Recovery of stock indices and markets after a fall, corporate and financial news
Market Reviews
• Markets started the week with a day of consolidation following their best week of the year on expectations of more than a soft landing for the US economy, or no landing at all, as many analysts expect it to continue to grow 2-3%. S&P 500 and Nasdaq futures are ahead by 0.2% or so, while the Nikkei is flat, up nearly 9% last week. The euro held above $1.1000 and the pound sterling hit its highest level in a month at $1.2953.
• Federal Reserve members Mary Daly and Austan Goolsbee over the weekend raised the possibility of monetary easing in September, while minutes from the latest policy meeting, due to be released on Wednesday, should underscore the dovish outlook.
• Futures are 100% priced for a quarter-point decline and 26% for a 50-basis-point decline, with the big odds depending on whether the next US jobs report shows the jump widely expected.
• Goldman Sachs noted that its annual reanalysis of payroll data is due Wednesday and could show a downward revision of between 600,000 and 1 million jobs, although it argues that is an exaggeration of labor market weakness.
• Fed Chairman Jerome Powell wraps up the week with a speech in Jackson Hole on Friday, and markets are clearly dovish, although not a half-point of monetary easing.
• A report on consumer prices in Japan may revive talk of a rate hike by the Bank of Japan, which has largely died out after the recent decline in the Nikkei index. Markets have priced in just 2 basis points of Japanese policy tightening in October, although some analysts are still forecasting a 25 basis point rise to 0.5%.
• South Korean artificial intelligence chip makers Rebellions Inc and Sapeon Korea Inc have signed a definitive merger agreement - Reuters. They announced merger talks in June. The deal is an attempt by South Korean companies to challenge global leaders in artificial intelligence chips such as Nvidia.
• Stocks had their best week in 2024. Fresh economic data helped ease fears of a recession. For the week, the S&P 500 jumped nearly 4% and the Nasdaq Composite soared more than 5.2%. Meanwhile, the Dow Jones Industrial Average rose nearly 3%.
• Mastercard MA will cut about 1 thousand employees, Bloomberg reports. The corporation's staff was 33,400 people at the end of 2023, 67% of them worked outside the United States, the agency clarifies.
• A resident of Lithuania robbed Google and Facebook of $122 million by sending them fake invoices for payment. The companies didn’t even figure out who was sending them, and simply sent money using the specified details. Now the man will go to prison for 5 years, but only $72 million was seized from the stolen funds.
• Starbucks sued again for allegedly stealing concept - Reuters. Starbucks has been sued for the third time by the company, which accuses the coffee chain of stealing its coffee-flavored lipstick and lip gloss concept.
• Nike records longest growth streak in 8 years - Bloomberg. Hit in late June by a weak sales outlook, Nike shares just recorded their longest streak of gains in eight years, boosted by a stream of positive developments. The stock rose 17% in nine days, outperforming the S&P 500 by about 10 percentage points, as the market recovered from its worst decline in two years on Aug. 5.
• At the end of July, the crypto market experienced significant difficulties, with most major tokens falling by double-digit percentages. This is the latest leg in a broader downward trend that began on July 29th. Since then, the total market capitalization of cryptocurrencies has fallen from $2.48 trillion to the current level of $1.76 trillion, a decline of 28% in a week.
• S&P upgraded Uber to investment grade due to earnings growth. S&P Global Ratings upgraded Uber Technologies' credit ratings to investment grade on Friday, citing the ride-hailing and food delivery company's solid earnings growth.
• Media platform X said it would close its operations in Brazil “with immediate effect” Sao Paulo. Media platform X said on Saturday it was shutting down its operations in Brazil "with immediate effect" due to what it called "censorship orders" from Brazilian judge Alexandre de Moraes. X claims that Moraes secretly threatened one of her legal representatives.
• A possible work stoppage at Canada's two largest railroads could disrupt the U.S. supply chain next week.
A labor dispute with the Teamsters union threatens to lead to lockouts or strikes that could disrupt cross-border trade with the United States. The shutdown is expected to last only a few days, but if it lasts longer there could be major supply chain disruptions.
• Next week the market's attention will be focused on the Fed. Chairman Jerome Powell will speak Friday morning at a symposium in Jackson Hawley. Investors will be listening closely for hints about when and by how much the Fed plans to cut interest rates in 2024.
• On the corporate side, the focus will remain on retail earnings reports, with announcements expected from Lowe's (LOW), Target (TGT), Macy's (M), TJX (TJX) and BJ's (BJ).
Key events that could affect markets on Monday:
- The Riksbank begins a two-day monetary policy meeting. Markets have fully laid the groundwork for the Riksbank's interest rate cut on Tuesday, and the only question remains whether it will be cut by 25 basis points or 50 basis points.
- The head of the central bank of Finland and member of the governing council of the ECB, Olli Rehn, speaks in New York.
- Speech by Federal Reserve Board Chairman Christopher Waller.
International reviews
• The Democratic National Convention kicks off on Monday. According to betting site PredictIt, Vice President Kamala Harris has odds of 58 cents to win, while Donald Trump has odds of 45 cents. That's the exact opposite of the numbers before President Joe Biden left.
• There is a total blackout in Lebanon due to lack of fuel. The power plant in Zahran in southern Lebanon stopped working due to the complete depletion of fuel reserves in storage facilities, the country's state agency National News Agency reported. It remained the last operating power plant in Lebanon.
• Mass rallies against Nicolas Maduro took place in Venezuela. Thousands of people protested in Caracas and other cities across the country following the disputed presidential elections. In the capital, the rally was attended by opposition leader Maria Corina Machado, who had previously been in hiding for a long time, fearing arrest.
• Monkeypox virus continues to spread in Africa. Over the past week alone, 1,200 cases of infection with the mpox virus infection have been recorded, reports the African Union medical agency. We are talking about three different subtypes of the virus, including the dangerous variant Clade 1b. In total, since the beginning of the year, in 12 countries that are members of the AU, 18,737 people have been infected with monkeypox, and 541 patients have died. The virus continues to spread, and the EU has raised the threat level from low to moderate.
• 14,000 people in the UK have applied for government payments for potential harm caused by COVID-19 vaccinations - The Telegraph. 97% of successful claims involve the AstraZeneca vaccine, with only a few cases involving Pfizer or Moderna. One-off compensation of £120,000 has already been awarded to 175 victims for side effects such as stroke, heart attack, dangerous blood clots, inflammation of the spinal cord, excessive swelling of the vaccinated limb and facial paralysis.
• Donald Trump, if he wins the election, wants to use the army to maintain law and order, including patrolling the border, suppressing protests and fighting crime in large cities, writes The New York Times. Trump's allies worked on documents justifying these actions. Publicly they talked about the US military in the context of migration, but privately they are also considering the option of combating unrest during protests.
• Donald Trump made more than $7 million from NFTs. Former US President Donald Trump owns cryptocurrencies worth up to $5 million and has earned more than $7 million from investments in NFTs. According to a document published by the non-profit organization Citizens for Responsibility and Ethics in Washington (CREW), the politician stores Ethereum-based crypto assets worth from $1- 3 million.
The Republican presidential candidate also reported receiving ~$7.16 million in royalties from three of his own collections of immutable tokens.
• Tusk shamed adherents of the investigation into the Nord Stream bombing. “To all the initiators and patrons of Nord Stream 1 and Nord Stream 2.”
The only thing you have to do today is apologize and sit quietly,” the Polish Prime Minister advised.
• Serbia expects to extend the agreement on Russian gas supplies. The French far-left party France Unconquered is threatening President Emmanuel Macron with impeachment. Accusing him of an “institutional coup against democracy” for refusing to “accept” the results of parliamentary elections in July. This is stated in the publication of representatives of “Unconquered France” in the newspaper La Tribune.
• China was not invited to the India-hosted Voice of the Global South virtual summit. Indian Foreign Minister Jaishankar: “The question was whether China was present, the answer is no. Were they invited, the answer is no.” Jaishankar said that a total of 123 countries participated in the online summit.
• "Boomerang" of ageism: jokes about Joe Biden's age return to Donald Trump from the younger Kamala Harris, - Politico. Donald Trump, 78, has spent months portraying Joe Biden, 81, as “an old man who can’t be trusted with the future of the country.” Now Democrats are trying to convince voters that Trump is a “relic of the past” that the United States cannot return to.
• US President Joe Biden wants a Gaza ceasefire deal in place by the end of next week, writes Axios
Strategist who ran DeSantis' failed campaign is working with Musk to help organize voters for Trump - AP.