Economic stimulus in China, cooling in the US and Europe, stock market news of companies
Stock market news
• Beijing's massive economic stimulus is still rippling through Chinese markets, but its impact on broader markets may already be waning. Mainland blue chips followed Tuesday's 4.3% gain by rising 3.4% in today's session, while Hong Kong's Hang Seng jumped 3.1%, extending yesterday's 4.1% gain.
• China's strong start on Wednesday initially boosted stocks in Australia and South Korea, whose economies are closely linked to China's fortunes, but the gains soon faded. Since Chinese authorities announced their biggest and most extensive stimulus measures since the pandemic on Tuesday, analysts have been left wondering, despite the euphoria, whether anything can fix the underlying structural problems.
• The reaction on Wall Street was muted overnight, with gains of between 0.2% and 0.5%, while U.S. stock index futures were down by about the same amount at the time of writing. Concerns about a slowdown in the U.S. after an unexpected drop in consumer confidence data on Tuesday may have helped temper optimism about the global growth outlook.
• Europe also has plenty of economic troubles, and futures are pointing to a lower start for stocks in the region. Essentially, it all adds up to the same thing: the global easing cycle is already here (unless you're in Japan).
• The People's Bank of China followed a wave of rate cuts on Tuesday with another cut on Wednesday, and traders are heavily biased toward a second major Fed rate cut at its next meeting in November.
• The stock market remains generally calm.
FCX shares led the gains in SPY due to the rise in copper prices after the announcement of a large-scale monetary stimulus in China.
The US dollar weakened against the euro (1.12), gold (new record high) and Bitcoin (slightly below $65,000).
The rally in Chinese stocks continues.
• U.S. consumer confidence fell by the most in three years amid concerns about the labor market. Both indicators point to a deterioration in U.S. economic sentiment.
• Traders are becoming increasingly confident that the European Central Bank will cut interest rates again next month as evidence grows that the economy is weakening.
• US data showed a weakening economy.
Richmond Fed manufacturing index: -21 (-19 previously).
Conference Board (CB) consumer confidence index: 98.7 (105.6 previously).
• Oil prices rose on Tuesday. Oil rose after China unveiled a stimulus package for its economy and a major Israeli strike on Hezbollah targets in Lebanon kept tensions high in the Middle East.
Hurricane threat forces Gulf Coast energy facilities to shut down
Energy companies operating on the Gulf Coast have begun shutting down operations and evacuating facilities in anticipation of a major hurricane expected this week.
OPEC: World oil demand to grow 0.6% per year
from 2023 to 2050, up 18 million bpd to 120.1 million bpd.
• Revolut is launching a standalone investment management app called Revolut Invest.
• The British pound hit a two-year high against the euro after the release of PMI data.
• Boeing (BA) has offered striking workers a 30% pay raise over four years.
• Cloud technology company Snowflake plans to raise $2 billion through the sale of convertible notes. Snowflake is seeking a conversion premium of 32.5% to 37.5% for the notes.
• TikTok is shutting down its music streaming business It has been trying to compete with Spotify and Apple for years. Playlist transfers will be available until October 28, with refunds available until November 28. TikTok is taking on Google's ad business by letting advertisers target its search results page. After building its search product to compete with Google over the past few years, TikTok is now taking its search ambitions even further by letting advertisers target their search results on its search results page. On Tuesday, TikTok announced the launch of the "TikTok Search Ads Campaign," a new keyword-based search solution.
• A U.S. appeals court has criticized the Securities and Exchange Commission (SEC) for its vague rejection of Coinbase's petition to develop rules for regulating cryptocurrencies.
• Intel Launches New AI Chips Amid Takeover Rumors Intel on Tuesday unveiled two new chips aimed at artificial intelligence systems.
• CIBC, Invesco, Stifel Pay Millions to Settle U.S. WhatsApp Investigation (Bloomberg) — U.S. regulators have imposed more than $118 million in fines on several financial firms for failing to store employee emails, the latest fallout from the so-called WhatsApp investigations.
• The U.S. Federal Trade Commission said Tuesday that Invitation Homes, the largest landlord of single-family homes in the U.S., will pay more than $48 million as part of a settlement for defrauding tenants about rent and charging trash fees.
• Snapchat (SNAP) has entered into an expanded partnership with Google Cloud to enhance the AI capabilities of Snapchat's My AI chatbot. The chatbot will leverage Google's Gemini multimodal AI capabilities, allowing it to understand different types of information, such as text, audio, images, and video.
• Trafigura has appointed gas boss Richard Holtum as chief executive.
• Western ETF investors poised to support record gold rally Inflows into gold exchange-traded funds, particularly from Western investors, are set to pick up in the coming months, giving bullion prices already at record highs another boost, analysts say.
• Fed Chair Michelle Bowman took issue with last week's sharp rate cut in a speech Tuesday, citing concerns that a bigger rate cut would signal economic weakness ahead.
• Musk has said his companies want to invest in Argentina. Argentina is the world's fourth-largest producer of lithium, a critical component in electric vehicle batteries. Musk has previously expressed admiration for Argentine President Javier Miley's libertarian policies and his full support for private enterprise.
• Meta will host its Meta Connect event today. The company is expected to showcase its latest advancements in artificial intelligence, virtual reality and the metaverse.
• Amentum (MOV) will replace Bath & Body Works (BBWI) in the S&P 500 on September 30.
• Shares of developer KBH fall 6% after the report. The company sees increased demand after lower mortgage rates and gave good forecasts. Apparently, investors expected more.
• Fed Chair Adriana Kugler will speak on the economic outlook today, continuing a busy week of Fed speeches that includes Chairman Jay Powell on Thursday.
• In Europe today, the ECB's Elizabeth McCall is scheduled to take part in a roundtable discussion, as well as a speech by the Bank of England's Megan Green on consumption.
• Sweden's Riksbank is expected to cut interest rates by 25 basis points later in the day, with economists saying two more cuts are likely at the remaining two meetings in 2024.
The head of the Riksbank, Erik Tedin, himself agrees with this assessment and does not rule out the possibility of cutting the rate by half a point.
Key events that could impact markets on Wednesday:
- Riksbank decision
- ECB McCall and BoE Green to speak
- France consumer confidence, unemployment
International news
• West unites to thwart China's dominance of key minerals - FT A coalition of 14 governments and the European Commission have announced a funding network to secure raw materials needed by the tech industry.
• The Minerals Security Partnership will introduce a new financial network in a bid to boost international cooperation and promise financial support for a huge nickel project in Tanzania backed by miner BHP.
• Iran ready to sit down with Europeans and Americans - The Guardian. To conduct dialogue and negotiations amid accusations of supplying missiles to Russia, - Iranian President Masoud Pezeshkian. The Iranian president called Russia's war against Ukraine "aggression" and denied that his country had provided ballistic missiles to Russia since he took office in July 2024.
He also promised not to do so in the future, but did not mention the Shaheds that his country supplies to Russia.
• The United States has identified the UAE as a key defense partner: “a strategic partner of the United States that is not a member of NATO,” a statement following a meeting between President Joe Biden and Sheikh Mohammed bin Zayed Al Nahyan.
The statement said this was necessary to further strengthen defense cooperation and security in the Middle East, East Africa and the Indian Ocean regions.
• Average salaries in Europe: leaders and outsiders
The highest average salaries in Europe are found in Switzerland (€8,148), Norway (€7,094), and Denmark (€6,068).
The lowest salaries are found in Albania (€422), Bulgaria (€637), and Serbia (€723).
In Central and Eastern European countries such as Poland and Latvia, salaries range from €1,000 to €1,100
. In Italy, Spain, and Austria, the average salary is between €2,000 and €3,500.
• China launches stimulus program to boost economic growth. China's central bank has announced unprecedented stimulus measures that should ensure GDP growth of 5%.
The regulator has cut the base rate, the reserve requirement and announced support for the real estate and stock markets to stimulate demand.
Banks will be given liquidity to provide loans to public companies and large shareholders to buy shares.
The Chinese stock market has risen to a four-month high on measures to support the economy.
• US Congressional leaders announced an agreement on a short-term spending bill to provide funding for federal agencies for about three months - Voice of America. The agreement prevents a government shutdown at the start of the new fiscal year (October 1). Final action on the bill will be delayed until after the upcoming elections.
• Electronic warfare is terrifying airlines, pilots and aviation safety officials. Hundreds of daily flights around the world are experiencing GPS spoofing, creating new risks for pilots and passengers. Fake signals that the military uses to defend against drones and missiles are spreading to more and more commercial aircraft, including international flights by U.S. airlines.
• Turkey prepares to shore up its public finances by issuing new 10-year US dollar bonds
• US fiscal profile to worsen under next administration - Moody's The US fiscal position is expected to worsen further as political polarization makes it difficult for any new presidential administration to negotiate the steps needed to reduce the public debt burden.
• Trump wants to lure foreign companies by offering them access to federal lands. Donald Trump is expected to promise on Tuesday not only to stop the offshoring of American businesses but also to take jobs and factories from other countries. Among the ideas he plans to put forward is to lure foreign companies to the U.S. by offering them access to federal lands.
• Trump calls for 100% tariff on cars made in Mexico as part of US manufacturing plan.