Markets Await CPI, Goldman Sachs, JPMorgan, BMW Stocks and Other Stock Company Reviews
Market reviews
• Asian markets fell broadly and U.S. stock futures fell. The dollar was a loser as the two candidates sparred on issues including immigration, foreign policy and health care. But there was little discussion of specific policy details in the debates. Online prediction market PredictIt for the 2024 general election showed Trump’s chance of winning fell to 48% from 52%. Harris’ chances rose to 56% from 53%.
• All of this means that investors will remain nervous until the November elections, trying to assess the economic policies of both candidates and figure out which one will ultimately win.
• Market attention now turns to U.S. inflation data due later in the day, although the U.S. central bank has made clear that employment has become more important than inflation. While the Federal Reserve is likely to cut rates next week, there is considerable uncertainty about the size of the cut. Markets are pricing a one-in-three chance of a 50 basis point cut and expect a 114 basis point cut this year.
• Futures pointed to European bourses opening lower as traders are likely to focus on the Fed's actions ahead of a European Central Bank meeting on Thursday where rates are expected to be cut, given the lack of economic data.
• The yen rose to an eight-month high after support from Bank of Japan governor Junko Nakagawa, who reiterated in a speech on Wednesday that the central bank would continue to raise rates if the economy and inflation develop in line with its forecasts.
• The chance of a U.S. recession remains low. Don’t worry about a bear market, says Goldman Sachs. The bank sees both the risk of a bear market and the risk of a recession as relatively low, helped by a healthy private sector and easing central bank policies. Goldman tends to be more bullish on the economy than its Wall Street peers. Last month, the bank’s team of economists cut the chance of a recession to 20% from 25%, citing better-than-expected retail sales data. The bank’s 60/40 portfolio of 60% stocks and 40% bonds has held up well since the summer, but fixed-income assets could be at risk if the Federal Reserve cuts interest rates more aggressively. The bank singled out gold, the Japanese yen and the Swiss franc as other potential hedges.
• Goldman Sachs CEO says bond and currency trading volume is down 10% in the current quarter from a year ago. Shares of Goldman Sachs Group Inc. fell Tuesday after the investment bank reported a roughly $400 million drop in revenue due to a decline in trading activity and a reduction in its private equity portfolio. David Solomon, CEO of Goldman Sachs (GS), said fixed-income and equity trading volume was down about 10% in the third quarter from a “remarkably strong” quarter last year, largely due to lower bond trading volumes.
• JPMorgan Chase (JPM), another DJIA member, fell 4.8%. The stock is on track for its biggest percentage drop since April 12, when it fell 6.47%, according to Dow Jones Market Data. JPMorgan shares are falling as Pinto says analysts are being too optimistic about expenses and net interest income for next year.
• BMW shares fall after recall costs, weak demand in China. The company cut its sales and profit targets, saying costly measures to fix the brake problems and falling demand in the world's biggest car market would hurt net profit. The cost of fixing the brake problem in more than 1.5 million vehicles will be in the high triple-digit millions of euros. A supply halt will also have a negative impact, BMW said. Those factors, as well as weak sales in China, prompted the company to cut its profit and sales forecasts. BMW expects an EBIT margin of 6%-7%, down from a previous 8%-10%.
• Oracle (ORCL) shares are up 12% after earnings. Oracle’s guidance for the current quarter is in line with expectations, and the company may raise its fiscal 2026 guidance. The company is on track to surpass $400 billion in market cap for the first time in its history. Cloud services and a growing number of partnerships drove growth in the latest quarter. Oracle announced a new partnership with Amazon.com Inc. (AMZN), adding to previous agreements with Microsoft Corp. (MSFT) and Alphabet Inc. (GOOG).
• Apple loses lawsuit over $14 billion Irish tax bill Apple and Alphabet’s Google lost their bid to overturn multibillion-dollar court rulings in the European Union on Tuesday, a victory for the bloc’s antitrust regulators in their efforts to clamp down on alleged abuses by big tech companies. The European Court of Justice, the bloc’s highest court, upheld a ruling that ordered Ireland to repay Apple up to 13 billion euros, equivalent to $14.35 billion, plus interest on back taxes. The European Commission, the EU’s executive arm, said in 2016 that Ireland had given Apple benefits in breach of EU state aid rules, allowing the tech giant to pay substantially less tax than it should have. The commission ordered Ireland to repay allegedly unpaid taxes from 2003 to 2014, plus interest. The order was appealed by both Apple and the Irish government.
Google also lost a €2.4 billion antitrust lawsuit in the EU.
• Natural gas prices in Europe have risen as the first cold snap of autumn hits. Experts say that while prices are unusually high for this time of year, they are still vulnerable to recent supply disruptions and geopolitical risks.
• SpaceX has launched a unique private mission into space with non-professional astronauts. The private spacecraft Crew Dragon was launched from Cape Canaveral with four non-professional astronauts. They will fly 1,400 km from Earth - the greatest distance since the flights to the Moon. In addition, on September 12, for the first time in history, non-professionals are scheduled to go into outer space. In total, the mission will last five days.
• After China banned mining in 2021, the US became the world leader in this direction. The US now accounts for 40% of the global mining hashrate.
• Dividends from the world's largest companies rose 5.8% to a record $606 billion in the second quarter, according to research by janushenderson. HSBC, Nestle and China Mobile topped the payout charts.
• Boeing delivered 40 jets in August, five more than a year ago. Boeing has pledged to ramp up production of its best-selling MAX jet to 38 a month by the end of the year. The U.S. planemaker has been slowing down since a door plug exploded in flight on a 737 MAX 9 on Jan. 5, triggering increased regulatory scrutiny. Boeing delivered 32 MAX jets to customers last month, including nine deliveries to China.
• Southwest Airlines chairman resigns along with six directors amid Elliott battle,
a dramatic move after the carrier faced calls for a strategic overhaul from activist Elliott Investment Management.
• The Fed backs down and releases a scaled-back proposal for bank capital requirements. Politicians and the banking industry rejected the original plan, warning it could restrict lending and hurt the economy.
The largest U.S. banks face a 9% capital increase. Stocks fell on the news.
• Volkswagen is tearing up a decades-old pact to guarantee jobs in Germany, union says. SEC Chairman Gensler says better disclosure of crisis could help prevent panic.
• The world's major financial institutions need to be better prepared to tell the public how they will handle a crisis so that lenders, investors, customers and counterparties are less likely to flee if one does occur, according to the top U.S. securities regulator.
Nvidia's Blackwell chip delay raises concerns as stock falls. Nervous Nvidia Corp. investors are eagerly awaiting an update on the launch of its Blackwell chip, hoping for a catalyst to stop the stock's recent slide.
• Yesterday, the Sony PS5 Pro was presented, prices start at $700. Sales will begin on November 7, and pre-orders will be available from September 26. Sony followed Apple's example and decided that the PS5 Pro will be sold without a built-in disc drive, which will need to be purchased separately.
• Mercedes teams up with Factorial to develop solid-state batteries. Mercedes-Benz and US start-up Factorial are working on a solid-state battery that should significantly increase the range of electric vehicles and be ready for production by the end of the decade.
• GME shares fell 10% following the report.
• JPMorgan CEO Jamie Dimon talks succession.
• Deutsche Boerse chairman to step down in 2025 as search begins for successor
• Standard Chartered begins providing digital asset custody services in the UAE.
• Norway's DNB to cut 500 jobs to save costs.
• Bank of America raises minimum hourly wage in the US to $24.
• Investors call on Baloise to shake up business after Cevian collapse
• Abrdn appoints interim chief Jason Windsor as group CEO.
• UK fund houses Schroders and Abrdn appoint new CEOs to reboot flagging fortunes.
• Southwest says Chairman Gary Kelly will step down next year; board backs CEO Jordan
• How Japanese bidder misread US Steel bid policy despite warning signs
• Chinese electric vehicle maker BYD sets higher annual sales target, brokerage report shows
• Pirelli and Bosch to collaborate on smart tire technology.
• UPS to acquire German healthcare logistics company Frigo-Trans.
• Ireland says ECJ ruling in Apple case 'of exceptionally historic significance'
• Former head of Glencore's oil division appears in UK court on bribery charges.
• Search startup Glean announces new funding at $4.6 billion valuation.
• Apple's iPhone 16 faces competition from Huawei's $2,800 phone.
• OpenAI plans to complete Strawberry as part of ChatGPT in two weeks, Information reports.
• Americans used a record 100 trillion megabytes of wireless data in 2023.
• Salesforce expands on-premises cloud platform in Israel.
• Books in, screens out: Some Finnish students are returning to paper after the technological leap.
• Six industrial countries refuse to use AI for military purposes; China is against it.
Key events that could impact markets on Wednesday:
- Economic events: UK GDP estimate for July and UK industrial production and manufacturing for July.
- US Inflation Report.
International Reviews
• Harris and Trump held a televised debate on ABC. The debate began at 4 a.m. Kyiv time and lasted 1 hour and 45 minutes.
Tonight we will see the first results of the polls. Before the debate, Harris and Trump's ratings were almost identical. According to preliminary media estimates, Harris looked a little stronger during the debate. Trump defended himself, accusing the pro-Democratic ABC channel of supporting Harris.
It is highly likely that Harris's rating will increase after the debate compared to Trump's. But there are almost 2 months left until the elections. The most important thing for the Democrats now is to avoid a worsening economy.
• Taylor Swift expressed support for Kamala Harris's candidacy for president after the televised debate.
Some may laugh, but she is an idol for millions.
• Taiwan's exports to the US doubled in August 2024, surpassing exports to China, driven by rising demand for artificial intelligence products.
• “There is no way to enforce commitments”: the UN has admitted its helplessness in front of the Russian Federation. The UN General Assembly has officially acknowledged that it has no influence on Russia. This UN body cannot force Moscow to comply with the organization’s Charter and the requirements of international law.
• Kim Jong-un promised to increase the country's nuclear potential exponentially at a reception to mark the 76th anniversary of the founding of the DPRK. It is assumed that the country's armed forces should be ready to use nuclear potential at any time.
It seems that Russia has helped the DPRK with nuclear weapons.
• Hungarian MOL has concluded new agreements on oil supplies from Russia after Lukoil stopped transiting raw materials.
According to the agreements, from September 9, the specified volumes of oil on the border of Belarus and Ukraine become the property of MOL Group.
In fact, they replaced the owner at the beginning of the pipeline, and now the owner is a European company, and Ukraine can do almost nothing here. Although it does not resist.
• The US and its partners are ready to take serious sanctions against Iran. This is due to the assistance provided to Russia and the transfer of ballistic missiles by Tehran to Moscow, as stated by the Deputy Head of the Press Service of the State Department Vedant Patel.
• The United States will deploy Typhon ground-based medium-range missile systems in Japan.
They were previously banned under the Russian-American Intermediate-Range Nuclear Forces Treaty, The Japan Times reports.
• Israeli Defense Ministry Yoav Galant said that Hamas, as a military entity, no longer exists.
• The median U.S. household income, adjusted for inflation, returned to roughly its 2019 level last year,
following the biggest jump in prices in four decades and a recovery in purchasing power for most Americans. The share of Americans living in poverty also fell slightly last year, to 11.1% from 11.5% in 2022.
• Investigation into Trump's 'quid pro quo' offer to oil giants halted:
The largest U.S. oil and gas companies are not cooperating with a congressional investigation into whether Republican presidential candidate Donald Trump made a quid pro quo offer to roll back environmental regulations in exchange for campaign contributions.
• France's central bank sees a boost to growth in the third quarter from the Olympics. However, the country's political crisis still clouds the economic outlook, the central bank said.