Wall Street hits record highs as Nvidia bids to topple Apple Inc to become world's most valuable company
Stock market news
• The S&P 500 soared to a record closing high overnight and the Dow Jones Industrial Average rose 43,000 points for the first time, helped by chipmakers after a 2.4% jump in artificial intelligence favorite Nvidia and a strong start to third-quarter earnings season.
• Nvidia shares closed at their highest ever on Monday, pushing its market value to $3.39 trillion — just below Apple's ($3.52 trillion) and above Microsoft's ($3.12 trillion).
• More banking earnings are expected on Tuesday, with Bank of America expected to report a fall in third-quarter profit, Goldman Sachs expected to see higher fees for advisory and underwriting services, and Citigroup and brokerage Charles Schwab also reporting earnings.
• Key for Europe in the jobs and inflation data is the European Central Bank's review of bank lending to the euro zone economy, which should bolster expectations for a policy review on Thursday. The ECB is set to deliver another quarter-point rate cut on Thursday, a move that policymakers were reluctant to mark and traders gave less than a 25% chance when the bank met a month ago.
• Oil prices fell after a briefing by China's Finance Ministry on Saturday offered no new stimulus to boost consumption in the world's largest importer. Brent fell to around $78, while West Texas Intermediate fell below $75. OPEC cut its oil demand forecast for 2024 and 2025 for the third month in a row. The previous forecast was for oil demand around 2 million barrels, while the new forecast is 1.9 million barrels.
• Coinshares reports inflow into crypto products — +$407 million vs. outflow of -$147 million the week before. Average open interest in BTC futures on leading exchanges grew actively in the third quarter. The indicators are now above the average annual levels. There is a high probability that an increase in volatility in the markets is approaching — CryptoQuant. Bitcoin is currently trading above $66,000.
• S&P Global Ratings predicts an increase in the number of defaults on external debt among sovereign issuers over the next decade - Bloomberg.
• Kashkari said "moderate" rate cuts are "likely" in coming quarters. The Minneapolis Fed president joined colleagues in advocating for a gradual pace of rate cuts.
• Firms Boost Currency Hedges Amid Potential Election Volatility: With less than a month to go before Election Day, the U.S. presidential election, which could roil currency markets, is prompting financial executives to beef up their companies' currency hedges.
• Adobe (ADBE) is starting to roll out AI video tools, taking on OpenAI and Meta. Facing much larger competitors, Adobe is betting on creating models trained on data it has the rights to use, ensuring the results can be legally used in commercial work.
• Shares of SoFi Technologies (SOFI) jumped 9% after the online lender announced a $2 billion deal with Fortress Investment Group to expand its lending platform.
Key events that could impact markets on Tuesday:
- Earnings: Bank of America, Goldman Sachs, Charles Schwab, Citi
- Economic data: UK jobs, French CPI, eurozone industrial production, German ZEW economic sentiment, ECB bank lending survey
- Government debt: UK 30-year government bond auction resumes
Fundamental news
• The European Union imposed sanctions for Iran's transfer of missiles and drones to the Russian Federation. Restrictions were imposed on seven people and the same number of organizations involved in the relevant deliveries. Among them are three Iranian airlines, two procurement firms, two companies producing fuel for launching missiles and shells.
• 'This is a warning': China held military exercises off the coast of Taiwan. Chinese troops said the exercises served as a "stern warning to separatist actions by forces fighting for Taiwan independence." Beijing also said the exercise was a legitimate and necessary operation to safeguard state sovereignty and national unity.
• Spanish Prime Minister Pedro Sánchez is again being called to resign over allegations of corruption in his inner circle - Le Figaro. Leaders of the conservative People's Party have called on the prime minister to resign amid allegations from his former confidant, former Development Minister José Ábalos, about corruption in the procurement of masks at the start of the coronavirus pandemic.
• Analysts found that the Czech Republic spent more than €7 billion on Russian oil and gas — more than five times the €1.29 billion it gave in aid to Ukraine — Politico. “The Czech Republic’s dependence on Russian oil actually rose to about 60% in 2023, despite the government’s intention to phase out purchases from Russia. While that figure has since fallen to pre-invasion levels of 50% earlier this year, the report argues there is more than enough spare capacity in the market for Prague to end its reliance on Russia entirely.”
• The United States is ready to negotiate with Russia, China and North Korea without preconditions to reduce the nuclear threat, - US President Joe Biden. The head of the White House yesterday congratulated the winners of the current Nobel Peace Prize - the Japanese organization Nihon Hidankyo, which advocates for a world without nuclear weapons.
• Germany is in a mild recession, with GDP growth expected to be flat through 2024. Analysts forecast a 0.1% contraction in the third quarter.
• Sri Lanka to apply to join BRICS group - The Morning. "Sri Lanka's Foreign Ministry said on Monday that the country would submit a formal application for BRICS membership. The application signals Sri Lanka's intention to strengthen ties with emerging economies and diversify its international relations," the report said.
• PM signals UK will not raise capital gains tax to 39% Keir Starmer says speculation is "not true".
• The debt of the world's 26 poorest countries has reached an 18-year high, according to a new World Bank report. Most of the countries in the study are in sub-Saharan Africa, from Ethiopia to Chad and Congo. Afghanistan and Yemen also made the list. Almost all of these countries export commodities, which exposes them to frequent boom-bust cycles, the World Bank report said.