Falling China, rising India, falling ore prices, company news
• The Shanghai Composite Index has fallen more than 5% and was on track for its biggest drop since the pandemic crash in February 2020. Hong Kong’s rebound was quickly crushed. Metals and other commodities fell along with Chinese trusted currencies such as the Australian dollar. “Please be more patient,” HSBC economist Jing Liu wrote in a note, noting that we have yet to hear from the State Council or the Finance Ministry on specific stimulus measures. But it is clear that the opportunity to calm markets has been missed, and the rally is unlikely to be sustainable until the authorities show investors money, and in large quantities.
• China volatility had already pushed European miners and luxury stocks lower on Tuesday, but a further fall in iron ore prices and a sell-off in Rio Tinto and BHP in Sydney suggested further pressure was coming.
• The New Zealand dollar fell below its 200-day moving average as the central bank cut interest rates by 50 basis points and left open the possibility of further cuts - while markets trimmed their expectations for a US rate cut.
• Indian government bonds rose after FTSE Russell said they would be included in its emerging markets index. South Korean government bonds were added to the FTSE World Government Bond Index (WGBI) but were not traded due to a public holiday.
• Yesterday, US stock indices recovered from Monday's decline. Investors are again showing optimism about NVDA's Blackwell chips. Also, the yield on 10-year US government bonds has stabilized around 4% per annum. The dollar remains strong.
• The minutes of the Federal Reserve's September meeting will be released later in the session, although they may not be of much use since Fed officials have been vocal in recent days in pointing out that last week's strong employment figures are positive for the economy.
• The EU plans to raise €10 billion through two bonds. The three- and 15-year bonds will be the first sale of EU debt in the fourth quarter.
• Samsung reported preliminary operating profit of about 9.1 trillion won ($6.8 billion) for the third quarter of 2024, below analysts' forecast of 10.3 trillion won. The company apologized to investors for the disappointing quarterly results.
• The US Supreme Court has denied a petition for certiorari, clearing the way for the US government to sell 69,370 BTC. The bitcoins were confiscated in connection with the Silk Road online marketplace. The sale of such a large amount of bitcoins could significantly impact the price of the cryptocurrency.
• In September, the capitalization of the global crypto market grew by 8% - Binance. According to experts, the growth occurred due to the decision of the central banks of the USA and China to reduce interest rates.
• Global gold ETFs posted their fifth straight month of inflows in September, attracting $1.4 billion.
• Oil fell nearly 5% as Middle East conflict eased, while China's stimulus also disappointed.
• Brussels rejects China's minimum sale price offer. Sources say Brussels has rejected a Chinese government offer to sell imported Chinese-made electric vehicles at a minimum price of 30,000 euros.
• Boeing delivered 33 planes in September as strike hits production Boeing's September deliveries were up six planes from the same month in 2023, when the U.S. planemaker delivered fewer of its popular 737 MAX jets to customers as it tried to fix a manufacturing defect. The strike, which began Sept. 13, has halted production of the MAX, as well as Boeing's 777 and 767 widebody jets.
• Regulators in the US and UK should make it easier for companies to go public, JPMorgan Chase Chief Executive Officer Dimon said.
• X Competitor Mastodon Releases Updated Alerts, Redesigned Design, and More Mastodon, the open-source, decentralized alternative to X, is releasing several new features, including updated notifications, new search tools, and a refreshed design.
• Ray Dalio doesn't expect Fed to cut rates 'significantly' U.S. Treasuries fall again as traders expect Fed to cut rates gradually - Bloomberg U.S. government debt continued to fall slightly on Tuesday, with long-term bond yields reaching their highest levels since late July and inflation data later in the week expected to prompt the Fed to cut interest rates.
• DJT shares surge 19% after Elon Musk appears at Trump rally. Adobe to offer free app for labeling AI-generated content
• Since 2019, Adobe and other tech companies have been working on what they call “Content Credentials,” a kind of digital seal for photos and videos online to indicate how they were created.
• Microsoft shares fall as Oppenheimer warns AI revenues are overvalued - Bloomberg
• Lyft rolls out improved pay measures to attract more drivers. Lyft is looking to make its ride-hailing platform more attractive to drivers by rolling out measures such as paying more for longer-than-expected trips and giving priority to users with safe driving records.
• Uber will launch an AI assistant based on OpenAI's GPT-4o to help drivers switch to electric vehicles. The ride-hailing company has been advocating for the transition to electric vehicles for several years and has pledged $800 million to support its driver partners to go 100% electric by 2040.
• Fed's Collins sees further rate cuts to freeze economy where it is now.
• Hurricane Milton could become a previously unseen Category 6 storm as it moves toward Florida and could worsen U.S. macroeconomic data for October, which is a positive for U.S. Treasuries.
• GM held its investor event yesterday. Shares initially rose 2% on management's optimism, but ended flat.
• SMCI shares fell 5% yesterday after rising 16% on Monday.
• Pepsi (PEP) shares rose 2% yesterday after the report. The company reported weak results and lowered its full-year forecast. But the shares had already fallen before the report.
• DOCU shares rose 6.6% yesterday as S&P Dow Jones Indices announced the stock would be added to the S&P MidCap 400, replacing MDU.
• Roblox shares fell 2% as short-seller Hindenburg Research said the video game platform was inflating its daily user and engagement numbers.
• AFRM shares rose 6.6% yesterday. BTIG analysts upgraded their Buy Now, Pay Later rating to Buy from Neutral and set a price target of $68 on the stock, up from $41 yesterday.
US Trade Balance Data for August 2024: -$70.4B (-$78.9 Previous)
The US trade deficit narrowed sharply in August as exports increased to a record high.
Key events that could impact markets on Wednesday:
- German trade data
- Federal Reserve September minutes
• The Costs of War Project at Brown University found that the U.S. spent at least $22.76 billion on support for Israel last year, as well as on related U.S. military operations in the region, including fighting Iranian-backed Houthi rebels in the Red Sea - The Hill
• Harris explained whether she would agree to negotiate with Putin to end the war in Ukraine. She stated that she is NOT ready for bilateral negotiations with the Russian dictator on the Russian war against Ukraine. She is convinced that Ukraine must certainly participate in any negotiations.
• The UN is a helpless organization that cannot fulfill its main task - to protect the innocent, - Israeli Permanent Representative Danny Danon
He said that the essence of the UN is to stop wars, but, unfortunately, so far the representatives of the organization are not even capable of publicly condemning evil. The history of the League of Nations (1920-46) is repeating itself.
• US opponents are preparing to cast doubt on the results of the 2024 US presidential election - Reuters. At a briefing for journalists on the activities of Russia, China, Iran and Cuba to influence the elections, US intelligence officials said that "foreign actors" will likely work to sow doubt around the election results. At the same time, Russia is betting on Trump. And China and Iran on Harris. That is, they have only one common interest - chaos in the US and the world.
• Former NATO Secretary General Stoltenberg will receive a new position in February 2025. The Norwegian politician will head the Munich Security Conference.
• The Georgian Parliament will resume the impeachment procedure of the President. The reason is her trips abroad. The President of Gurzia takes a pro-Western position, and the Parliament is pro-Russian.
• KLM top manager Marjan Rintel said that while Europe has refused to fly via Russia, China is flying, and in this way its planes save time, money and gain an unfair advantage. Now managers want to force China to pay additional duties so that European airlines do not suffer.
• China announces temporary anti-dumping measures on brandy imported from the EU starting this week - CNBC. Trade war escalates.
• The US threatens Turkey with disconnection from SWIFT for trading with Russia.