containing servers was $11.6 billion, compared with the average projection of $10.9 billion. In the
fiscal third quarter, Dell expects sales of about $24.5 billion, in line with estimates. - Okta shares tumbled 17.6% after the application-software company’s outlook for current remaining
performance obligation (cRPO) disappointed some analysts
Most metrics in the second-quarter came in ahead of expectations. Bank of America downgraded its rating to
underperform from buy, finding the headwinds hard to ignore. SECOND QUARTER RESULTS: Adjusted EPS 72c
vs. 31c y/y, estimate 61c. Revenue $646 million, +16% y/y, estimate $632.5 million. Adjusted operating
margin 23% vs. 11% y/y. Adjusted operating income $148 million vs. $59 million y/y, estimate $124.4 million.
THIRD QUARTER FORECAST: Sees adjusted EPS 57c to 58c, estimate 56c. Sees adjusted operating income
$118 million to $120 million, estimate $113.7 million. Sees revenue $648 million to $650 million, estimate
$637.6 million. Sees current RPO of $1.985 billion to $1.99 billion. - Veeva Systems shares rose 8.9% on Thursday, after the healthcare software company reported second-
quarter results that beat expectations and raised its full-year forecast for adjusted earnings
SECOND QUARTER RESULTS: Adjusted EPS $1.62 vs. $1.21 y/y, estimate $1.53. Revenue $676.2 million, +15%
y/y, estimate $667.7 million. Subscription revenue $561.3 million, +19% y/y, estimate $553.8 million.
Adjusted operating income $279.8 million, estimate $265.9 million. Adjusted operating margin 41.4% vs.
35.9% y/y, estimate 39.8%. 2025 YEAR FORECAST: Sees adjusted EPS about $6.22, saw about $6.16, estimate
$6.16. Sees revenue $2.70 billion to $2.71 billion, saw $2.70 billion to $2.71 billion, estimate $2.71 billion.
Bloomberg Intelligence: Veeva’s 2Q revenue surpassed expectations with 15% growth and subscription revenue is healthy. - Best Buy shares rose 14.1% after the retailer reported better-than-expected second-quarter
comparable sales and adjusted EPS, and boosted its year EPS guidance
SECOND QUARTER RESULTS: Adjusted EPS $1.34 vs. $1.22 y/y, estimate $1.16. Revenue $9.29 billion, -3.1%
y/y, estimate $9.24 billion. Gross margin 23.5% vs. 23.2% y/y, estimate 23.5%. 2025 YEAR FORECAST: Sees
adjusted EPS $6.10 to $6.35, saw $5.75 to $6.20, estimate $6.06. Sees comparable sales -1.5% to -3%, saw –
3% to 0%, estimate -1.78%. Sees revenue $41.3 billion to $41.9 billion, saw $41.3 billion to $42.6 billion,
estimate $41.77 billion. - HP
HP Inc. shares rose 2.01% as PC market recovery offsets softness in its printer business, reversing an initial
decline that came after the computer hardware company reported its Q3 results and gave an outlook. The
company reported Q3 net revenue of $13.52 billion compared to estimate of $13.37 billion while adjusted
EPS was 83c compared to estimate of 86c.
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