Stock reviews for the last few days, Fed rates, inflation, reports, corporate and international news

Market Reviews

• Optimism over a looming U.S. interest rate cut was tempered by nervousness about what economic data will show in coming weeks, elevated earnings expectations for artificial intelligence bellwether Nvidia and rising tensions in the Middle East. That has left markets jittery and taking a breather, with the yen hovering near three-week highs, the dollar steady but near 13-month lows and Asian shares falling 0.42% on Tuesday after hitting their highest in a month on Monday.

• Oil prices eased after rising sharply in the previous session due to supply concerns, while gold traded near last week's record high amid safe-haven flows. Futures indicate European stock markets will also open subdued, with London shares making a comeback after the weekend.

• Investors are looking to key economic data this week, including EU inflation data on Friday, for signals on the policy of the European Central Bank, which meets on September 12, where traders have broadly priced in a 25 basis point interest rate cut .

 • Nvidia's earnings release Wednesday will set the tone for a potential AI rally and increased risk appetite now as markets brace for rate cuts. Anything short of a stunning growth forecast will likely undermine investor confidence, but until then markets will be jittery and volatile. Europe's tech shares will be in focus after the tech index .SX8P, opening a new tab, fell 1% on Monday. Another thing to watch will be how European markets react to weak earnings from Temu owner PDD Holdings (PDD.O), which highlights weak demand from Chinese consumers resulting in a $55 billion drop in market capitalization. European luxury goods companies have also been hit by Chinese consumers' spending cuts.

• The US consumer price index, the Fed's preferred measure of inflation, is due to be released on Friday and will come under scrutiny, especially after Fed Chairman Jerome Powell all but confirmed a rate cut in September. Markets are only concerned about the size of the cut - whether it will be a 25 basis point cut or a 50 basis point cut next month. Traders are pricing in 100 basis points of easing for the Fed's remaining three meetings this year. The data will determine where the Fed heads.

• Texas scientists have developed an AI that predicted 70% of earthquakes in China a week before they started. If this system is perfected, it will be possible to significantly reduce losses from earthquakes in the future.

• IKEA will launch a platform for second-hand goods to compete with eBay. Furniture and home goods chain IKEA plans to launch a Preowned platform for selling pre-owned goods.

• Chinese AI engineers secretly gain access to banned Nvidia chips - WSJ. Brokers provide foreign computing power and offer a high level of anonymity. China's big tech companies are doubling their spending on AI. Despite US restrictions - FT.

• Uber was fined $324 million for allegedly transferring data about its drivers to the United States, the Associated Press reports. The company received a fine from the Dutch Data Protection Authority. Uber called the decision erroneous and unjustified and said it would appeal, the agency notes.

• Global defense giants expect a doubling of the flow of orders, writes FT, citing calculations by Vertical Research Partners. The top 15 defense contractors forecast free cash flow of $52 billion in 2026, nearly double the level at the end of 2021. The five largest U.S. defense contractors expect cash flow of $26 billion by the end of 2026, more than double 2021 levels.

• Canada, following the United States and the EU, will introduce tariffs on electric vehicles from China. The country is taking this step to protect domestic producers.
We are talking about plans to introduce a 100% tax on electric vehicles from China, as well as 25% on Chinese-made steel and aluminum.
The share of the yuan in international payments reached almost 5% in July.

• The yuan ranked fourth in terms of international payments volume with a share of 4.75% in July 2024. This is by 0.13 p.p. more than in June.
The dollar confidently holds first place in the statistics, its volume amounted to 47.81% in July, having increased by 0.73 percentage points over the month.
In second place is the euro - 22.47%, in third - the pound sterling with a share of 7%.

• Oil rose after Libya's government said it would halt exports amid tensions in the Middle East.
Israeli strikes on Hezbollah targets in southern Lebanon have raised fears of a wider conflict.

• Icahn Enterprises will sell up to $400 million of shares. It intends to use any net proceeds from the offering to fund potential acquisitions and for company purposes. Icahn Enterprises is still in conflict with short seller Hindenburg Research, which last year accused Icahn of using a "Ponzi-like" scheme to pay dividends.

• Could JPMorgan Chase use food delivery to boost card payments? The largest U.S. issuer has added consumer benefits to its partnership with DoorDash as it seeks to expand the relationship in its payments business.

• During the period from August 19 to 24, 2024, the influx of capital into crypto funds increased to $533 million, with a trading volume of $9 billion. Experts noted that this was the largest influx in the last five weeks. They also explained that the sharp increase can be caused by the statements of the head of the US Federal Reserve, Jerome Powell.

• Shares in Temu owner PDD fell the most since 2022 after warning of slowing sales. Revenue growth is bound to decline, highlighting the challenges of maintaining growth momentum against aggressive rivals such as ByteDance.

• IBM is closing its China research group, affecting fewer than 1,000 employees. Partially due to geopolitical tensions between the world's two largest economies.

• Qatar signed a new 15-year agreement with Kuwait on the supply of liquefied natural gas. This is the second supply contract that will help relieve pressure on power plants that were already forced to cut production this summer.

• ChatGPT developer OpenAI supports California's artificial content labeling bill. It requires tech companies to label AI-generated content, which can range from harmless memes to deep fakes.

• Exxon Mobil Corp. predicts that global oil demand in 2050 will be the same - or even slightly higher - than now,
making efforts to achieve net-zero carbon emissions by mid-century unattainable.

• Police are starting to use AI chatbots to write crime reports. Will they acquit themselves in court - AP. The chest camera records every word and other noises during the work process. Based on all the sounds and radio communications picked up by the microphone attached to the chest camera, the AI ​​tool writes a complete and detailed report.

• Lowe's (L) is the latest company to abandon its diversity plans. Amid growing legal problems in the corporate world and pressure from conservatives.

• Apple (AAPL) will present the new AI iPhones on September 9th. The new AI updates will only be available to owners of the iPhone 15 Pro, Pro Max, or future models.

• The 10-year yield of 3.79% is just 10 basis points below the two-year, and it may not be long before the curve turns truly positive. Indeed, it is surprising that this has not happened already, especially given the scale of Treasury issuance, and it suggests that something else is holding back long-term bond yields.

• Time is also running out for the inverted curve to predict a recession, although the Atlanta Federal Reserve Bank's GDPNow measure slowed to 2.0% year over year from 2.4% mid-month. Friday's real consumer spending data will help refine that figure and could prove more important than the core PCE deflator given Powell's focus on growth and employment.

• Preliminary estimates of EU inflation will also be published on Friday, and analysts believe they will be favorable enough for the ECB to cut rates as expected on September 19.

• The other main event of the week will be Nvidia's results on Wednesday, where the company will have to significantly beat consensus estimates to justify its sky-high P/E ratio of 37 future earnings.

• Markets are expecting $28.8 billion in sales and Q3 guidance of about $32 billion, and it will have to beat that by at least a couple billion. Options imply there is likely to be a move of 9% or more following the results, which is a serious amount of cash given that its market capitalization is nearly $3.2 trillion. 

• Trump launches a cryptocurrency platform called The DeFiant Ones. On his Truth Social, Trump noted that “ordinary Americans have been pressured by big banks and the financial elite,” but did not provide any additional details about what exactly The DeFiant Ones are, how it works, or how it will help people.

• Bank of China President Liu Jin resigns. Bank of China Vice Chairman and President Liu Jin resigned for personal reasons effective Sunday, the bank said.

• Chinese Sinopec increased its net profit for the first half of the year by 2.6%. Rising oil prices helped boost revenues. China Petroleum & Chemical Corp, as Sinopec is formally known, on Sunday reported a net profit of 37.1 billion yuan ($5.21 billion) for the January-June period.

• Trials of an mRNA vaccine against lung cancer have begun in 7 countries, - The Guardian. The purpose of the injection is to “teach” the immune system to recognize and destroy cancer cells, as well as prevent recurrence.

• Fed Chairman Powell signals that weak employment data in August could lead to a 0.5% rate cut - marketwatch. 

• Bond trades warranted as Powell announced Fed rate cut in September - Bloomberg. A big bet by US bond investors is paying off after Federal Reserve Chairman Jerome Powell cemented expectations for an interest rate cut next month. We also offered. Congratulations to those who made it!

• Apple will allow users to delete the App Store. Apple intends to give iPhone and iPad owners in Europe the ability to remove pre-installed apps such as the App Store and Safari by the end of the year to comply with EU Digital Markets Act requirements. 

Apple will unveil the new iPhone on September 10 - Bloomberg

• The Fed's ownership of mortgage bonds plays a "central" role in how monetary policy affects economic dynamics,
the scientists wrote in a paper presented at the central bank's research conference on Saturday.
The article analyzes how the Fed uses increases and decreases in its holdings of Treasuries and mortgage bonds to leverage the changes it makes to its interest rate target, which together are intended to influence economic dynamics.
Quantitative Easing (QE): Since the beginning of 2020, as part of quantitative easing, the Fed has significantly increased its holdings, including bonds, causing total assets to rise to $9 trillion in the summer of 2022.
Effects of mortgage bond purchases: The authors estimate that mortgage bond purchases by the Fed and banks contributed to a 40 basis point decline in mortgage rates in 2020/21, leading to a significant increase in new mortgage lending and residential property investment.
Quantitative Tightness (QT): The Fed's asset tapering process continues, but the pace of the process is slowing due to weak housing market activity.
Possible heavy selling of mortgage bonds: Due to the slowdown in the housing market, the Fed may consider aggressive selling of mortgage bonds to reduce its holdings to its desired level.

• Startups in general still face strong headwinds when it comes to raising venture capital funding.
The second quarter was only a slight improvement from the previous two quarters' worst performance, according to Crunchbase. But this does not apply to AI. In the US, artificial intelligence accounts for about 30 deals worth more than $100 million in 2024, making it the global leader at the moment.

• Cathie Wood is taking $6 million out of Zoom Video Communications. Its innovation ETF is down 4% this year.

• OpenAI hires former Meta executive Irina Kofman to lead strategic initiatives. Continuing to fill its staff with big tech veterans.

• Kraken is set to face an SEC lawsuit over its crypto exchange registration. The SEC accuses her of operating an unregistered securities exchange, the judge ruled.

• Biggest FX Short Bet Against Canadian Dollar Rally - Bloomberg. Traders are sticking to their near-record bets against the loonie, betting the Canadian economy will slow quickly.

• Hedge funds increase bullish bets on gold - Bloomberg. Bullish gold rates jumped to their highest level in four years amid expectations of earlier and deeper monetary easing by the Federal Reserve to support the economy.

• TikToker caused a cucumber shortage in Iceland. A popular blogger inspired people to make cucumber salads. As a result, cucumbers disappeared from stores in Iceland.

• The next big thing for the market will be Nvidia's earnings report on Wednesday afternoon.
And it's not just Nvidia stock on the line: Nvidia's results will set the pace for other players in the AI ​​market. Salesforce (CRM), Best Buy (BBY), Dell (DELL) and Lululemon (LULU) will also be in focus, while the Fed's key inflation index will shape the economic calendar.

International reviews

• Germany Ifo Business Climate Index fell less than expected. 
87.0 to 86.6 (expected 86.0)
Durable Goods Orders surged
US Durable Goods Orders +9.9% (expected +4.0%)
US business equipment spending shows signs of cooling in July
New orders for key US-made capital goods unexpectedly fell in July , and the previous month's data was revised lower, reflecting a loss of momentum in business equipment spending that continued into the early third quarter.

• Kamala Harris and her vice presidential candidate Tim Walz have raised $540 million in donations. Moreover, they crossed the half-billion mark on August 22 - shortly before US Vice President Harris officially agreed to be nominated as a presidential candidate.

French government websites were subject to DDoS attacks after the arrest of Pavel Durov - Le Parisien. The targets of the attack were, in particular, the website of the National Agency for the Safety of Medicines and Medical Products and the government website that publishes laws and regulations, as well as other resources.

• Trump confirmed that he is ready to offer Elon Musk a place in the US government if he wins the election. I would include him in the government, but I don't know how he could keep up, given the amount of things he does. But he could advise on some issues.

• NASA turns to Elon Musk's SpaceX. To return stranded astronauts to Earth - FT.

• The US failed to curb the Houthis in the Red Sea - The Telegraph. The coalition's Operation Prosperity Guardian (OPG), which was launched in December 2023 in response to Houthi attacks on commercial shipping in the southern Red Sea, has not worked, according to journalists.

• Frozen Russian assets are intended to save Ukraine, not the German federal budget. The $50 billion loan planned by international partners for Ukraine should come in addition to existing bilateral military assistance from Germany, and not in place of it.
Michael Roth, chairman of the Bundestag Foreign Affairs Committee and a Social Democrat from Scholz's party, wrote about this in his column for Die Welt.

• The Russian Federation planned to attack a NATO base in Germany with drones, where AWACS aircraft are stationed, - DPA. 14 Boeing E-3A Airborne Warning & Control System (AWACS) aircraft are based at Gelsenkirchen airfield. Last week, NATO increased security at the base due to a "credible threat" and sent its staff home as a precaution. Both at the airfield and at NATO headquarters in Brussels, speculation about UAV flights was rejected.

• Poland will allocate €1 billion for the construction of the first nuclear power plant. According to Polish Finance Minister Andrzej Domanski, the country needs to find “new engines of economic growth.”

• In Australia you can now officially ignore your boss after work - The Guardian. Now you don’t need to answer any calls or messages. If the boss threatens to fire him for doing this, he could be fined up to A$93,900.

• German business sentiment falls in August, delaying hopes of recovery - Reuters. Business sentiment in Germany fell for a third month in a row in August, a survey showed on Monday, setting aside hopes for a recovery in Europe's largest economy.

• India, following France, is investigating Telegram and, depending on the results, may even ban it - local media

TON dropped out of the top 10 cryptocurrencies by capitalization, falling by 20% over the past 24 hours. Against the backdrop of Durov's arrest. Pavel Durov will remain in pre-trial detention and will not be released on bail or under conditions such as house arrest or surrender of his passport, due to the threat of escape. The investigating judge needs time to collect evidence, interview witnesses and conduct searches.
In the Russian Federation, mass hysteria and panic after the detention of Pavel Durov

The Russian Federation sent a note demanding access to Durov, but Paris perceives his French citizenship as primary, Zakharova said.
Russian officials have been instructed to delete official correspondence on Telegram.
Many Russian officials spoke out. The situation was even called an “Attack on Russia.” Which is surprising, considering that Durov renounced Russian citizenship a very long time ago. Information has emerged that Pavel still has his Russian passport.
The military officers are in panic. They are perplexed how it happened that the Russian army does not have its own means of communication and the front is based on Telegram.

Pavel Durov was detained by French intelligence services at Paris Le Bourget airport upon exiting his private jet
Pavel Durov is a French citizen. The French authorities may charge him with violating sanctions regarding contacts with the Russian Federation and dubious transactions. The main complaint against Telegram and Durov personally is the encrypted messages in the messenger.
Durov was put on the wanted list minutes before he landed for refueling in Paris.
The arrest and search warrant was issued because Durov did not cooperate with French security forces, which makes him an accomplice in drug trafficking and other serious crimes.
“For many years this has become the number 1 platform for organized crime,” a representative of the French investigation. The main charge is the exchange of child porn content.
The founder of Telegram faces 20 years in prison in France.
// Durov was in Baku on the same days when Putin was there. Putin allegedly refused to meet with Durov. But who knows how it really was. And recently, Russian intelligence services have been actively attacking EU cyberspace. Perhaps this is all connected with the arrest of Durov.

• A fund linked to Russian oligarchs Aven and Moshkovich helped Musk buy Twitter. In 2022, Elon Musk bought Twitter for more than $44 billion. One of the investors who gave money to Musk is the venture capital fund 8VC. The sons of Russian oligarchs Vadim Moshkovich and Pyotr Aven work in this fund. According to 8VC founder Joe Lonsdale, the sons of Russian oligarchs are close friends, and Moshkovich brought Aven to the fund. Joe Lonsdale, commenting on the work of Aven and Moshkovich at 8VC, notes that they are professionals in their field and are not associated with their parents’ business in Russia.

• China plans to urge the US to refrain from interfering in conflicts in the South China Sea and put forward a number of demands regarding Taiwan. “China’s territorial sovereignty, maritime rights and interests in the South China Sea have sufficient historical and legal basis [...] Outside countries should not take any actions that could provoke a conflict or aggravate the situation,” a Chinese Foreign Ministry spokesman said ahead of the adviser’s visit US National Security Secretary Jake Sullivan to China, where he will meet with country officials.

• Israel prevented a major Hezbollah attack on the Jewish state. As a result, the damage due to the night attack from Lebanon is minimal.
In Egypt, ceasefire negotiations between Israel and Hamas were to take place on August 25.
The negotiations were to take place through the mediation of three countries: the United States, Qatar and Egypt. The main goal of the negotiations is to resolve differences between Israel and Hamas.
Hamas terrorists will not be directly involved in Sunday's negotiations; they will receive information about their progress from Egypt and Qatar.

• Georgia's ruling pro-Russian Georgian Dream party has promised to outlaw almost all opposition parties if it wins the parliamentary elections on October 26 - Politico.
This came days after Georgian Dream threatened to dissolve the largest opposition party in parliament, the United National Movement, founded by Saakashvili.

• The war in Ukraine is killing hopes in the “diamond city” of India. The Indian “diamond city” of Surat is experiencing a severe financial crisis caused by the Russian invasion of Ukraine. Many local cutting and cutting workers have lost their jobs and are struggling to make ends meet. The number of suicides in the city is increasing.
The fact is that in March 2022, the European Union and G7 countries banned the import of Russian diamonds through third countries, seriously limiting access to key raw materials used by the Indian diamond industry. More than 30% of raw materials in India were supplied from the mines of the Russian company Alrosa. As a result, India lost almost a third of its diamond sales, and its three largest clients - the USA, China and the UAE - significantly reduced their purchases.

• USA: The Red Sea faces disaster due to an attack by the Houthis. The shelling of the MV Sounion oil tanker off the coast of Yemen by Iranian-backed Houthi rebels could cause a million barrels of oil to leak into the Red Sea, US State Department spokesman Matthew Miller said. The tanker's crew has been evacuated, but "the Houthis appear determined to sink the ship and its cargo at sea," the US agency said.