Global Market Update: September 23, 2024
U.S. Market Performance
Last Friday, U.S. markets wrapped up a record-breaking week with a subdued close. The S&P 500 dipped 0.19%, while the Nasdaq fell 0.36%. However, the Dow Jones ended with a slight 0.09% gain. Despite mixed earnings reports from FedEx and Intel, all three major indices saw weekly gains of over 1%. The 10-year Treasury yield also eased to 3.73%.
Key Takeaway:
- S&P 500: -0.19%
- Nasdaq: -0.36%
- Dow Jones: +0.09%
- 10-year Treasury yield: 3.73%
European Markets
European markets experienced modest growth, buoyed by the Federal Reserve’s 50-basis-point rate cut aimed at controlling inflation. This action signalled a more dovish approach by the Fed, contributing to stability in the region.
Asian Market Movements
Asian markets started the week on a positive note, driven by optimism over potential interest rate cuts:
- Chinese equities gained as the People’s Bank of China cut a short-term lending rate.
- Australia’s ASX 200 lagged behind, with major retailers facing sharp declines amid antitrust concerns.
- Japan’s markets were closed due to a public holiday.
Oil Market Update
Oil prices increased on Monday morning, driven by several factors:
- Rising tensions in the Middle East.
- Supply disruptions from Hurricane Francine.
- Continued conflicts in Gaza and Lebanon, raising concerns over further disruptions from the oil-rich region.
Mergers & Acquisitions: Qualcomm and Intel
Qualcomm has approached Intel regarding a potential acquisition. Talks are still in their early stages, with no formal offer on the table. The deal could face regulatory hurdles, and Qualcomm may need to divest parts of Intel to clear approvals.
Key Corporate Updates
- Constellation Energy surged over 22% after announcing a power purchase agreement with Microsoft to relaunch the Three Mile Island Unit 1 as the newly renamed Crane Clean Energy Center, adding 835 megawatts to the grid and creating 3,400 jobs by 2028.
- Mercedes-Benz lowered its full-year profit margin expectations for 2024 due to weakening demand in the Chinese market. This marks the second time in two months that the company has adjusted its outlook.
- Nike shares rose 8% following the appointment of new CEO Elliott Hill, signaling a shift back to retailer relationships after the previous direct-to-consumer focus.
Analyst Insights and Ratings
- Morgan Stanley downgraded its earnings estimates for ASML, citing weakness in the memory chip market.
- Evercore ISI raised its price target for Amazon from $225 to $240, driven by strong growth projections for Prime Video.
Regulatory Action: Woolworths and Coles
Australia’s competition watchdog has sued supermarket giants Woolworths and Coles, accusing them of deceptive practices related to price hikes and false advertising of discounts. The lawsuit comes amid a cost-of-living crisis in Australia, and penalties could reach up to A$50 million.
Upcoming Market Signals
Both European and U.S. equity markets are expected to open steady, with investors closely monitoring upcoming Federal Reserve signals and inflation data to guide future decisions.
Conclusion
Global markets are navigating a mix of corporate earnings, geopolitical tensions, and economic policy changes. Investors remain focused on inflation data and central bank actions, while corporate mergers and lawsuits could significantly impact key sectors in the coming weeks.
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