⚡️Indices Have Stabilized After The Fed Cut The Rate By Half A Point

🕯Key US stock indexes were little changed after the Federal Reserve cut interest rates by half a percentage point. This significant decline has raised questions about the economy's potential weakness in the future.

📊The Dow Jones Industrial Average rose more than 375 points but then pared that gain, ending up 0.21%. The S&P 500 fell 0.1% and the Nasdaq Composite fell 0.06%. Initially, both indexes, including the 30-share Dow, reached new all-time highs after the Fed's decision was announced.

ℹ️The Fed cut rates to a range of 4.75%-5% from 5.25%-5.5%. The scale of the decline matched traders' expectations, according to the CME Group's FedWatch tool. This is the first rate cut in four years, as inflation levels decline from two years ago.

🟢FOMC has increased confidence that inflation is moving steadily toward 2 percent and believes that the risks to achieving employment and inflation goals are roughly balanced. Optimism cooled slightly after Powell said a larger rate cut did not mean a continuation of aggressive policy, noting that the central bank would "tread carefully."

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🇮🇳India Overtakes China In Key MSCI Stock Index For The First Time In History

👑India overtook China for the first time in MSCI's key equity index, helped by robust economic growth and strong investment flows. India's weight in the MSCI Investable Market Indexes (covering all large-, mid- and small-cap investment securities) rose to 2.35%, while China's weight stood at 2.24%, according to a note from Morgan Stanley.

📈India's nominal gross domestic product growth rate is in the 10% range, more than three times China's economic growth and creating deep divergence in income growth, experts say.

➡️Earlier this month, Morgan Stanley forecast that India would overtake China in the MSCI Emerging Markets Index as India's stock market rally just crossed the midpoint.

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🇩🇪Investors' Confidence In German Economy Plummets After A Wave Of Bad News

📉In September, the index of investor confidence (ZEW) in the German economy fell to its lowest level since October 2023 and amounted to 3.6 points. At the same time, in August ZEW was at 19.2 points. While the decline in economic expectations in the eurozone indicates an overall increase in pessimistic sentiment, the decline in expectations for the German economy is significantly higher

⚠️The outlook for Europe's largest economy worsened after output contracted unexpectedly in the second quarter of 2024 amid weak industrial performance. In addition, Germany's economic outlook has been hit by a spate of bad news over the past few weeks.

ℹ️Thus, the large German automaker Volkswagen plans to announce the closure of 2-3 factories in the country and lay off up to 15,000 employees. Another car maker BMW cut its profit forecast for 2024 due to the recall of 1.5 million cars due to identified faults in the brake system. And the American Intel postponed the construction of a chip production plant in Germany for about 2 years.

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⚡️US Retail Sales Rose Unexpectedly In August

📈US retail sales unexpectedly rose in August, despite lower auto dealership revenue, thanks to increased online shopping. This indicates the stability of the US economy in the third quarter

🔼Retail sales rose 0.1% in August, following a revised 1.1% rise in July. Economists had forecast a decline of 0.2% after 1% in July. Year-on-year sales grew 2.1%. Online sales increased 1.4% in August after declining 0.4% in July. Sales at gas stations fell 1.2%, reflecting lower gasoline prices.

✔️Retail sales in July were also higher than expected, according to a US Commerce Department report. Together with the falling unemployment rate, these data contradict market expectations of a 50 bps interest rate cut by the Federal Reserve. on Wednesday.

📊The US economy grew at a rate of 3% in the second quarter. The unemployment rate fell to 4.2% in August. Financial markets estimate the likelihood of a 50 basis point Fed rate cut at 67%, and a 25 basis point rate cut at 33%.

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⚡️Indian Companies Gear Up For Major IPOs Amid Economic Recovery

🇮🇳Indian companies are testing investor interest in large initial public offerings (IPOs) following recent successful debuts. Three IPOs are in the pipeline, each valued at more than $1 billion, including SoftBank-backed food delivery platform Swiggy Ltd. and Indian units of LG Electronics Inc. and Hyundai Motor Co.

⭐️The IPO boom comes amid India's rapid economic growth, which stands out against the backdrop of challenges in countries such as China. Indian listings have already raised $8.6 billion this year, surpassing the previous two years. Local and foreign investors are actively investing in the Indian stock market.

📊Shares of companies that have entered the Indian market this year posted an average first-day gain of 30%, higher than the global average of 22%. Recent IPOs like Bajaj Housing Finance Ltd., Ola Electric Mobility Ltd. and Brainbees Solutions Ltd., also showed significant progress.

⚠️Most of India's 240 offerings this year have raised less than $100 million, prompting increased regulatory scrutiny of possible price manipulation at smaller IPOs.

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⚡️Apple Shares Fall 3% Amid Weak iPhone 16 Pre-orders

🔽Apple shares are down 3% after one analyst warned that demand for the company's new iPhone 16 Pro model was lower than expected.

🗣️TF International Securities analyst Ming-Chi Kuo said pre-orders for the anticipated new iPhone 16, which began on September 13, totaled 37 million units, which is almost 13% lower than the release of the iPhone 15 last year. The expert attributes this drop to low interest in the iPhone 16 Pro model among users.

ℹ️One of the key factors behind the lower-than-expected demand for the iPhone 16 Pro series is that the main selling point - Apple Intelligence - is not available at launch alongside the release of the iPhone 16

❗️Weak demand for the iPhone 16 is not a good sign, especially with the holiday shopping season fast approaching. The risk of a significant decline in shares has increased significantly

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🗓 Coming Up Next Week

Monday 16.09
⏺Japan, China - Markets Closed
⏺NY Empire State Manufacturing Index

Tuesday 17.09
⏺China - Markets Closed
⏺US Retail Sales
⏺US Industrial Production

Wednesday 18.09
⏺UK, Eurozone CPI
⏺US Housing Starts
⏺FOMC Rate Decision

Thursday 19.09
⏺Bank of England Rate Decision
⏺US Existing Home Sales

Friday 20.09
⏺Japan CPI
⏺China LPR Rate
⏺Bank of Japan Rate Decision
⏺Eurozone Consumer Confidence

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🛢 Sudden Rally Sends Oil To Weekly Gains

📈Oil prices rose on Friday, extending their rally and putting crude oil on track for a weekly gain as production disruptions in the US Gulf of Mexico followed Hurricane Francine, which forced the evacuation of production platforms. Oil broke a series of weekly declines, despite Brent falling below $70 a barrel for the first time since late 2021 on Tuesday.

💵A weaker US dollar also helped support oil prices. The currency fell to a one-week low on Friday, making dollar-denominated goods cheaper for holders of other currencies.

🔗Oil producers assessed damage and conducted safety checks on Thursday as they prepared to resume operations in the US Gulf of Mexico. Official data showed that nearly 42% of the region's oil production had been shut down as of Thursday. UBS analysts forecast that production in the region will fall by 50,000 barrels per day (b/d) in September compared to the previous month.

🔽OPEC and IEA this week lowered their forecasts for demand growth, citing economic difficulties in China, the world's largest oil importer. In the United States, oil inventories also rose across the board last week as crude oil imports increased and exports fell

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⚡️Boeing Risks Getting Junk Credit Rating Due To Workers' Strike

⏺Boeing's unsecured debt credit rating has been Baa3 by Moody's Ratings since April. Moody's said Friday it will "assess the duration of the strike and its impact on cash flow, as well as potential equity raisings that Boeing may undertake to improve its liquidity."

⏺Boeing is fighting to maintain its investment grade rating, a task now complicated by a workers' strike. The company has more than $45 billion in debt and is bleeding money after being forced to cut production following a disaster in January.

⏺If the company's rating is downgraded to junk, it will increase Boeing's borrowing costs. The company is also losing money on some defense contracts, and its space business has been plagued by delays and cost overruns. There are other financial consequences of a downgrade, such as a smaller pool of investors willing to buy the company's debt.

⏺CFO Brian West told analysts at Morgan Stanley conference on Friday that the company will consider the necessary steps to strengthen its balance sheet. The aircraft maker is assessing its capital structure to ensure it can meet its upcoming debt payment over the next 18 months, he said.

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🕯 Most Volatile Stocks / 13.09.2024

🔽Boeing stock lost 4% after factory workers went on strike at midnight Friday. Boeing announced a deal on Sept. 8 with the International Association of Machinists and Aerospace Workers, representing 33,000 of its West Coast employees. Although IAM describes the proposal as “the best contract negotiated in history,” Boeing workers in Seattle and Oregon voted 94.6% against the agreement and 96% in favor of a strike, far more than the two-thirds vote needed for a work stoppage, which will disrupt the production of most aircraft, including the 737 Max.

🔽Adobe lost 9% on weak guidance despite its Q3 revenue beat. For the quarter ended Aug. 30 the software company earned $4.65 a share, topping the $4.53 expected by analysts. Quarterly revenue came in at $5.41 billion, an 11% increase from a year earlier and surpassing the $5.37 billion forecast by analysts. But Adobe's Q4 revenue guidance came in below analysts' expectations. The company projected earnings per share ranging from $4.63 to $4.68 on revenue between $5.5 billion and $5.55 billion. Analysts had forecast $4.67 of earnings on $5.61 billion in revenue.

🔼Shares of the furniture retailer RH surged more than 25% Friday, building on momentum from Thursday when the company reported revenue and earnings that topped estimates. RH said demand — defined by the company as the value of orders placed — jumped 7% in the second quarter and said that may double in the third quarter. Investors are buying into the narrative that RH's latest product assortment is driving the growth. After all, the company is gaining sales despite an environment of high interest rates and a challenging housing market.

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