- Stock Selloff Takes Breather as Dollar Stabilizes: Markets Wrap
(Bloomberg) — Asian stocks regained some ground after a global selloff as traders awaited this week’s US
payrolls data to gauge the extent of the Federal Reserve’s easing. The dollar steadied. The MSCI Asia Pacific
Index rose 0.5% after falling more than 2% on Wednesday, its biggest drop since the Aug. 5 rout. - S&P 500 books back-to-back losses as Wall Street grapples with a rocky start to September
The S&P 500 and the Nasdaq Composite fell for a second straight session in a lackluster start to September.
The S&P 500 lost 0.16% to finish at 5,520.07, while the Nasdaq Composite slipped 0.3% to close at 17,084.30.
The Dow Jones Industrial Average was the outlier, edging up 38.04 points, or 0.09%, to end at 40,974.97. - Oil steady as investors weigh weak demand, potential delay to OPEC+ output hike
Oil was attempting to hold its line in early trade on Thursday after an overnight sell-off, as players grappled
with weak demand alongside a possible delay to more supply entering the market next month. Brent crude
futures for rose 9 cents, or 0.12%, to $72.79 at 0002 GMT after dropping 1.42% in the previous session. U.S.
West Texas Intermediate crude futures for October were up 12 cents, or 0.17%, to $69.32 after dropping
1.62% on Wednesday. Both benchmarks settled $1 lower at Wednesday’s close. OPEC+ is discussing delaying
its oil output increase, scheduled to start in October after oil prices tanked to a nine-month low on Sept. 3,
four sources from the producer group told Reuters on Wednesday. - Gold hits two-week low as traders expect smaller U.S. Fed rate cut
Gold prices slipped to their lowest level in nearly two weeks on Wednesday, extending declines to a fourth
straight session as markets priced in smaller rate-cut bets for the U.S. Federal Reserve’s policy meeting this
month. Spot gold dropped 0.02% to $2,493.33 per ounce. U.S. gold futures fell 0.06% to $2,524.40. - Point72 and Walleye Gain, Jain Drops Amid August Turmoil
(Bloomberg) — Walleye Capital and other multistrategy hedge funds produced steady returns last month
despite whiplash in global markets and speculation about a possible US recession. Steve Cohen’s Point72
Asset Management gained about 1.6% in August, according to people familiar with the matter who asked not
to be identified because the numbers are private. - Fed’s Daly Says Rate Cuts Needed for Healthy Labor Market: Rtrs
(Bloomberg) — The Federal Reserve needs to cut interest rates to keep the labor market healthy, but it’s now
down to incoming economic data to determine by how much, San Francisco Fed President Mary Daly says in
an interview with Reuters. - Trump Says His Debate Strategy Is to Give Harris Room to Speak
(Bloomberg) — Donald Trump said he plans to allow his opponent, Kamala Harris, to speak without
interruption during their presidential debate next week, a shift for the reality-television-star-turned-politician
who built a career on combative exchanges. - Harris Pushes 28% Capital Gains Tax Rate on $1 Million Earners
(Bloomberg) — Vice President Kamala Harris called for a 28% capital gains tax rate on people earning $1
million or more, touting it as a measure that would ensure the wealthy paid their fair share as she sought to
detail her economic agenda and draw a contrast with Republican rival Donald Trump. - US Job Openings Decline to Lowest Level Since January 2021
(Bloomberg) — US job openings fell in July to the lowest since the start of 2021 and layoffs rose, consistent
with other signs of slowing demand for workers. Available positions decreased to 7.67 million from a
downwardly revised 7.91 million reading in the prior month, the Bureau of Labor Statistics Job Openings and
Labor Turnover Survey, known as JOLTS, showed Wednesday. - Biden to Block Nippon Steel’s Proposed Takeover of US Steel
(Bloomberg) — US President Joe Biden is preparing to block Nippon Steel Corp.’s $14.1 billion takeover of
United States Steel Corp., according to people familiar with the matter. But US Steel, responding on
Wednesday evening, vowed to “pursue all possible options under the law to ensure” that the sale is
completed. - Oaktree’s Marks Says Fed Cuts Won’t Take US Rates Below 3%
(Bloomberg) — US interest rates will settle in a range of between 3% and 4% after reductions by the Federal
Reserve, according to Oaktree Capital Management LP’s Howard Marks. The Fed will back off from the
emergency rate of five and a quarter, five and a half and get down into the threes, Marks, the co-chairman
and co-founder of Oaktree said at a conference in Melbourne. - Japan Real Wages Unexpectedly Rise, Keeping BOJ on Hike Path
(Bloomberg) — Japanese workers’ real wages rose for a second consecutive month, keeping the central bank
on track for another potential rate hike later this year. Real cash earnings for workers climbed 0.4% in July
from a year earlier, the labor ministry reported Thursday. - Verizon Is Said in Talks to Buy Frontier Communications
(Bloomberg) — Verizon Communications Inc. is in advanced talks to acquire rival telecommunications
operator Frontier Communications Parent Inc., according to a person familiar with the negotiations. An all-
cash deal between the two companies could be announced as soon as Thursday, the person said, asking not
to be named discussing non-public information. - Market Chatter: Apollo Global Management Mulls Dabbling in Private Credit Market
Apollo Global Management (APO) is considering a secondary trading desk for private debt offered by a select
group of lenders, Bloomberg reported Wednesday, citing sources. The investment firm is thinking of joining
other companies in the $1.7 trillion private credit market that deals in illiquid loans. - European luxury stocks fell, with LVMH and Richemont notable underperformers as Morgan Stanley cut
its price targets on the two stocks amid worries over weakening demand from Chinese customers
Morgan Stanley analyst Edouard Aubin cut equal-weight-rated LVMH’s PT to €715 from €760, as well as
lowering estimates. Now forecasts organic sales growth of 1% in 3Q in its fashion & leather goods division as
analyst believes trends in the Chinese cluster have further deteriorated. The analyst cuts Richemont’s equal-
weight PT to CHF136 from CHF142. Analyst says Chinese demand weakness and Swiss franc strength makes
him more cautious as to the trajectory of Richemont’s results for the fiscal year ending March 2025. Adding
to the gloom, Swiss luxury watchmakers are turning to the government for financial aid to help them weather
a downturn in demand. - Mondelez International shares climbed 4.2% after Chief Financial Officer Luca Zaramella said during the
Barclays Global Consumer Staples Conference Wednesday that the company’s executives feel quite good
about the back half of the year
I think you will be pleased with the numbers you’re going to see in Q3, he said. July and August trends were
good in Europe, and in the US the most recent numbers on category and share performance were also good,
Zaramella said. He also said the company is anticipating a material reduction in cocoa prices, and said it will
be very careful in its approach to pricing. - Centene Corp. shares fell 8.7% after the insurer released a projection for members in its Medicaid
program that disappointed investors
Membership in the joint state-federal health program for low-income people will be about 13 million this
year, the insurer said at the Wells Fargo Healthcare Conference. The company had earlier forecast 13.6
million members by the end of 2024. The drop means Centene will collect less in expected premiums to cover
the medical costs of the people who remain on its plans. That’s driving pressure on a key gauge of expenses,
called the medical-loss ratio, that investors watch closely. Centene’s Medicaid business will have a higher
medical-loss ratio in the third quarter than in the second, Chief Financial Officer Drew Asher said at the
conference. - Hewlett Packard Enterprise fell 2% afterhours after it reported weaker-than-expected margins,
suggesting lower profitability than anticipated in its AI server business
Fiscal third-quarter adjusted gross margins were 31.8%, a decline from the period a year ago, the company
said Wednesday. Analysts, on average, estimated 33.4%. The decline was driven by a higher mix of AI server
revenue, Chief Financial Officer Marie Myers said. Hardware makers including HPE, Dell Technologies Inc. and
Super Micro Computer Inc. have enjoyed a jump in customer demand for high-powered servers to handle AI
tasks. HPE reported $1.3 billion in revenue from this business line in the quarter that ended July 31, a 39%
increase from the previous period and higher than analysts’ average estimate. Investors have become
increasingly concerned about the lower margins of most AI servers, owing to the expensive semiconductors
they contain made by companies such as Nvidia Corp. In an interview, Chief Executive Officer Antonio Neri
said that over time HPE will sell more higher-margin products and services along with the AI servers. - GitLab shares soared 21.6% higher after the application software company reported second-quarter
results that beat expectations and raised its full-year forecast
SECOND QUARTER RESULTS: Revenue $182.6 million, +31% y/y, estimate $177.2 million. Adjusted EPS 15c vs.
1c y/y, estimate 10c. Adjusted gross margin 91% vs. 91% y/y. THIRD QUARTER FORECAST: Sees revenue
$187.0 million to $188.0 million, estimate $187.7 million. Sees adjusted EPS 15c to 16c, estimate 11c. 2025
YEAR FORECAST: Sees revenue $742.0 million to $744.0 million, saw $733.0 million to $737.0 million,
estimate $735.7 million. Sees adjusted EPS 45c to 47c, saw 34c to 37c, estimate 37c.
