Good morning. Happy Friday. Happy Employment Numbers Day.
The Asian/Pacific markets were weak. Hong Kong and India did well, but Japan, China, South Korea, Australia, New Zealand and Indonesia did poorly. Europe, Africa and the Middle East are currently doing well. The UK, Denmark, France, Germany, Greece, the UAE, South Africa, Finland, Switzerland, Spain, Italy, Portugal and the Czech Republic are leading. Index futures in the States point to a relatively big gap up open for the cash market.
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The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up.
Stories/News from Seeking Alpha…
Third time’s a charm?
The strike at Boeing (BA) may soon end after the planemaker made a third attempt to appease workers with a sweetened labor contract. If cleared, Boeing would finally be able to restart work at key production facilities after the strike dragged on for over a month and halted most factory output. The news sent its shares gaining 2% premarket on Friday.
What’s on the table: Boeing has pitched a 38% wage increase over four years, significantly higher than its prior proposal of a 25% increase that workers overwhelmingly rejected. The latest offer doesn’t bring back pensions, but Boeing would instead increase company 401(k) contributions. It would also keep paying yearly bonuses, which were eliminated in the prior offer, and pay $12,000 ratification bonuses. The union will vote on the deal on Monday.
What’s at stake: The strike has cost Boeing an estimated $1B a month, pushing management this week to raise $24B in share sales to stave off a credit downgrade to junk status that would raise its borrowing costs. Boeing’s new CEO Kelly Ortberg has also been streamlining operations and pushing ahead with 17,000 job cuts to preserve cash. Boeing last week reported a $6B loss in Q3, burned through $2B of cash, and expects to burn cash through the next three quarters.
DEI team dismantled: In other news, Boeing has reportedly dismantled its diversity, equity and inclusion department, joining the likes of Tractor Supply (TSCO), Lowe’s (LOW) and Ford (F) in pulling DEI initiatives. Sara Liang Bowen, who led Boeing’s DEI department, stepped down on Thursday. The move comes as large U.S. companies have been facing growing pressure on social media from conservative activists to drop or scale back DEI efforts. (37 comments)
What else is happening…
Nonfarm payrolls growth seen waning due to strike, hurricanes.
Crude oil extends gains on reports of Iran preparing Israel attack.
U.S. sees North Korea troops joining Russia’s war against Ukraine.
Apple (AAPL) earnings: China weakness, conservative forecast.
Amazon (AMZN) results: Hope for holidays, underrated AI potential?
Intel (INTC) soars as guidance impresses, turnaround efforts on track.
World’s 4th most populous country bans Google (GOOG) Pixel sales.
Super Micro (SMCI) shock: Partner Nvidia (NVDA) remains AI king.
Recap of notable auditor resignations from companies in the U.S.
Baby formula case: Abbott, Reckitt (OTCPK:RBGPF) found not liable.
Today’s Economic Calendar
8:30 AM Non-farm payrolls
9:45 AM Fed’s Logan Speech
9:45 AM PMI Manufacturing Index
10:00 AM ISM Manufacturing Index
10:00 AM Construction Spending
1:00 PM Baker Hughes Rig Count
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Good morning. Happy Thursday.
The Asian/Pacific markets leaned down. Japan and Thailand did well; China, Hong Kong, South Korea, India and the Philippines were weak. Europe, Africa and the Middle East are mostly down. Greece and Portugal are up, but the UK, Denmark, Poland, France, Turkey, South Africa, Finland, Switzerland, Norway, the Netherlands and Sweden are down. Index futures in the States point to a big gap down open for the cash market.
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The dollar is down slightly. Oil and copper are up. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
AI splurge looms large
Microsoft (MSFT) and Meta Platforms (META) sailed past analyst expectations with their quarterly earnings reports. But the Big Tech firms’ guidance for more AI spending has investors worried over the results of these heavy investments in the short term. These concerns have dragged their shares nearly 4% before the bell on Thursday.
AI demand vs. capacity: Microsoft easily eclipsed estimates with its Q1 results as its Azure cloud segment crushed expectations. “AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process,” said its CEO Satya Nadella. Shares initially rose after the results, but reversed course after Microsoft forecast slower Azure revenue growth and continued capacity constraints at data centers amid surging demand. It also plans to continue spending heavily on cloud and AI to scale related infrastructure.
All about the money: Meta shares fell despite its Q3 earnings beat, which was tempered by traders’ concerns that heavy technology spending would continue to pressure profits. “We had a good quarter driven by AI progress across our apps and business,” said CEO Mark Zuckerberg. But Meta forecast a “significant acceleration” in spending on AI-related infrastructure in 2025. Zuckerberg acknowledged that this may not be what investors want to hear in the near term, but insisted that the opportunities here “are really big.”
SA commentary: “Microsoft is well positioned to capture market growth opportunity in cloud and AI, thanks to their substantial investments,” said SA analyst Hunter Wolf Research, who continues to expect double-digit revenue and earning growth in the near future. Investing Group Leader Jonathan Weber believes Meta remains an attractive long-term investment, pointing to its rising revenue and cash flows, a fortress balance sheet, and a very reasonable valuation.
Super Micro Computer
Wednesday was a big day for Super Micro Computer (SMCI), which plunged over a third in response to its auditor resigning. It added to the worries of alleged financial reporting and governance issues that have cast shadows on the popular AI stock. Since an all-time high of $122.90 in mid-March, shares are down 73%, finishing yesterday’s session at $33.07. Shares are also dropping again premarket, off another 5% to $31.44.
What’s next for the company? Auditor resignations are rare, but can happen for a range of reasons. In the case of Super Micro (SMCI), Ernst & Young was the second auditor the company had in a span of 18 months. In order to get things back in order, Super Micro will likely need to take action in these areas or otherwise risk suffering the fate of public firms that have found themselves in similar situations.
What else is happening…
SA Election Forum: Recession fears at bay; gold and bitcoin outlook.
PCE report: Fed’s preferred inflation gauge seen edging up.
Samsung flags ‘meaningful’ progress on AI chip supply deal.
Siemens (OTCPK:SIEGY) to buy Altair (ALTR) for $10.6B.
U.K. budget: Reeves boosts top capital gains tax rate to 24%.
Florida inadvertently banned banks from selling securities.
Exxon (XOM) slams California AG lawsuit over plastics recycling.
Hims & Hers (HIMS) slumps as Ozempic no longer in short supply.
Starbucks (SBUX) plans return to neighborhood coffeehouse vibe.
Grammys end 50-year stint with CBS, will move to Disney (DIS).
Today’s Economic Calendar
07:30 AM Challenger Job-Cut Report
08:30 AM Initial Jobless Claims
08:30 AM Personal Income and Outlays
08:30 AM Employment Cost Index
09:45 AM Chicago PMI
10:30 AM EIA Natural Gas Inventory
11:00 AM Treasury Buyback Announcement
02:00 PM Treasury Buyback Results
03:00 PM Farm Prices
04:30 PM Fed Balance Sheet
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Good morning. Happy Wednesday.
The Asian/Pacific markets closed mostly down. Japan and the Philippines did well, but China, Hong Kong, South Korea, Australia, New Zealand, Malaysia, Indonesia and Singapore were weak. Europe, Africa and the Middle East are down a lot. Denmark, Poland, France, Germany, Greece, Spain, the Netherlands, Italy, Austria and Sweden are down more than 1%. Index futures in the States point to a flat open for the cash market.
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The dollar is up. Oil is up; copper is down. Gold is up; silver is down. Bonds are up.
Stories/News from Seeking Alpha…
Tariff wars: EU vs. China
The European Union has raised tariffs on China-made electric vehicles to as high as 45.3% starting Wednesday, after a detailed anti-subsidy investigation that has been criticized by Beijing as well as the broader automaking industry. The tariffs will likely intensify the trade war between the EU and China, although negotiations are expected to continue to reach an amicable solution.
Dig deeper: In addition to the EU’s standard 10% car import duty, EVs made in China will be subject to the following tariff rates: Tesla (TSLA) 7.8%; BYD (OTCPK:BYDDF) 17%; Geely (OTCPK:GELYF) 18.8%; cooperating companies including XPeng (XPEV) and NIO (NIO) 20.7%; state-run SAIC and all other firms 35.3%. The tariffs went into effect a day after they were published in the EU’s Official Journal.
Bigger picture: The additional tariffs were implemented to protect EU automakers from “unfair” competition as Chinese EV makers benefit from state subsidies, allowing them to flood the European market with cheaper cars. It also said China’s spare EV production capacity significantly exceeds demand in China, and the Chinese market is nearly three times the size of the EU market.
China’s response: “China does not agree with or accept the ruling and has filed a lawsuit under the WTO dispute settlement mechanism,” a spokesperson for its commerce ministry said. “We also noticed that the EU side indicated it would continue to negotiate with China on price commitments,” signaling more consultations to “avoid escalation of trade frictions.” China is widely seen to have retaliated by imposing anti-dumping measures on EU brandy imports and investigating EU imports of pork and dairy products.
What else is happening…
JOLTS data: Job openings drop more than expected in September.
Alphabet (GOOG, GOOGL) Q3 earnings: AI spending pays off.
Robotaxi stunner: Waymo crosses 150,000 paid trips a week.
AMD (AMD) Q3 earnings: Here’s why the stock declined.
OpenAI partners with Broadcom, TSMC (TSM) for AI chips.
Elon Musk’s xAI discussing raising funds at $40B valuation.
Musk acknowledges major economic risks of $2T budget cuts.
FDA cites key Novo (NVO) plant that makes Wegovy, Ozempic.
JPMorgan (JPM) sues customers over alleged viral check fraud.
NextEra (NEE) Florida unit seeks bill hike to cover hurricane costs.
Today’s Economic Calendar
07:00 AM MBA Mortgage Applications
08:15 AM ADP Jobs Report
08:30 AM GDP Q3
08:30 AM Treasury Refunding Announcement
10:00 AM Pending Home Sales
10:30 AM EIA Petroleum Inventories
11:00 AM Treasury Buyback Announcement (Preliminary)
11:00 AM Survey of Business Uncertainty
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Good morning. Happy Tuesday.
The Asian/Pacific markets were mixed. Japan and India did well; China, Taiwan and the Philippines were weak. Europe, Africa and the Middle East lean to the upside. Poland, the UAE, Greece and Norway are up; Switzerland is down. Index futures in the States point to a down open for the cash market.
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The dollar is up. Oil and copper are up. Gold and silver are up. Bonds are down.
Stories/News from Seeking Alpha…
Big Tech earnings begin
This week is sure to be a roller-coaster ride for tech investors, with five Magnificent 7 stocks scheduled to report earnings this week. All five companies posting results this week will likely have a major impact on the broader stock market. Recall that the Magnificent 7 accounted for over half of the S&P 500’s (SP500) gain last year.
Results on deck: Alphabet (GOOG, GOOGL) is the first Big Tech firm to announce its results, expected after market close today, amid regulatory scrutiny and intense competition. Meta (META) and Microsoft (MSFT) come next on Wednesday, followed by Amazon (AMZN) and Apple (AAPL) on Thursday. The remaining Magnificent 7 stocks are Tesla (TSLA), which kicked things off on a high note, and Nvidia (NVDA), slated to report next month.
Bigger picture: According to FactSet, four Magnificent 7 stocks are projected to be among the top 10 contributors to S&P 500 earnings growth for Q3 – Nvidia, Alphabet, Amazon and Meta. Interestingly, according to the latest Wall Street Breakfast survey, most respondents see Meta as the biggest beneficiary of earnings.
All about AI: Artificial intelligence and cloud computing will remain in the spotlight as Big Tech spends heavily in these areas. “The debate continues to rage about whether the costs will ultimately be justified, and investors increasingly will ask companies to ‘show me the money’ in coming quarters,” said Schwab Center for Financial Research. Adding to the AI buzz, key chipmaker results will also be out this week – AMD (AMD) on Tuesday and Intel (INTC) on Thursday. (1 comment)
What else is happening…
WSB survey results: Meta (META) seen as biggest beneficiary of earnings.
U.S. finalizes rule curbing AI, chip technology investments in China.
Microsoft (MSFT) accuses Google (GOOG) of shadow campaigns.
Report: OpenAI generates bulk of revenue through subscriptions.
Boeing (BA) upsizes common stock offering, targets raising $21B.
JPMorgan’s Dimon urges banks ‘to fight back’ against regulations.
Talc settlement: DOJ throws wrench into J&J (JNJ) bankruptcy plan.
U.S. said to be running low on RTX-made air missile interceptors.
Crude slammed in biggest one-day percentage drop since mid-2022.
A brief history of MicroStrategy’s (MSTR) climb to reclaim 24-year high.
Today’s Economic Calendar
8:30 AM International Trade in Goods (Advance)
8:30 AM Retail Inventories (Advance)
8:30 AM Wholesale Inventories (Advance)
9:00 AM Case-Shiller Home Price Index
9:00 AM FHFA House Price Index
10:00 AM Consumer Confidence
10:00 AM Job Openings and Labor Turnover Survey
1:00 PM Results of $44B, 7-Year Note Auction
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Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets were mixed. Japan, China, South Korea and India did great; Taiwan, Malaysia, Indonesia and Thailand were weak. Europe, Africa and the Middle East lean to the downside, but most countries are close to unchanged. The UAE is up; Denmark, Norway, the Netherlands and Portugal are down. Index futures in the States point to a moderate gap up open for the cash market.
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The dollar is down. Oil is down big; copper is also down. Gold and silver are down. Bonds are down.
Stories/News from Seeking Alpha…
Oil slides, Japan in flux
An event-packed week has kicked off with global traders on edge, as oil futures and the Japanese yen declined on Monday. Oil futures slid more than 4% as concerns over supply disruptions eased after Israel’s strike on Iran steered clear of oil and nuclear infrastructure. Meanwhile, Japanese Prime Minister Shigeru Ishiba’s coalition lost its parliamentary majority, sending the yen tumbling to a three-month low.
Middle East watch: Israel on Saturday launched airstrikes against Iran in response to Tehran’s retaliatory missile attack earlier this month. The airstrikes, the first time that the Israeli military has openly attacked Iran, targeted aerial capabilities and missile manufacturing facilities. Israeli Prime Minister Benjamin Netanyahu said the strike “achieved all its goals,” while Iranian President Masoud Pezeshkian vowed a “proportionate response.” Local media reported that Iran’s oil industry is operating normally, without any disruption.
“The more targeted response from Israel leaves the door open for de-escalation and the price action in oil this morning suggests the market is of the same view,” said Warren Patterson, commodities strategy head, ING. “Clearly, if we do see some de-escalation, it would allow fundamentals once again to dictate price direction. And with a surplus market over 2025, this would mean oil prices are likely to remain under pressure.”
Over in Japan: The ruling Liberal Democratic Party’s coalition as well as the main opposition party failed to secure the 233 seats required to secure a majority. This marks the first time that LDP lost its majority in 15 years, highlighting the loss of trust among voters amid funding scandals and higher living costs. The yen (USD:JPY) weakened to 153.84 per U.S. dollar, given potentially lengthy negotiations to form a government and risks to the Bank of Japan’s policy normalization. (4 comments)
Today’s Economic Calendar
10:30 AM Dallas Fed Manufacturing Survey
1:00 PM Results of $70B, 5-Year Note Auction
What else is happening…
Big Tech earnings: More optimism for Apple (AAPL), Meta (META).
Boeing (BA) launches nearly $19B stock sale to strengthen liquidity.
Taiwan Semi (TSM) founder: ‘Severe’ challenges from U.S. curbs.
Elon Musk denies report he briefly worked illegally in U.S. in 1990s.
E. coli outbreak: McDonald’s (MCD) confirms beef not to blame.
NextEra Energy (NEE) takes dim view of small modular reactors.
Record rally: Gold’s (XAUUSD:CUR) meteoric rise to $2,700.
Trump says he would replace income tax with tariffs if elected.
SA Asks: Which tech stocks could rise/fall if Harris or Trump wins.
Is the Michigan consumer sentiment indicator now worthless?
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