- Stocks Drop as Jobs Data Adds to Case for Fed Cuts: Markets Wrap
(Bloomberg) — Asian stocks slipped to a three-week trough on Monday, with Japan leading the declines, after
US jobs data added to concerns that the Federal Reserve may have waited too long to cut interest rates. The
Nikkei 225 index slumped to its lowest in a month, as the yen’s recent advance crimped the earnings outlook
for exporters amid an economy that expanded slower. - S&P 500 tumbles Friday to post worst week since 2023, Nasdaq drops 2% for worst weekly performance
since 2022
The S&P 500 dropped Friday, notching its worst week since March 2023, as investors assessed the fallout
from a weak August jobs report and ditched leading technology stocks. The broad index slid 1.73% to settle at
5,408.42, while the Nasdaq Composite shed 2.55% to close at 16,690.83. The tech-heavy index ended the
session more than 10% off its record close. The Dow Jones Industrial Average fell 410.34 points, or 1.01%, to
end at 40,345.41. - Oil prices jump $1 on Gulf Coast storm, post selloff recovery
Oil futures jumped by a dollar in early trading on Monday as a potential hurricane system approached the
U.S. Gulf Coast, and as markets recovered from a selloff following weaker-than-expected U.S. jobs data on
Friday. West Texas Intermediate crude futures rose $1, or 1.48%, to $68.67 a barrel by 0146 GMT. Brent
crude futures were up 99 cents, or 1.39%, at $72.05 a barrel. Analysts said the bounce was in part a reaction
to a potential hurricane in the U.S. Gulf Coast. - Gold prices subdued as traders await Fed rate outlook cues
Gold prices were flat on Monday, as investors awaited U.S. inflation print due this week to strengthen their
bets on the size of a likely reduction in Federal Reserve’s interest rates. Spot gold held its ground at $2,497.25
per ounce, as of 0305 GMT. U.S. gold futures edged 0.1% higher to $2,526.10. Major data points this week
include the August U.S. Consumer Price Index due on Wednesday, followed by Producer Price Index on
Thursday. - Japan’s Softer Economic Rebound Still Keeps BOJ Hike in Play
(Bloomberg) — Japan’s economy expanded in the second quarter at a pace slightly slower than the
government’s initial estimate, while still advancing enough to keep the Bank of Japan on track to raise
interest rates later this year. Japan’s gross domestic product grew at an annualized pace of 2.9% in the three
months through June compared with the previous quarter. - Yuan’s Rally Tested as China’s Economic Pain to Offset Fed Boost
(Bloomberg) — The yuan’s recent rally has limited room to extend as China’s economic woes may discourage
the repatriation of dollar holdings following the Federal Reserve’s rate cut, according to some analysts.
Chinese companies’ foreign-asset holdings have been in focus amid expectations that lower interest rates in
the US will bring some of those investments back home. - ECB Is Poised to Cut Again in Warm-Up Act for the Fed: Eco Week
(Bloomberg) — The European Central Bank will probably cut interest rates on Thursday in a prelude to a US
move the following week, as the global monetary cycle tilts toward more synchronized easing. Euro-zone
officials have signaled that they’ll deliver a second reduction in borrowing costs, following up on July’s move,
which will be scrutinized by investors. - BOE Grapples With Pace of Gilt Wind-Down in Key UK Budget Issue
Governor Andrew Bailey and his colleagues will decide this month whether to keep the run-off of their
portfolio bought up through years of emergency purchases at a steady pace of £100 billion (€132 billion), or
whether to increase that amount. That would respond to a glut of maturing bonds and stop a drop in gilt
disposals. - The Bond Market Rally Rides on How Fast the Fed Will Cut Rates
(Bloomberg) — Bond traders who struggled to predict how high the Federal Reserve would raise interest rates
are finding the way down just as vexing. At TCW Group Inc., Jamie Patton, the co-head of global rates, is
convinced that even the swift easing that’s now baked into financial markets doesn’t go far enough, leaving
shorter-dated Treasuries plenty of room. - Republicans Accuse Biden Team of Lying About Afghanistan Pullout
(Bloomberg) — Republican lawmakers accused the Biden administration of lying to Americans and sacrificing
the safety of US soldiers during the 2021 Afghanistan withdrawal, in a report that sought to implicate Vice
President Kamala Harris before the presidential election. - Boeing Reaches Deal With Union After Marathon Weekend Talks
(Bloomberg) — Boeing Co. and its largest union said they’ve hammered out a landmark deal to potentially
avoid a strike that would risk crippling the already troubled US aircraft manufacturer. The offer includes a
25% wage increase over four years and a commitment to build Boeing’s next plane in the Seattle area, the
two sides said in separate statements. - New Hedge Fund Gains Backing for Bets on Japan Market Revival
(Bloomberg) — Hong Kong-based Sengu Capital Ltd. is starting a new hedge fund focused on improving
corporate management in Japan, tapping into the country’s financial market revival. The company will start
trading for the fund in early October, Chief Investment Officer Yoshihiko Ohira and Chief Operating Officer
Xavier Fanjaud said in an interview. - Zelis Owners in Talks to Sell Stake at $17 Billion Value
(Bloomberg) — Bain Capital and Parthenon Capital are in talks to sell a minority stake in Zelis in a transaction
that could value the health-care technology company at about $17 billion, people with knowledge of the
matter said. The private equity firms are considering selling a 20% to 25% stake in Zelis, according to the
people. - Mitsubishi Chemical Seeks to Sell Mitsubishi Tanabe: Nikkei
(Bloomberg) — Mitsubishi Chemical is seeking to sell its Mitsubishi Tanabe Pharma unit, Nikkei reported,
without saying where it got the information. Hired a financial adviser and is sounding out possible buyers
including foreign investment funds; hopes to sell for more than 500b yen; still in early stages and may
decided not to sell. - Market Chatter: US Bid to Block Nippon Steel’s Purchase of US Steel Could Strain Ties, Japan’s PM
Candidate Warns
Japan’s former defense minister Shigeru Ishiba, a frontrunner to become the next prime minister, called US
plans to block Nippon Steel’s, TYO:5401, $15 billion bid for US Steel very unsettling, warning it could harm
trust between allies, Reuters reported Friday. The White House is reportedly close to blocking the deal on
national security grounds. - Intel Corp. is considering options for its stake in its struggling automated driving systems provider
Mobileye Global Inc. as part of a major strategy overhaul, people with knowledge of the matter said.
Shares of Mobileye fell 8.5% to a record low
The chipmaker could offload some of its 88% holding in Mobileye on the public market or via a sale to a third
party, according to the people. Founded in 1999, Mobileye provides software and hardware for self-driving
systems. Intel already sold part of its stake in Mobileye last year, raising about $1.5 billion from the deal. If
Intel pushes ahead with trying to raise money using more of its holding in Mobileye, it will be doing it at a
difficult time. Mobileye’s stock was down about 71% this year through Thursday, leaving it with a market
value of roughly $10.2 billion. Mobileye has suffered as automakers have reduced production amid a post-
pandemic supply glut across the industry. Last month, it slashed revenue forecasts and lowered its projection
for adjusted operating income to well below what analysts were projecting. - Super Micro Computer Inc. shares fell 6.8% on Friday after JPMorgan downgraded the server company
to neutral from overweight
The move comes in the wake of a delayed 10-K filing, for which the company said it needed more time to
assess its internal controls. As a result of our expectations for a near-term overhang for the shares from the
uncertainty, we prefer to recommend new investors to remain on the sidelines till the company is back in
compliance, JPMorgan analyst Samik Chatterjee wrote. - DocuSign shares rose 4% on Friday after the e-signature company reported second-quarter results.
While analysts saw the margin performance as a positive, they viewed billings growth as weak
SECOND QUARTER RESULTS: Adjusted EPS 97c vs. 72c y/y, estimate 80c. Revenue $736.0 million, +7% y/y,
estimate $727.9 million. Billings $724.5 million, +1.9% y/y, estimate $721 million. Adjusted gross margin
82.2% vs. 82% y/y, estimate 81.3%. Free cash flow $197.9 million, estimate $172.8 million. 2025 YEAR
FORECAST: Sees revenue $2.94 billion to $2.95 billion, saw $2.92 billion to $2.93 billion, estimate $2.93
billion. Sees subscription revenue $2.86 billion to $2.88 billion, saw $2.84 billion to $2.86 billion, estimate
$2.85 billion. Sees billings $2.99 billion to $3.03 billion, saw $2.98 billion to $3.03 billion, estimate $3 billion. - Bank of America Corp.
Bank of America Corp. shares fell 3.44% after Warren Buffett extended his sales of shares into September,
reaping a total of $6.97 billion since the spree of disposals started in mid-July. In the latest round of
transactions disclosed in a regulatory filing, Berkshire Hathaway Inc. liquidated $760 million of the stock since
Tuesday. Berkshire remains Bank of America’s top shareholder, with a roughly 11% stake valued at $34.7
billion, based on the latest closing price. - Broadcom Inc
Broadcom Inc shares slid by more than 10% on Friday, after the chipmaker forecast fourth-quarter revenue
slightly below Wall Street expectations on Thursday, hurt by sluggish spending in its broadband segment.
Broadcom expects revenue of around $14 billion, with estimates around $14.04 billion instead. On a post-
earnings conference call, Broadcom executives reported that broadband revenue declined 49% in the
reported quarter, while non-AI networking fell 41%, indicating a strong performance in the AI segments was
offset by weak demand in other divisions. - Shares of UiPath initially rose Friday after it reported better-than-expected results in its fiscal second-
quarter earnings report
However, that rally quickly gave way to a sell-off. Investors seemed to reexamine the stock in the context of a
disappointing employment report which led to a sharp sell-off in tech stocks. SECOND QUARTER RESULTS:
Total revenue $316.3 million, +10% y/y, estimate $303.9 million. Adjusted EPS 4.0c vs. 9.0c y/y, estimate 3.3c.
Adjusted operating profit $6.45 million, -79% y/y, estimate $0.82 million. Adjusted gross profit $263.2 million,
+6.6% y/y, estimate $254.3 million. Adjusted gross margin 83% vs. 86% y/y, estimate 83.7%. Annualized
recurring revenue $1.55 billion, +19% y/y, estimate $1.55 billion. Adjusted free cash flow $49 million, +5.2%
y/y, estimate $43.4 million. 2025 YEAR FORECAST: Sees revenue $1.42 billion to $1.43 billion, estimate $1.41
billion. Sees annualized recurring revenue $1.67 billion to $1.67 billion, saw $1.66 billion to $1.67 billion,
estimate $1.66 billion. Sees adjusted operating profit about $170 million, saw about $145 million, estimate
$147.3 million.
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