Record Volumes on Wall Street, Morgan Stanley, Google and Stock Events
Market reviews
• Markets got off to a fairly positive start to the week, with China's central bank cutting its 14-day repo rate by 10 basis points, a couple of days after disappointing markets by not cutting longer-term rates. Analysts had warned that the move was merely a follow-up to its earlier cut in the 7-day repo rate, but stocks were happy with anything and rose 0.6%.
• Japan is on holiday, but Nikkei futures are trading 740 points above the cash close. Wall Street and European futures rose 0.2% and 0.6%. The dollar and euro extended gains against the yen after the Bank of Japan governor's dovish comments on Friday. The S&P rose 1% in September, the weakest month on record for stocks, and has gained 19% year to date, hitting an all-time high.
• More than 20 billion shares traded on U.S. exchanges on Friday, the busiest session since January 2021. Bank of America analysts noted that the S&P has gained an average of 21% when the Fed has not seen a recession in the 12 months since it began cutting rates. Markets were still enjoying the effects of the Federal Reserve's half-point rate cut, with futures implying a 50% chance it would take another big move in November.
• At least nine Fed officials are scheduled to speak this week, including prepared remarks from Chairman Jerome Powell, two governors and New York Fed President John Williams. Much will depend on what the Fed's preferred measure of inflation, core consumer spending (PCE), shows on Friday. Analysts expect a 0.2% month-over-month increase, for an annual pace of 2.7%, while the headline index is expected to slow to just 2.3%.
• Apollo Global Management Inc. has offered to invest up to $5 billion in Intel. Intel is likely to reject Qualcomm's offer to buy the entire company.
• Hamster Combat players have already received their tokens. On average, over six months of continuous "taping", users have received less than $50.
Is it even possible to place an order in advance?
• Morgan Stanley faces regulatory scrutiny over a sell order for SK Hynix Inc. shares placed before the company issued a ratings downgrade report, Yonhap News reported, citing unnamed industry sources.
Southwest Airlines warns staff of 'difficult decisions' ahead - Bloomberg The airline is considering changes to its routes and flight schedules in an effort to boost revenue, the report said, citing a transcript of a video message to employees from the airline's CEO.
• Google CEO Sundar Pichai announced a $120 million fund for global AI education. Speaking at the United Nations Future Summit on Saturday, Pichai called AI “the most transformative technology” and announced a new fund for AI education and training around the world.
• The US will propose banning Chinese software and hardware in connected cars - Reuters. The US Commerce Department is expected to announce the proposal on Monday.
• GM will lay off about 1,700 workers at its Kansas plant. A GM spokesman, confirming the layoffs originally reported by Automotive News, said the first of two phases would begin Nov. 18, temporarily affecting 686 full-time workers and laying off 250 temporary workers.
• TSMC and Samsung are considering building large chip factories in the UAE. The total cost of the factories could exceed $100 billion and the project is currently progressing poorly.
• Next week will also see surveys on global manufacturing, US consumer confidence and durable goods.
The Swiss National Bank meets on Thursday and markets are fully pricing in a quarter-point rate cut to 1.0%, with a 41% chance of a 50 basis point cut.
Sweden's central bank meets on Wednesday, where it is also expected to ease the rate by 25 basis points, but again there is a possibility of more.
One bank not easing policy is the Reserve Bank of Australia (RBA), which meets on Tuesday and is seen as almost certain to keep rates at 4.35% as inflation proves stubborn.
Investors are also keeping a wary eye on talks to avert a U.S. government shutdown, with just days left before the current $1.2 trillion in funding expires on Sept. 30. Republican House Speaker Mike Johnson proposed a three-month stopgap funding bill on Sunday, but it now faces a vote.
Key events that could impact markets on Monday:
- Flash PMIs for September for Europe and the U.S., and the Chicago Fed Activity Index.
- Speeches by European Central Bank Governing Board Member Piero Cipollone and ECB Governing Board Member Frank Alderson.
- Speeches by Atlanta Federal Reserve President Raphael Bostic, Chicago Federal Reserve President Austan Goolsbee and Minneapolis Federal Reserve President Neel Kashkari.
International Reviews
• Trump has said that if he loses in 2024, he will likely not run again. Trump will be 82 years old in 2028, older than Biden is now.
• House speaker proposes three-month delay to avoid shutdown. The new bill is expected to come up for a House vote midweek. The new bill eliminates Johnson's proposal that would require people to prove citizenship to register to vote, increasing the bill's chances of success.
• Pope calls for Vatican spending cuts Pope Francis addressed the College of Cardinals, outlining his vision for economic reform that calls for avoiding unnecessary spending.
• The number of refugees in Germany has reached its maximum: a third of them are Ukrainians. Almost 3.5 million refugees live in Germany, which is a historical maximum for the country.
• 'Too late': Trump talks about possibility of another debate with Harris "The problem with another debate is it's too late, the voting's already started," Trump said at a rally in Wilmington, North Carolina.
• China manipulates its data, but it can’t hide unemployment. In 2023, China’s youth unemployment rate hit a record high of 21.3%. Then Beijing stopped publishing the data: China’s National Bureau of Statistics excluded students from its estimates, and by December, the country’s youth unemployment rate had fallen by almost a third.
But even the previous data ignored millions of rural residents who “face far greater difficulties in achieving full employment” than those in cities, Global Counsel reported.
• Marxist Dissanayake wins Sri Lanka's presidential election. The country continues to suffer economic problems and is in debt to the IMF. The new president has already announced his desire to renegotiate the IMF agreement.