Expected Fed Rate Cut, Important Stock Market News from Companies and Markets
Market reviews
The Federal Reserve's 0.5% interest rate cut on Wednesday signaled the Fed's intention to protect the labor market and prevent an economic recession. At first, investors liked the decision. The S&P 500, Dow, and gold all hit new records, the Russell 2000 rose nearly 2%, and the dollar weakened across the board. The Fed decided not to upset the market and cut rates to 4.75-5%. Inflation is no longer a concern — the Fed's inflation forecast has been cut to 2.3% by the end of 2024. The main threat now remains a recession.
The Bank of England has no opportunity to claim “greater confidence” as the Fed did, as UK services inflation has reached 5.6% per year, all but confirming that rates are likely to remain unchanged at 5.0%. Bank of England policymakers are likely to reiterate their “cautious” stance against easing too quickly or prematurely.
Also on Thursday, Chinese bond yields fell sharply on expectations that Beijing could announce further easing measures to support its ailing economy now that the Fed will not intervene. Stocks in Hong Kong and China also recouped their early losses and traded higher on expectations of more stimulus.
BlackRock and Microsoft are set to launch a $30 billion-plus fund to invest in artificial intelligence (AI) infrastructure. The fund aims to build data centers and energy projects to support AI development.
On September 17, BlackRock's Bitcoin ETF saw its first inflow of funds in three weeks. Google Cloud launched a new service, Blockchain Remote Procedure Call (RPC), which supports Ethereum mainnets and testnets, with plans to expand to other blockchains. The service aims to simplify the interaction of developers with the blockchain.
Google wins court battle to overturn €1.5 billion antitrust fine in EU digital advertising case. Amazon is working on an alternative to GPS amid growing threats of satellite jamming following Russia's invasion of Ukraine. Amazon's $10 billion Kuiper project aims to launch thousands of satellites to provide internet access in remote areas and could include technology to support GPS.
iPhone repairs will become much more expensive due to the Repair Assistant feature in iOS 18. This feature checks the parts for originality and can block the iPhone if the part is installed from a "donor". To unlock the device, you will need to log in to the Apple Account of the owner of the iPhone from which the part was taken. Most of the parts in the services come from the disassembly of "donors". Now, to safely replace parts, you will need either re-soldering the chip or new original parts, both of which will cost more than before.
U.S. crude oil inventories fell more than expected. This significant drop in inventories indicates either increased demand or a tightening of oil supplies. Boeing shares could come under pressure as the company risks losing its investment grade rating due to a possible prolonged strike, which could further disrupt production and cash flows.
The EU could fine Meta up to 10% of its annual revenue for violating antitrust laws. Regulators suspect Meta of anticompetitive practices in the online classifieds market. Ray Dalio believes the Fed's next move matters less as investors focus on China risks. Dalio argues that the Fed's move will not have a significant impact in the long term.
Amazon is increasing wages for hourly workers in the U.S. in fulfillment and transportation operations, spending more than $2.2 billion. The U.S. Federal Trade Commission said Wednesday that Ryan Cohen, managing partner of RC Ventures LLC and CEO of Gamestop, will pay nearly $1 million to settle an antitrust case.
JPMorgan and UBS join blockchain-based plan Bank for International Settlements to modernize cross-border payments. Bank for International Settlements has enlisted the world's largest banks and credit card companies in a project that aims to improve cross-border payments.
YouTube Shorts to Integrate Google’s AI Video Model Veo Artificial intelligence was the main topic at YouTube’s Made On event on Wednesday morning. The company announced that it will integrate Google DeepMind’s video model Veo into YouTube Shorts, allowing creators to produce high-quality videos using AI.
Brazilian restaurant operator Zamp SA plans to expand its Starbucks chain in the country to 1,000 stores, nearly ten times its current number. U.S. Securities and Exchange Commission vote allows stock prices to be set in half-cent increments. Wall Street's top regulator voted unanimously to allow stock exchanges to set prices for many stocks in half-cent increments, rather than the minimum of 1 cent, a move that should encourage more competitive pricing and lower costs for investors.
Vanguard Buys Dollars, Says Fed Rate Cut Expectations Have Gone Too Far Chevron CEO Michael Wirth Criticizes Biden Administration for What He Calls “Attacks on the Gas Industry,” Emphasizing the Importance of Permian Natural Gas in Powering Rapid Developments in Artificial Intelligence
Chinese regulators have suspended PwC's mainland China unit for six months and levied a record fine over the firm's review of collapsed property developer China Evergrande Group. Indian police have released most of the 104 striking workers at a Samsung Electronics plant detained for staging a protest march without permission, disrupting operations.
U.S. sustainable funds ended August with $350 billion in assets, close to their 2021 peak of $360 billion, according to Morningstar. But after 14 months of net outflows, funds should return to investment growth rather than client demand.
The International Energy Agency said on Thursday that global oil demand will grow less than previously expected this year due to weakness in China, supporting the view that consumption will level off this decade.
Workiva, a provider of financial, environmental, and risk reporting software, conducted a new survey of auditors, accountants, and other professionals, in which 74% agreed that ESG initiatives help improve business performance. However, only 20% believe that ESG data is held to the same standards as financial reporting.
India's gold imports tripled on festive demand and lower import duties. India's gold imports stood at $10.06 billion or 315 tonnes in August, down from 318 tonnes a year earlier. The duty on gold was cut to 6% from 15%, the biggest cut and the lowest duty rate since June 2013. Prior to the announcement, gold import duties had remained above 10% for nearly 11 years.
Eurozone inflation slowed as expected from 2.6% year-on-year to 2.2%. Core inflation also fell as expected from 2.9% to 2.8%. UK inflation remained at 2.2%, while core inflation rose from 3.3% to 3.6%.
The U.S. housing market showed a revival in August, which is associated with a decrease in mortgage rates. The number of building permits issued increased from 1.406 million year-on-year to 1.475 million, while an increase to 1.41 million was expected.
International Reviews
A new series of explosive events have occurred in the Lebanese capital, likely involving the detonation of radios and radio receivers, according to local media. The aim of the new explosions is to increase paranoia and fear in the ranks of Hezbollah, as reported by Axios. The IMF has decided to postpone its mission in Russia indefinitely, citing technical unpreparedness.
A new outbreak of the dangerous Nipah virus has been recorded in India: two people have died, and 150 are under medical observation. A "revolution from the right" was discussed at a secret AfD meeting, according to German media. Ideas about the need for a "regime change" and a "revolution from the right" were voiced at a secret seminar of right-wing populists from the Alternative for Germany (AfD) party, according to an investigation by the media collective Recherche-Nord and the newspaper taz.
NATO Secretary General Jens Stoltenberg said that Moscow is subordinate to Beijing in the anti-Western axis. According to him, Beijing, Moscow, Tehran and Pyongyang are becoming increasingly united, with Xi Jinping at the helm of the alliance. China provides Russia with significant economic support and supplies equipment used in the war against Ukraine. In return, Moscow offers Beijing certain "know-how" to dominate the world in the military sphere, Stoltenberg noted.
Before Trump's scheduled speech tonight, police found explosives in a car near the rally site. The driver fled into the woods. Hundreds of supporters of the US presidential candidate are expected to attend the rally, and according to the latest information, the event is no longer in danger.
The Bank of England (BoE) is set to announce its interest rate decision on Thursday. The BoE is expected to keep rates unchanged, unlike the US Federal Reserve, and most believe it is too early for a second consecutive BoE rate cut.
According to Henley & Partners, China has overtaken the United States in terms of growth in the number of ultra-rich people. The number of centimillionaires, defined as people with assets over $100 million, has increased by 54% over the past decade to 29,350. In China, the number has increased by 108% over the same period, outpacing the growth in the United States, where the number of super-rich has increased by 81%. In Europe, however, the growth in the number of centimillionaires has been limited, at just 26% over the past decade.