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Friday, September 12

Noteworthy macro moves today: Oil (WTI) +2.0%. Noteworthy US mega-cap moves today: Microsoft Corp (MSFT) +1.3%. 

Recent market movements are significantly influenced by expectations surrounding the upcoming Federal Reserve interest rate decision, with a strong consensus for a 25-basis-point cut anticipated at their meeting on September 16-17. This expectation has been bolstered by recent economic data.

In Europe, mixed performance is observed across major indices as investors react to various economic indicators. The UK economy showed stagnation in July due to declines in industrial production despite growth in services and construction sectors; this was reflected in widening trade deficits as well. Meanwhile, Germany's consumer price index rose more than expected year-on-year but remained stable month-over-month.

Asian markets followed Wall Street’s lead higher after positive sentiment stemming from U.S. labor reports that indicated cooling inflation pressures alongside increased unemployment claims—factors contributing to heightened hopes of monetary policy adjustments globally. Notably, Japan's Nikkei Index reached record highs amid gains driven primarily by technology stocks while other regional bourses also posted upward trends following favorable cues from Western markets.

United States Oil Fund LP (USO) [+2.5%]
The United States has proposed broad G-7 sanctions on Russian energy, potentially affecting global oil supply dynamics. Concurrently, WTI crude prices have risen, reaching a notable increase. However, concerns linger regarding softening U.S. demand, highlighted by an unexpected rise in crude inventories of 3.9 million barrels last week, suggesting possible oversupply issues. Additionally, Brent crude prices have seen a significant increase due to geopolitical tensions following a drone attack on Russia's Primorsk port, raising concerns about energy supply disruptions. The U.S. Labor Department reported an inflation rate of 2.5% for August alongside rising jobless claims, which has heightened expectations for interest rate cuts by the Federal Reserve next week.

WBD | +8.8% | +3.8B
Warner Bros Discovery Inc | Movies & Entertainment
Warner Bros. Discovery Inc. shares have surged significantly following reports that Paramount Skydance is preparing an all-cash bid for the company. The Wall Street Journal reported this potential acquisition, which could reshape the media landscape. Warner Bros. Discovery's stock rose notably, having increased substantially on Thursday and continuing to rise in after-hours trading. The proposed acquisition would encompass all of Warner's operations, including its cable networks and film studio. However, the merger is expected to encounter regulatory scrutiny and financial hurdles. Additionally, social media discussions have highlighted the excitement surrounding the stock's recent performance, with notable gains attributed to takeover bid rumors and expectations of further price movements.

ADBE | +2.5% | +4.0B
Adobe Inc | Application Software
Adobe Inc's stock has risen following its third-quarter earnings announcement, reporting an adjusted EPS of 5.31, surpassing the consensus estimate of 5.18. The company posted quarterly revenue of 5.99 billion, exceeding expectations of 5.91 billion, marking year-over-year increases of 14.19% in EPS and 10.72% in revenue. Adobe has raised its fiscal year 2025 adjusted EPS guidance to between 20.80 and 20.85, above the consensus estimate of 20.58, and increased its revenue outlook to between 23.65 billion and 23.70 billion. Social media discussions highlighted that Adobe achieved record revenue and noted a significant rise in Remaining Performance Obligations, which increased by 13% to 20.44 billion. The company also repurchased a substantial amount of shares during the quarter, with 99% of Fortune 100 companies adopting its AI tools.

MU | +3.3% | +5.6B
Micron Technology Inc | Semiconductors
Shares of Micron Technology Inc. rose following a price target increase from Citi, announced shortly before the market opened. This adjustment coincides with the anticipation of the company’s Q4 earnings report. Analysts have noted strong demand for Micron's memory products, contributing to the stock's upward movement. Social media discussions over the past 12 to 13 hours highlight that Micron has reached all-time highs, fueled by expectations of a memory supercycle and robust AI demand. Some posts reflect caution, suggesting that technical indicators may signal a potential peak for the stock. Additionally, Micron has frozen prices on all products for one week amid rising demand for solid-state drives, driven by AI advancements and ongoing supply constraints in DRAM and NAND markets.

MSFT | +1.3% | +49.4B
Microsoft Corp | Systems Software
Microsoft Corp's shares experienced a pre-market increase of 1.3%, following a significant announcement regarding its partnership with OpenAI. Approximately 14 hours ago, Microsoft and OpenAI signed a non-binding memorandum of understanding to advance their collaboration, which aims to enhance AI tools while ensuring safety. This announcement coincided with a nearly 2% rise in Microsoft's stock during after-hours trading, reaching $510.40. Additionally, Microsoft has agreed to settle an antitrust case concerning its Teams application by unbundling it from Office packages, allowing for separate sales and reduced pricing. This settlement concludes a regulatory probe initiated by Slack in 2019. Furthermore, discussions on social media highlighted Microsoft's plans to expand its physical infrastructure to train AI models, indicating a strategic move to compete with other tech firms in the sector.

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