US Stocks Rise: Dow, S&P 500 Hit Records; Nasdaq China Up 4.15%
On Thursday, the three major indices rose, with the Dow Jones Industrial Average (DJIA) breaking the 42,000 points mark for the first time, and the S&P 500 closing above 5,700 points for the first time, both hitting historical highs.
During the trading session, the DJIA rose to a high of 42,160.91 points, and the S&P 500 rose to a high of 5,733.57 points.
The Federal Reserve announced a rate cut of 50 basis points yesterday and is expected to further cut rates before the end of this year, a decision that boosted the stock and metal markets.
**U.S. Stocks**: At the close, the Dow Jones Industrial Average rose 522.09 points, or 1.26%, to 42,025.19 points; the Nasdaq Composite rose 440.68 points, or 2.51%, to 18,013.98 points; the S&P 500 rose 95.38 points, or 1.70%, to 5,713.64 points.
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Star tech stocks rose across the board, with Tesla (TSLA.US) up 7%, Nvidia (NVDA.US) up 4%, and Apple (AAPL.US) up 3.7%.
The NASDAQ Golden Dragon China Index closed up 4.1%, with Alibaba (BABA.US) rising nearly 5% and JD.com (JD.US) up 6.7%.
**European Stocks**: The German DAX 30 rose 290.00 points, or 1.55%, to 19,010.15 points; the UK FTSE 100 rose 77.76 points, or 0.94%, to 8,331.44 points; the French CAC 40 rose 170.51 points, or 2.29%, to 7,615.41 points; the Euro Stoxx 50 rose 108.45 points, or 2.24%, to 4,943.75 points; the Spanish IBEX 35 rose 93.46 points, or 0.80%, to 11,778.16 points; the Italian FTSE MIB rose 364.51 points, or 1.08%, to 34,020.00 points.
**Asia-Pacific Stocks**: The Nikkei 225 rose over 2%, the Jakarta Composite Index in Indonesia rose 0.97%, and the VN30 Index in Vietnam rose 0.57%.
**Gold**: COMEX December gold futures closed up 0.5% at $2,611.5 per ounce.
Gold prices rebounded on Thursday, with Allegiance Gold Chief Operating Officer Alex Ebkarian stating that the market is considering larger and more rate cuts because the U.S. has fiscal and trade deficits, which will further weaken the overall value of the dollar.
If you combine geopolitical risks with the current U.S. deficits, low-yield environment, and a weakening dollar, all these factors together are the reasons for the rise in gold.
In our view, this rally could go further.
Our target is to reach $2,700 per ounce by mid-2025.
In addition to short-term risk-driven factors, we expect increased demand for gold ETFs in the coming months.
**Cryptocurrency**: On Thursday, after the Federal Reserve's first rate cut in over four years, cryptocurrency prices rose as part of a broader market rebound.
Bitcoin rose more than 1.8% to $62,995.
**Crude Oil**: West Texas Intermediate (WTI) crude oil futures for delivery in October on the New York Mercantile Exchange closed up $1.04, or about 1.47%, at $71.95 a barrel.
Brent crude oil futures for November delivery closed up $1.23, or about 1.67%, at $74.88 a barrel.
**Metals**: London metals rose, with nickel up 0.62%, copper up 1.21%, zinc up more than 1.52%, and aluminum up 0.22%.
**Macro News**: U.S. initial jobless claims unexpectedly fell last week, suggesting faster job growth in September.
The number of Americans filing for unemployment benefits unexpectedly fell last week, indicating faster job growth in September.
Previous data showed that the U.S. labor market has cooled significantly, with hiring slowing down and job vacancies decreasing, raising concerns about an environment that could undermine economic expansion.
However, today's data indicates that layoffs remain low.
The claims report showed that the number of people applying for unemployment benefits fell by 14,000 to 1.829 million in the week ending September 7, after peaking at a two-and-a-half-year high in July.
This is mainly attributed to policy changes in Minnesota, which allow non-teaching staff in the state to apply for unemployment benefits during the summer vacation.
The continuing release of initial jobless claims next week may provide more clues to the health of the September job market.
**U.S.
Existing Home Sales Drop More Than Expected in August Amid High Prices and Fed Rate Cuts**: U.S. existing home sales fell more than expected in August as high prices persisted despite continued improvements in supply.
The Federal Reserve cut interest rates by 50 basis points, the first reduction in borrowing costs since 2020.
This move could further lower mortgage rates, which have already fallen to an 18-month low.
Lower mortgage rates may attract more homeowners to put their homes on the market, potentially increasing supply.
Most homeowners have mortgage rates below 4%, and the so-called "rate lock" has led to a shortage of second-hand homes on the market.
However, lower borrowing costs could stimulate demand, outpacing supply and keeping prices high.
Lawrence Yun, Chief Economist of the National Association of Realtors (NAR), said that August home sales were disappointing again, but the recent decline in mortgage rates coupled with an increase in inventory is a powerful combination that will provide an environment for sales growth in the coming months.
**Bank of England Keeps Rates Steady as Expected, with Experts Expecting Rate Cuts to Begin in November**: After the August inflation data remained unchanged, the Bank of England kept the benchmark interest rate unchanged on Thursday, with market expectations increasing for another rate cut before the end of the year.
The Bank of England cut interest rates for the first time last month, lowering the rate by 25 basis points.
This year, the UK's inflation rate has been gradually slowing down, from 4% in January to 2.2% in August, slightly higher than the 2% low in May and June.
However, last month's inflation rate was in line with July's due to the rise in air ticket prices offsetting the decline in fuel and dining prices.
The UK's service sector inflation rate has remained high, which is one of the key concerns of the Bank of England's Monetary Policy Committee.
James Smith, an economist at ING Group in the UK, said that the continued decline in expected and actual wage and price growth in recent months indicates further rate cuts in the future.
Coupled with the ongoing cooling of the job market, we believe that the broad consensus of the Bank of England will shift towards supporting a faster pace of rate cuts throughout the winter.
We expect consecutive rate cuts to begin in November, bringing the bank rate down to 3.25% by next summer.
**UBS Strategists Expect the Fed's Final Rate Cuts to Exceed Market Expectations, Potentially Causing a Stock Market Bubble**: UBS strategists believe there is a clear risk that U.S. interest rates will eventually fall more than the market currently prices, potentially inflating a stock market bubble.
A UBS team led by Andrew Garthwaite said that since 1981, the Fed's policy easing cycle, which started with a 50 basis point cut, has been accompanied by an economic recession, but this time they believe it is a sign of the Fed's aggressiveness rather than an economic recession.
Garthwaite pointed out that the market pricing reflects that interest rates will bottom out around 2.8%, a level that the Fed has previously indicated as the neutral interest rate level, "so there is a clear risk that interest rates will eventually fall more than expected."
The UBS team believes that the steepening of the yield curve dominated by short-term bonds is favorable for defensive stocks and the consumer goods industry, but not for luxury goods.
They expect small-cap stocks to outperform because their floating-rate debt is three times that of large-cap stocks.
**Bank of America: Fed's 50 Basis Point Rate Cut is Positive for Investment-Grade Credit**: Bank of America analyst Selig said in a report that the Fed's 50 basis point rate cut is beneficial for investment-grade credit.
He said that demand for long-term bonds "has been very strong because the market expects the upcoming rate cut cycle from the Fed."
The Fed has just confirmed that a relatively rapid rate cut cycle is coming.
Selig added that a significant rate cut should alleviate concerns about U.S. economic growth.
He said: "Finally, the bear steepening of the U.S. Treasury yield curve, supported by rising yields and lower foreign investor hedging costs, has supported demand."
**"Big Short" Eisman Withdraws Trump Re-election Forecast, Now Says U.S. Presidential Election Outcome is Uncertain**: Steve Eisman, a senior portfolio manager at Neuberger Berman, now says he doesn't know who will win the U.S. presidential election, withdrawing his previous forecast that Donald Trump would win.
"I've taken back that forecast," Eisman said in an interview on Thursday, citing President Joe Biden's decision to withdraw from the race.
In July, he said that regardless of whether Biden would withdraw or not, Trump would win the November presidential election.
He said that if the Democrats win both the House and the Senate and the White House, the market will fall straight down on the expectation of rising taxes.
But if Harris takes the White House and the Democrats do not win by a landslide, then the market will be "fine."
He also said that if Trump wins, the stock market will rise regardless of the congressional outcome, as investors will take tax cuts for granted.
Eisman said that Harris's election would boost solar stocks.
Eisman reiterated that his portfolio is mainly focused on artificial intelligence, technology stocks, and infrastructure sectors.
**BlackRock: Political Stability During Labour Government May Help UK Stock Market Rise, Offsetting Weaker Economic Outlook**: Paul, a strategist at the BlackRock Investment Institute, said in a report that the UK stock market may rise because the prospect of political stability during the Labour government's tenure offsets the weaker outlook for the UK economy.
Structural challenges such as weak productivity have put pressure on the UK.
He said that the UK's economic growth prospects are not good, but the relative political stability brought about by the government's majority seats may reduce the risk premium on UK assets.
"We are overweight UK equities in the 6- to 12-month tactical horizon and favor a proactive approach to best capture the investment opportunities in the UK.
"**Stock News**: Brightband, founded by a former Google executive, secures $10 million in funding to predict extreme weather using AI.
A startup founded by a former Google executive, Brightband, aims to improve weather forecasting with artificial intelligence.
The company announced on Thursday that it has raised $10 million in Series A funding, led by Prelude Ventures, with participation from Bain Capital's Future Back Ventures and Slack co-founder Karl Henderson.
The company, launched this summer by former Google executive Julian Green and three scientists, aims to develop a paid product and an open-source AI prediction model trained on raw weather observations.
Amy McGovern, a co-founder of Brightband and a professor of computer science and meteorology at the University of Oklahoma, said in an interview that Brightband will initially focus on predicting the behavior of extreme weather events, including heatwaves and tropical cyclones, days ahead of traditional forecasts.
**United States Steel (X.US)**: Despite opposition from U.S. officials, confident of approval for acquisition plan.
United States Steel CEO, Burt, said the company is confident of obtaining regulatory approval for its $14.1 billion acquisition plan of Nippon Steel, despite high-ranking U.S. political leaders promising to veto the deal.
Burt said earlier this quarter, Nippon Steel disclosed at least an additional $1 billion investment commitment for the modernization of a facility at a plant in Pennsylvania, and another $300 million for the upgrade of a blast furnace at a plant in Indiana.
Burt said he has seen a lot of support from employees and the community for the Nippon Steel deal.
President Biden has stated that United States Steel should continue to be owned and operated domestically in the U.S. Former President Donald Trump vowed to block the agreement if he were to win the election, and Vice President Kamala Harris echoed Biden's position earlier this month.
**Novo Nordisk (NVO.US)** responds to the case of illegal online sales of semaglutide: Actively supports government regulatory agencies in taking effective enforcement actions.
Novo Nordisk stated that, to date, the semaglutide product approved and commercially launched in China is Ozempic, approved for the treatment of adult type 2 diabetes.
In China, Novo Nordisk strictly follows the requirements of laws and regulations for the sale of prescription drugs, only cooperating with distributors with drug operation qualifications.
To date, Ozempic has not been sold on any online platforms (including e-commerce, social platforms, etc.
), nor has it authorized or commissioned any third party to sell the drug on online platforms.
Novo Nordisk stated that the company also actively monitors the production and sale of potential counterfeit, infringement, and other illegal drugs in the market, and actively supports government regulatory agencies in taking effective enforcement actions.
Novo Nordisk is always committed to ensuring patient safety and will continue to support government regulatory agencies in taking legal action against entities suspected of engaging in similar illegal activities.