Daily Financial Market Update – September 17, 2024
U.S. Stock Market Performance
On Monday, U.S. equities closed mostly higher. The S&P 500 increased by 0.13%, and the Dow Jones Industrial Average gained 0.55%. However, the Nasdaq saw a decline of 0.52%, driven by weakness in the technology sector, particularly due to soft demand reports for Apple iPhones. A dip in U.S. Treasury yields and the dollar supported the energy and materials sectors, contributing to broader gains.
European Markets Follow Suit
European markets mirrored similar trends, with gains seen in financial and energy stocks. Investors are increasingly anticipating a potential rate cut by the Federal Reserve, which is boosting market optimism ahead of the Fed’s next meeting. Lower interest rates are expected to further strengthen the European energy and financial sectors.
Asia Kicks Off with Positive Movement
Asian equities showed moderate gains on Tuesday. The ASX 200 in Australia rose by 0.3%, while Hong Kong’s Hang Seng Index recovered by 0.9% after prior losses. Japan’s Nikkei 225, however, dropped by 1.7% as a stronger yen weighed down technology stocks. Regional trading volumes were light due to market holidays in China and South Korea.
U.S. and European Markets Outlook
Looking ahead, U.S. and European equities are poised for a cautious rise in early trading, with investors focused on upcoming economic data. Key reports include U.S. retail sales, business inventories, and industrial production, alongside notable speeches from Mario Draghi and Jamie Dimon. These developments are expected to guide market sentiment.
Commodities and Oil Market
Oil prices continued to climb on Tuesday morning, fueled by production disruptions in the U.S. Gulf of Mexico following Hurricane Francine. Anticipation of a Federal Reserve rate cut further boosted the oil market. However, concerns over weakening demand growth in China kept a lid on significant price increases.
Tech Sector Headlines
Apple shares fell nearly 3% on Monday, as analysts cited weaker demand for the new iPhone 16 Pro. Pre-order data indicated shorter shipping times compared to last year, suggesting reduced interest. Nonetheless, some analysts believe that improved supply and gradual AI feature rollouts could boost sales in the coming months.
In contrast, Intel’s shares rose by almost 8% in extended trading following the announcement of a major partnership with Amazon’s AWS for custom AI chips. The company is also implementing cost-cutting measures, including selling a stake in Altera and pausing construction on factories in Germany and Poland, while receiving significant funding from the U.S. CHIPS Act.
Corporate Moves
Microsoft revealed a new $60 billion share buyback program and announced a 10% increase in its quarterly dividend. Despite strong earnings, the company faces growth challenges in its Azure cloud division, partly due to rising capital expenditures on AI development.
Boeing, on the other hand, faces challenges amid a strike involving over 30,000 workers. The company has initiated cost-saving measures, including a hiring freeze and potential employee furloughs, to mitigate the impact on its recovery efforts.
Global Business Developments
UniCredit CEO Andrea Orcel hinted at a potential merger with Commerzbank to strengthen its position in Germany’s banking market, while Daimler Truck announced ambitious plans to have electric trucks make up half of its European sales by 2030, aiming to sell up to 30,000 units.
Financial Services Updates
Barclays analysts rated GE Vernova as “Overweight,” citing strong growth potential. Meanwhile, Evercore ISI expressed optimism about Carvana’s third-quarter performance, driving confidence in its margin improvement strategy.
Industry Outlook and Ratings
Citi Research downgraded MTU Aero Engines to “sell,” predicting slower growth compared to its competitors. Additionally, Goldman Sachs reiterated its bullish outlook on gold, driven by strong central bank demand and an expected Federal Reserve rate cut. Gold prices hit an all-time high of $2,589.6 an ounce, and the bank forecasts gold prices to reach $2,700 an ounce by early 2025.
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