Welcome to the MarketReader Minute.

Below are AI-generated insights on today’s premarket moves, powered by MarketReader technology.

If you find the insights useful, you may subscribe to our new sector-specific newsletters or share this on Twitter.

Wednesday, September 25

Some of the largest macro moves in the market today include: USD/CNH +0.4%. Oil (WTI) -1.9%. A50 Index (China) +1.4%. 

Recent market movements have been significantly influenced by China's economic stimulus measures, which include record policy rate cuts. These actions have led to a rally in Chinese and Hong Kong equity indices while boosting global risk appetite, particularly benefiting emerging-market stocks.

In the United States, mortgage applications surged to their highest level since June 2022 due to declining benchmark mortgage rates following expectations of dovish Federal Reserve policies. Additionally, building permits rose by 4.6% in August despite being slightly revised down from preliminary estimates.

Geopolitical tensions are also impacting markets as Israel intercepted a Hezbollah missile targeting Tel Aviv amid rising regional conflicts. This development has contributed to fluctuations in key currencies and commodities such as natural gas prices remaining elevated amidst ongoing hostilities involving Lebanon.

iShares China Large-Cap ETF (FXI) [-2.9%]
The iShares China Large-Cap ETF (FXI) has declined significantly by 2.9% in pre-market trading. Contributing to this performance, the USD/CNH movement accounted for a negative impact of 0.36%. Key holdings such as Tencent Holdings Ltd (TCEHY), Trip.com Group Ltd (TCOM), JD, and Li Auto Inc (LI) have also recorded notable declines. TCEHY is facing operational challenges due to a strike affecting its gaming segment, while TCOM's share sale has led to a premarket drop. Additionally, a reported 12.7% year-over-year decrease in shipments of foreign-branded phones in China, including Apple iPhones, adds to the market's challenges. The People's Bank of China has announced a monetary stimulus package aimed at economic support, yet FXI continues to show a negative return. Geopolitical tensions in the Middle East further complicate the market landscape for large-cap Chinese equities.

United States Oil Fund LP (USO) [-1.9%]
United States Oil Fund LP (USO) has seen a price movement of -1.9% as of the pre-market session on Wednesday. Recent fluctuations in oil prices have been noted, with Brent crude experiencing a slight drop influenced by China's economic stimulus measures and ongoing geopolitical tensions in the Middle East. U.S. crude inventories reported a significant drawdown of 4.339 million barrels for the week ending September 20, which was markedly higher than the expected decline. This unexpected inventory reduction is notable as it typically elicits a substantial response in USO, which is sensitive to inventory changes. Additionally, concerns regarding supply disruptions due to adverse weather conditions affecting Gulf production facilities have further complicated market dynamics.

SAP |-2.2%|-5.8B
SAP SE | Application Software
SAP shares declined following reports of a U.S. Department of Justice investigation into potential price-fixing activities involving the company and product reseller Carahsoft. This probe, ongoing since at least 2022, examines allegations that SAP conspired to overcharge government agencies on sales exceeding $2 billion since 2014. Recent reports indicated a significant selloff, with SAP's stock dropping to just under 200 euros in European trading. The investigation's implications arise amid earlier stock gains linked to optimism surrounding AI growth and cost-cutting measures. Concurrently, the Nasdaq 100 Index has decreased, reflecting broader market sentiment that may be influencing SAP's performance, which has underperformed its sector peers.

GM | -3.3%|-1.7B
General Motors Co | Automobile Manufacturers
General Motors Co has been downgraded to an underweight rating by MSCO, which may contribute to the stock's decline of over three percent in pre-market trading. Additionally, KB Home shares dropped significantly after reporting third-quarter earnings that missed net income expectations, despite beating revenue forecasts. The report indicated a broader market softening, characterized by flat net orders and a notable decrease in backlog. This context may also influence the movement in General Motors Co shares, given their historical correlation with KB Home's performance. General Motors is currently underperforming relative to its sector peers.

RIVN | -3.3% | -375.4M
Rivian Automotive Inc | Automobile Manufacturers
Rivian Automotive Inc's stock has been downgraded to equal-weight by Morgan Stanley, reflecting a shift in sentiment regarding the company's prospects. The downgrade follows a significant decline in Rivian's shares, which have dropped by approximately 50% since the start of 2024. This decline comes after a brief rally over the summer, highlighting ongoing challenges in the current market environment. Social media discussions have raised concerns about Rivian's financial performance, noting a reported loss of $40,000 per vehicle sold and an annual R&D expenditure of $2 billion. Additionally, Rivian is experiencing renewed interest due to a $5 billion deal with Volkswagen, which represents around 50% of its market capitalization, while its cash reserves account for the other half. Meanwhile, NIO Inc has seen a decline of over 3% amid news of a new charging agreement with Sinopec.

GPN | -2.3% | -597.0M
Global Payments Inc | Transaction & Payment Processing Services
Global Payments Inc has experienced a notable decline of 2.3% in pre-market trading. This movement follows multiple downgrades and price target reductions from analysts. KeyBanc's Alex Markgraff lowered the price target to 135 from 145 while maintaining an Overweight rating. TD Cowen's Bryan Bergin also reduced the target to 122 from 125, retaining a Buy rating. Additionally, both Seaport and BTIG downgraded the stock to neutral from Buy. Concurrently, Global Payments projected preliminary adjusted EPS growth of approximately 10% for 2025, with expectations for low teens growth in 2026-2027, a forecast deemed below market expectations. Barclays rated the company as Overweight with a price target of 145. The iShares iBoxx $ High Yield Corporate Bond ETF has also declined, reflecting broader market sentiment.

NIO | -3.0% | -364.3M
NIO Inc | Automobile Manufacturers
NIO Inc. has entered a charging agreement with Sinopec, allowing its drivers to access EV chargers across China via the NIO App or vehicle display. This partnership builds on previous collaborations since 2021 and aims to improve charging infrastructure for NIO consumers. Sinopec reported a slight decline in operating revenue in the first half of 2024, attributed to weak diesel demand and the rise of electric vehicles, yet it continues to expand its EV battery charging network. NIO has established 4,000 charging stations and unveiled its fourth-generation NioPower Charger. The company is also shifting its battery swap pricing model to a charge-by-kWh system. Meanwhile, the iShares China Large-Cap ETF has declined, reflecting broader market sentiment that may be impacting NIO, which has dropped significantly in price.

Thank you for spending a minute with us. 

If you have 2 more minutes, watch this demo of the MarketReader Platform: