- US100 gains 0.5%; slow gains in Nvidia shares support semiconductor industry sentiment
- Intel (INTC.US) gains 7% after revealing strategic talks with Morgan Stanley and Goldman Sachs; possible M&A and spin-off of Foundry business
- Chinese stocks gain after heavy buying by Chinese state-controlled funds, trying to support sentiment. Alibaba (BABA.US) gains 4%; Pinduoduo, Temu owner (PDD.US) rebounds
- Solid US data; 'low' PCE inflation and inflation expectations lowest since 2020 (2.8%), solid sentiment, consumer earnings and spending
Today's session on Wall Street is proceeding under the dictates of the bulls; indexes opened higher. The PCE data came in line with forecasts, while the core PCE reading came in slightly below what was forecast. At the same time, data on Americans' personal spending and earnings surprised marginally higher. Sentiment according to Michigan (final, for August) came in slightly above the previous reading, and inflation expectations fell to levels not seen since 2020.
All these building blocks are being put together by investors, who are expecting a soft landing for the US economy. Fed rate contracts call for a 25 bp cut in September and about 100 bp cuts throughout 2024. Also, OPEC+'s decision to raise production from October seems positive for short-term market sentiment, which may have perceived the move as 'final proof' that inflation will now be under control. Yields on 10-year U.S. Treasury bonds are rising today to near 3.87%, up from 3.85% yesterday.
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Create account Try a demo Download mobile app Download mobile appThe internet/e-commerce and semiconductor sectors are posting the strongest gains today. Source: xStation5
US100 (M15 interval)
The Nasdaq 100 (US100) is recording upward momentum, although recent selling volumes remain relatively high and active. The contract has climbed above three, major moving averages and the 23.6 Fibonacci retracement of the upward wave from early August.
Source: xStation5
News from companies
Investors reacted positively to a Bloomberg report, to which anonymous sources told Bloomberg that the company is on track to reach a 'deal' with leading U.S. banks, who are advising it on a potential M&A; strategies being explored to restore the company to profitability include the possible spin-off of the profitability-burdened Foundry business, in which the company undertakes orders for external customers, and the suspension of plans to build some factories.
Source: xStation5
