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Thursday, September 12

Some of the largest macro moves in the market today include: Copper +1.1%. 

The European Central Bank (ECB) has cut the deposit facility rate by 25 basis points, reflecting an updated inflation outlook and better transmission of policy. The ECB's projections indicate that while core inflation is expected to decline over the next few years, domestic pressures remain elevated due to rising wages. Economic growth forecasts have been slightly downgraded for upcoming years owing to weaker domestic demand.

In the United States, producer prices rose more than anticipated in August with a monthly increase of 0.2%, driven primarily by higher service costs despite unchanged goods prices. Core producer prices also exceeded expectations on both a monthly and annual basis but remained below market estimates annually at 2.4%. Concurrently, initial jobless claims edged up as predicted last week indicating continued softness in the labor market.

Japan’s business sentiment among large manufacturing firms improved significantly in Q3 from negative territory previously recorded earlier this year even after recent interest rate hikes by its central bank; however final GDP data showed slower-than-expected economic growth for Q2 at an annualized rate of 2.9%. This positive shift suggests optimism about future conditions within Japan’s industrial sector heading into late-year quarters.

VanEck Semiconductor ETF (SMH) [-0.3%]
The VanEck Semiconductor ETF (SMH) has seen a slight decline of 0.3% since Wednesday, influenced by notable movements among its holdings. Micron Technology Inc. (MU) experienced a significant drop following downgrades from Exane and Raymond James, with its stock price falling approximately 4%. Raymond James adjusted its price target for Micron from $160.00 to $125.00 while maintaining an Outperform rating. Other contributors to the ETF's performance included Qualcomm (QCOM), NXP Semiconductors (NXPI), Advanced Micro Devices (AMD), and Intel (INTC), all registering modest declines. In broader macroeconomic news, the US Producer Price Index (PPI) increased by 0.2% month-over-month in August 2024, surpassing expectations, while initial jobless claims rose to 230,000, indicating a softening labor market. Core PPI also exceeded forecasts, contributing to heightened volatility in semiconductor stocks.

United States Oil Fund LP (USO) [+1.2%]
The United States Oil Fund LP (USO) has experienced a price increase of 1.7% since Wednesday. The U.S. Energy Information Administration reported a rise in crude oil inventories by approximately 800,000 barrels to 419.1 million barrels for the week ending September 11. Crude oil production remained stable at 13.3 million barrels per day, while imports increased by 146,000 barrels per day to 6.5 million, and exports fell by 113,000 barrels per day to 3.7 million. Additionally, gasoline stockpiles climbed by 2.4 million barrels to 221.6 million, and distillate stocks rose by 2.3 million barrels to 125 million. Concurrently, Brent crude prices rose about 1.3%, influenced by Hurricane Francine, which caused a shutdown of offshore platforms in the Gulf of Mexico. Concerns regarding potential disruptions to U.S. production capacity are growing, alongside a reported decline in OPEC's daily output by 70,000 barrels per day due to outages in Libya.

MRNA |-10.4%|-2.8B
Moderna Inc | Biotechnology
Moderna Inc has experienced a significant decline in share price, dropping notably since Wednesday. The company has implemented a portfolio prioritization strategy aimed at reducing research and development expenses by $1.1 billion, lowering projected R&D spending from $4.8 billion in 2024 to between $3.6 billion and $3.8 billion by 2027. Concurrently, Moderna anticipates 2025 revenue to be between $2.5 billion and $3.5 billion, which falls below the consensus estimate of $3.74 billion. Additionally, the company announced the discontinuation of five clinical programs as part of its strategic shift, while highlighting a positive Phase 3 result for its RSV vaccine aimed at high-risk adults. This combination of reduced spending and lower revenue expectations has contributed to the recent price movement.

NVDA |+1.0%|+27.8B
NVIDIA Corp | Semiconductors
NVIDIA Corp shares experienced an increase, marking its best one-day performance in six weeks. This uptick coincides with reports of NVIDIA potentially participating in OpenAI's upcoming fundraising round, which could elevate OpenAI's valuation to $150 billion. Additionally, NVIDIA went ex-dividend for $0.01 per share. On the macroeconomic front, the US Producer Price Index rose, leading to increased volatility for NVIDIA, which moved significantly more than its historical norm. Initial Jobless Claims also rose slightly, indicating a softening labor market. In the broader market context, the Nasdaq 100 Index saw a modest increase, which may correlate with NVIDIA's recent price movement.

MU |-2.9% | -2.8B
Micron Technology Inc | Semiconductors
Micron Technology Inc. has experienced a notable decline, dropping significantly following a series of downgrades. Exane downgraded the stock, contributing to a 4% decrease. Additionally, Raymond James lowered its price target for Micron to 125.00 from 160.00 while maintaining an Outperform rating. This reflects a shift in market sentiment regarding the company's future performance. Recent macroeconomic events have also influenced Micron, with US Producer Prices rising by 0.2% month-over-month in August 2024, surpassing expectations and heightening volatility, as Micron typically reacts more strongly than its sector to such data. Furthermore, Initial Jobless Claims increased by 2,000 to 230,000, indicating a softening labor market, which historically affects Micron's volatility.

COIN |+1.9% | +750.8M
Coinbase Global Inc | Financial Exchanges & Data
Coinbase Global Inc has launched Coinbase Wrapped BTC (cbBTC), a new ERC20 token that is backed 1:1 by Bitcoin held in its custody. This initiative aims to enhance Bitcoin's utility within the decentralized finance (DeFi) ecosystem, initially supporting the Base and Ethereum networks, with plans for further expansion. cbBTC allows users to access Ethereum-based DeFi applications using their Bitcoin holdings, thus facilitating greater adoption and liquidity in the DeFi space. The token integrates with major DeFi protocols such as Aave, Compound, and Curve. Additionally, recent US Producer Price Index data showed factory gate prices rising, which has historically led to significant volatility in Coinbase's stock. Initial Jobless Claims rose slightly, aligning with expectations, indicating a stable but cautious economic outlook.

GOLD | +1.0% | +336.8M
Barrick Gold Corp | Gold
Barrick Gold Corp (GOLD) has seen its price increase by 1.0% in the pre-market session. This movement coincides with gold prices demonstrating resilience, currently trading at approximately $2,515.59 per ounce. The likelihood of a 25-basis-point interest rate cut by the Federal Reserve has reached an 85% probability, supported by recent U.S. consumer inflation data. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold. Additionally, central banks are expected to continue increasing their gold reserves, which will bolster demand. Recent macroeconomic data releases have also influenced GOLD's performance; notably, the U.S. Producer Price Index rose more than expected, while Initial Jobless Claims aligned with forecasts. Furthermore, B2Gold Corp (BTG) experienced a significant increase after securing an agreement in Mali, which may be contributing to Barrick's price movement due to their historical correlation.

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