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Monday, September 30

Some of the largest macro moves in the market today include: Bitcoin -2.6%. Gold -0.8%. US 2Y Treasury Bond -0.1%. Some of the largest moves among US mega-cap stocks include: NVIDIA Corp (NVDA) -2.7%. Eli Lilly and Co (LLY) -1.3%. JPMorgan Chase & Co (JPM) -1.2%.

Recent economic data from Germany shows a significant drop in the annual inflation rate to 1.6% for September, below expectations and marking the lowest level since February 2021. This decline is largely attributed to base effects rather than substantial changes in core or services price inflation, which remain high.

In China, manufacturing activity contracted less severely than expected with an official PMI of 49.8 for September but still indicating ongoing challenges as it marks five consecutive months of contraction. Additionally, China's Caixin Manufacturing PMI fell unexpectedly to its steepest contraction since January due to renewed downturns in new orders and foreign sales.

Japan's industrial production saw a sharp decline by 3.3% month-over-month in August against market consensus forecasts while retail sales growth slightly exceeded expectations at an annual increase of 2.8%. Political developments also impacted markets as speculation about potential snap elections added uncertainty amidst these mixed economic indicators.

iShares China Large-Cap ETF (FXI) [+2.4%]
The iShares China Large-Cap ETF (FXI) is showing a premarket increase of 2.4%. Significant contributors to this performance include JD.Com, which experienced a notable rise, and Li Auto, following an upward revision of its price target by CLSA. The foreign exchange regulator in China indicated a low likelihood of further deleveraging in foreign debt for Q4, suggesting stability in this area. Recent economic data reflects mixed results, with the manufacturing PMI slightly above estimates and the non-manufacturing PMI slightly below expectations. Social media discussions have highlighted a potential rally in the Chinese stock market, driven by government stimulus measures, including a reduction in mortgage rates, which users believe could stimulate economic growth. This sentiment aligns with FXI's impressive year-to-date performance, significantly outperforming the S&P 500.

Bitcoin (BTC/USD) [-2.7%]
Bitcoin (BTC/USD) is currently experiencing a decline of 2.7%, with its daily return at -1.73%. This downturn coincides with a significant drop in the Japanese stock market, where the Nikkei 225 has fallen sharply due to concerns about rising interest rates and potential policy changes under the new Prime Minister. Additionally, geopolitical tensions have escalated following military actions involving Israel, raising fears of broader conflict that could affect global financial stability. On social media, users have expressed bullish sentiment, with discussions highlighting a price target of $68,500 for Bitcoin. Over the past week, Bitcoin has reportedly increased against both the USD and AUD, reflecting a vibrant community engagement around its performance. Ethereum (ETH/USD) has also declined, which may further influence Bitcoin's price movement due to their strong correlation.

STLA |-13.1%|-5.2B
Stellantis NV | Automobile Manufacturers
Stellantis N.V. has revised its FY24 financial guidance, now forecasting an adjusted operating income margin of 5.5% to 7.0%, a notable decline from previous double-digit expectations. This updated outlook is attributed to increased remediation actions stemming from North American performance issues and deteriorating global industry dynamics. The company anticipates industrial free cash flow will range from negative EUR 5 billion to negative EUR 10 billion, a stark shift from earlier positive projections. Stellantis is accelerating its inventory normalization in the U.S., targeting 330,000 units by year-end 2024, and expects North American shipments to decline by over 200,000 vehicles in the latter half of 2024 compared to prior guidance. In pre-market trading, STLA's stock was reported down approximately 12%, reflecting these significant adjustments and concerns regarding the broader automotive market.

NIO | +14.4%| +2.2B
NIO Inc | Automobile Manufacturers
NIO Inc. has announced a significant funding development, securing approximately RMB 13.3 billion (around $1.9 billion) for its subsidiary, NIO China. This includes RMB 3.3 billion from strategic investors such as Hefei Jianheng New Energy Automobile Investment Fund Partnership and Anhui Provincial Emerging Industry Investment Co., Ltd. Concurrently, NIO will inject RMB 10 billion into NIO China, reducing its controlling interest from 92.1% to 88.3%. The investments will occur in two installments, with 70% expected by November 2024 and the remaining 30% by December 2024. Social media activity highlights excitement over a recent stock price increase and the launch of the ONVO L60 Smart Electric SUV, with deliveries already commencing. Following these developments, NIO's stock surged nearly 20%, reflecting strong demand for its new model and positive analyst sentiment regarding cash flow improvements.

GM | -4.6% | -2.3B
General Motors Co | Automobile Manufacturers
Shares of General Motors Co are trading lower, down nearly 4%, in line with a broader decline in the auto sector. This drop coincides with Stellantis, which has seen a significant decline of over 13% after revising its profit outlook for fiscal year 2024, projecting lower operating income and negative cash flow due to challenges in North America. Social media discussions have highlighted GM's strong performance in the electric vehicle segment during July and August, along with speculation about potential catalysts from a German OEM announcement expected soon. Despite these developments, GM's stock remains under pressure amid adverse sentiment affecting multiple automakers.

BABA | +5.1% | +111.6B
Alibaba Group Holding Ltd | Broadline Retail
Alibaba Group Holding Ltd's stock has increased significantly, reflecting positive sentiment in the broader Chinese market. A report from approximately 24 hours ago noted that Alibaba's rise coincided with gains in JD and Baidu, indicating a robust trading environment in China. Social media discussions reveal that Alibaba surged around 30% over the past week, with a notable increase in just 24 hours. Citi has raised its price target for Alibaba from 116 to 136 while maintaining a 'Buy' rating. Additionally, projections suggest a growth in earnings per share of 4% this fiscal year, with over 11% growth anticipated in the following two years. Data from the Hong Kong Stock Exchange indicates an increase in mainland investor ownership, rising from approximately 370.9 million shares to around 450 million shares. NIO Inc.'s recent surge also reflects broader market sentiment, potentially influencing movements in Alibaba's stock.

F | -3.4% | -1.4B
Ford Motor Co | Automobile Manufacturers
Shares of Ford Motor Co. have declined significantly, reflecting a broader trend in the auto sector. This movement coincides with a notable drop in Stellantis, which fell sharply after revising its FY24 financial guidance downward. Stellantis now projects an adjusted operating income margin considerably lower than previous expectations, primarily due to performance issues in North America and a deteriorating global industry outlook. General Motors also experienced a decline, further underscoring the challenging environment for automakers. Ford's underperformance relative to its sector peers is evident, as it trades lower in sympathy with these developments.

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