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Tuesday, September 10

Some of the largest macro moves in the market today include: Oil (WTI) -1.2%. Natural Gas +5.0%. Some of the largest moves among US mega-cap stocks include: JPMorgan Chase & Co (JPM) +1.4%. Amazon.com Inc (AMZN) +1.3%. Berkshire Hathaway Inc (BRK.B) +0.5%. 

Recent economic data from the United Kingdom shows a mixed labor market picture. The unemployment rate fell to 4.1% for May to July, while employment surged by 265 thousand in the same period, marking significant job creation driven mainly by full-time positions.

In Germany, inflation has eased significantly with an annual rate confirmed at 1.9% for August, down from previous months and matching preliminary estimates. This decline is attributed primarily to falling energy costs despite rising food prices.

China's trade surplus widened sharply in August due to slower-than-expected export growth of 4.6%, which was below forecasts but still positive year-on-year; imports also rose more than expected though they moderated compared to prior months' figures amidst ongoing government efforts aimed at stimulating domestic demand.

Financial Select Sector SPDR Fund (XLF) [+0.5%]
The Financial Select Sector SPDR Fund (XLF) has seen a price increase of 0.5% since Monday. Key contributors to this performance include JPMorgan Chase, Wells Fargo, Bank of America, American Express, and Citigroup, all of which reported positive returns. Notably, Wells Fargo's CFO highlighted strong deposit performance and stable net interest income guidance for fiscal year 2024, despite some loan delinquencies. Bank of America announced a significant increase in its minimum hourly wage, aiming for $25 by 2025. Additionally, the Federal Reserve has halved the capital hike for the largest banks from 19% to 9%, affecting major institutions including Citigroup and Wells Fargo. This adjustment in capital requirements may influence the operational landscape for these banks.

iShares MSCI Germany ETF (EWG) [-0.9%]
The iShares MSCI Germany ETF (EWG) has decreased in pre-market trading, reflecting a broader cautious market environment, as evidenced by the Russell 2000 Index's decline of 0.25%. Within the ETF's holdings, Deutsche Bank (DB) has dropped significantly, while SAP and FMS have shown minimal changes. Germany's Consumer Price Index (CPI) for August revealed a year-over-year increase of 1.9%, aligning with expectations but lower than the previous figure of 2.3%. Month-over-month, the CPI declined by 0.1%, reversing from an earlier increase of 0.3%. These inflation figures suggest stagnation in consumer price growth, potentially affecting economic sentiment and investment in the German market.

ORCL |+8.2%|+34.0B
Oracle Corp | Systems Software
Oracle Corp has experienced significant stock movement following the announcement of a strategic partnership with Amazon Web Services (AWS), which includes the launch of Oracle Database@AWS. This initiative allows customers to access Oracle's Autonomous Database and Exadata Database Service within the AWS environment, enhancing database management and cloud migration capabilities. Additionally, Oracle's Q1 financial results surpassed expectations, reporting adjusted revenue of $13.31 billion and a 45% increase in cloud infrastructure revenue. The company also noted a 53% rise in total remaining performance obligations, reaching $99 billion. Following the earnings report, Oracle's actual earnings per share were $1.39, exceeding the anticipated $1.32, and the stock saw an increase shortly after the announcement. Oracle provided guidance for Q2 FY2025, projecting EPS between $1.45 and $1.49 and revenue between $14.0 billion and $14.2 billion.

HPE |-5.7%|-1.2B
Hewlett Packard Enterprise Co | Technology Hardware, Storage & Peripherals
Hewlett Packard Enterprise Co has announced a public offering of $1.35 billion in Series C mandatory convertible preferred stock, which has contributed to a significant decline in its share price. In postmarket trading, shares dropped to $16.62, reflecting a decrease of 5.6%. The company plans to use the net proceeds from this offering to fund the acquisition of Juniper Networks. Additionally, there is an expectation to grant underwriters a 30-day option to acquire an extra $150 million of preferred stock, with each share carrying a liquidation preference of $50.

AU |-6.0% | -678.8M
Anglogold Ashanti PLC | Gold
AngloGold Ashanti PLC has announced its agreement to acquire Centamin for $2.5 billion, valuing each Centamin share at 163 pence, which represents a premium to its prior closing price. This acquisition is anticipated to enhance AngloGold's annual production by approximately 450,000 ounces, increasing total output to over 3 million ounces. The deal, which will see AngloGold shareholders owning 83.6% of the combined entity, is expected to be accretive to free cash flow per share in the first full year following completion. Centamin's board plans to endorse the transaction, which is set to finalize in the fourth quarter of 2024, pending necessary regulatory and shareholder approvals. Concurrently, AngloGold Ashanti's stock has dropped significantly, reflecting broader market conditions where it is underperforming its sector peers.

AZN |-1.0% | -1.2B
AstraZeneca PLC | Pharmaceuticals
AstraZeneca PLC's shares have declined following the announcement that its cancer drug, datopotamab deruxtecan (Dato-DXd), failed to meet critical targets in clinical trials. The Phase 3 trial for non-small cell lung cancer did not achieve statistical significance for overall survival improvement compared to chemotherapy, despite showing a 2.3-month improvement for patients. This setback has raised concerns about the company's oncology pipeline and potential future revenues. Analysts from BofA Securities and Stifel have suggested that the U.S. FDA may require additional studies to validate a biomarker test intended to identify responsive patients, further complicating the drug's regulatory approval and market viability.

BABA | +2.7% | +43.5B
Alibaba Group Holding Ltd | Broadline Retail
Alibaba Group Holding Ltd's shares in Hong Kong rose significantly following their inclusion in the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs. This development permits eligible mainland Chinese investors to trade Alibaba's ordinary shares directly, which is expected to enhance liquidity and expand the investor base. Analysts project that this inclusion could attract between $2 billion and $3 billion in mainland liquidity by year-end, with potential total inflows reaching $11 billion over the next two to three years. The company's stock emerged as the top performer on the Hang Seng Index, reflecting increased demand expectations from mainland investors.

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