Giorno: 1 Settembre 2023

(C) Reuters. FILE PHOTO: People walk past a screen displaying the Hang Seng stock index at Central district, in Hong Kong, China October 25, 2022. REUTERS/Lam Yik/File Photo

By Stephen Culp

NEW YORK (Reuters) – U.S. stock indexes settled for a mixed close and benchmark Treasury yields rebounded after a U.S. jobs report showed an uptick in unemployment, cementing expectations that the Federal Reserve will let interest rates stand at its September meeting.

The three major indexes gave up earlier advances, losing momentum as the session progressed and investors digested the data ahead of the long U.S. holiday weekend.

The S&P 500 and the Dow ended modestly green, while the tech-laded Nasdaq closed nearly unchanged.

All three indexes notched gains on the week.

“Today, people are coasting into the holiday weekend with relief that the job numbers were solid,” said Ryan Detrick, chief market strategist at Carson Group in Omaha.

“There are signs of the economy slowing, which is what the Fed wants to see,” Detrick added. “It likely opens the door for no rate hike at the next Fed meeting in three weeks.”

The Labor Department’s payrolls report showed the U.S. economy added more jobs than expected last month, but the rising unemployment and participation rates, along with a welcome cool-down in average hourly wage growth, solidified expectations that the Fed will let key interest rates stand this month.

Financial markets are pricing in a 93% likelihood of such a pause this month, according to CME’s FedWatch tool.

But what the Fed will do beyond September remains an open question.

The Dow Jones Industrial Average rose 115.8 points, or 0.33%, to 34,837.71, the S&P 500 gained 8.11 points, or 0.18%, to 4,515.77 and the Nasdaq Composite dropped 3.15 points, or 0.02%, to 14,031.82.

European stocks steadied, ending the session flat as a decline in luxury and auto shares was offset by gains in mining and healthcare. The STOXX 600 posted its biggest weekly gain since mid-July.

The pan-European STOXX 600 index lost 0.01% and MSCI’s gauge of stocks across the globe gained 0.10%.

Emerging market stocks rose 0.51%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.25% higher, while Japan’s Nikkei rose 0.28%.

U.S. 10-year Treasury yields reversed earlier declines following the employment report, as investors pared positions ahead of the Labor Day weekend.

“(The economy) might be slowing but we still have an economy led by a very strong consumer,” Detrick said. “Higher yields may be the anticipation of a better economy down the road.”

Benchmark 10-year notes last fell 23/32 in price to yield 4.1788%, from 4.091% late on Thursday.

The 30-year bond last fell 48/32 in price to yield 4.2945%, from 4.204% late on Thursday.

The greenback advanced against the euro and the yen, rising against a basket of world currencies. The dollar index registered its seventh consecutive weekly gain.

The dollar index rose 0.65%, with the euro down 0.62% to $1.0774.

The Japanese yen weakened 0.42% versus the greenback at 146.18 per dollar, while Sterling was last trading at $1.2588, down 0.67% on the day.

Oil prices jumped, touching their highest level in over seven months, driven by expectations of tightening supply.

U.S. crude surged 2.3% to settle at $85.55 per barrel, while Brent settled at $88.55 per barrel, up 1.98% on the day.

Gold prices wavered throughout the session but were last slightly higher.

Spot gold rose 0.04% to $1,940.36 an ounce.

(C) Reuters. Visitors check a Tesla Model 3 car at a showroom of the U.S. electric vehicle (EV) maker in Beijing, China February 4, 2023. REUTERS/Florence Lo

SHANGHAI/SAN FRANCISCO (Reuters) -Tesla shares fell nearly 6% on Friday after the electric automaker unveiled a restyled, China-made Model 3 with a higher price, while slashing prices of its premium vehicles and its “Full Self-Driving” (FSD) software.

The launch of the new Model 3 sedan marks the first time the automaker has rolled out a vehicle in China ahead of the United States, underscoring its growing reliance on the country where it is in a race for market share with BYD (SZ:002594).

The vehicle is being built at Tesla (NASDAQ:TSLA)’s Shanghai plant and comes with a starting price that is 12% higher than the previous, base model in China. It will also be exported to other markets in Asia, Europe and the Middle East.

Raising the base price on the Model 3, Tesla’s top-selling model after the Y, could help protect margins. But the price cuts for its more premium cars highlight the intense competition EV makers face, especially in China.

The automaker led by Elon Musk has started a price war this year that has boosted deliveries but sent its industry-leading margins to a four-year low.

The exterior design of the refreshed Model 3 does not look dramatically different from the previous one, Guidehouse Insights analyst Sam Abuelsamid said.

“The market thinks that this may not be enough” to revive sales in the face of slacking demand and rising competition, he added.

Tesla shares were trading down 5.8% at $243.06 by late afternoon, compared with a nearly flat broader market.

FSD PRICE CUT

Tesla cut the prices for its premium Model S and Model X by between about 14% and 21%, in China and the U.S. – its two biggest markets.

By dropping the starting price of the Model X to $79,990 in the United States, Tesla made the sport utility vehicle eligible for federal tax credits of up to $7,500.

Tesla’s much-touted FSD software, technology which has been in the crosshairs of regulators over safety concerns, now costs $12,000, down 20% and well below the $15,000 Musk in July said would be a low price.

Abuelsamid, who expects further reductions, said the FSD price cut was an indicator that consumers are “not convinced”, despite Musk’s argument that a car’s value increases dramatically if it’s autonomous.

“It’s nowhere close to being at the point where the driver can tune out,” Abuelsamid said.

CHINA-FIRST DEBUT

The new Model 3 is Tesla’s first change to its mass-market car line-up since it launched its global best-seller, the Model Y, in 2020.

Tesla did not announce a launch date for the new Model 3 in the U.S. where it currently offers discounts of more than $5,000 on some of those vehicles in inventory. The Model 3 is also assembled in Fremont, California.

Tesla plans to debut the latest Model 3 at a trade fair in Beijing on Saturday and some of its new features, including a rear display for back-seat passengers, seemed aimed at Chinese car buyers. It said it would also show the new model at the Munich auto show.

Images of the exterior showed small changes that gave the sedan a sleeker front and new headlights.

The new Model 3 also promises a longer driving range of 606 km (377 miles) for the standard version based on China’s testing standards, about 9% higher than the base model it replaces in China.

Tesla said it had started taking orders in China, where it would begin deliveries in the fourth quarter, and in other markets where it exports to from Shanghai, including Germany, Japan, Malaysia, Australia and New Zealand.

The new Model 3 should sell well outside China where there is less competition in EVs, said Yale Zhang, managing director at Shanghai-based consultancy Automotive Foresight.

“But in China, we have already seen plenty of new models rolling out since the (Shanghai) auto show in April with similar and even better features and lower prices,” he added.

PROJECT ‘HIGHLAND’

Reuters first reported last November that Tesla was developing a revamped Model 3 in a project codenamed “Highland”. People involved in the project said it was aimed at cutting production costs and boosting the model’s appeal.

Tesla did not give any details about the new Model 3’s battery, but a person with knowledge of the features said it was the same lithium-iron-phosphate battery from CATL for the base model.

The higher range is the result of taking weight out and improving the car’s profile so it faces less wind resistance, the person added. Tesla did not respond to a request for comment on the battery.

In China, the Model 3 competes against BYD’s Seal, the Zeekr 001 from Geely, Nio (NYSE:NIO)’s ET5 and Xpeng (NYSE:XPEV)’s P7i. Xpeng has just announced zero-interest loans and free upgrades for that car.

($1 = 7.2582 Chinese yuan, $1 = 0.9211 euro)

(C) Reuters

Investing.com — U.S. stocks were rising after labor market data that suggested the Federal Reserve could hold off on another interest rate increase when it meets on policy next month.

At 10:32 ET (14:32 GMT), the Dow Jones Industrial Average was up was up 189 points or 0.5%, while the S&P 500 rose 0.4% and the NASDAQ Composite was up 0.2%.

Wall Street’s main indices closed in a mixed fashion Thursday, but August was a difficult month for investors.

The blue-chip Dow Jones Industrial Average fell 2.4% last month, while the broad-based S&P 500 dropped 1.8% and tech-heavy Nasdaq Composite slumped 2.2%, both recording their first monthly decreases since February.

Nonfarm payrolls in spotlight

Friday’s job report for August was expected to be a major factor in the Fed’s decision making later this month.

After job openings came in lower than expected this week, today’s jobs report showed nonfarm payrolls rose 187,000 but the unemployment rate also rose to 3.8%. Analysts expected the economy to add 170,000 jobs last month, down from 187,000 the prior month, and they expected an unemployment rate of 3.5%.

The Fed has been looking for signs that the tight labor market is starting to loosen, which should help tame inflationary pressure. The rise in the unemployment rate was interpreted by investors as a sign the Fed could decide to hold steady on interest rates next month.

According to Investing.com’s Fed Rate Monitor Tool, there is now an 88% chance that the U.S. central bank will maintain the target range for the federal funds rate at 5.25% to 5.50%.

Chinese factory activity expands in August

Helping the tone Friday was the news that Chinese factory activity unexpectedly grew in August, offering hope for the economic recovery in the world’s second largest economy.

The Caixin manufacturing purchasing managers’ index came in at 51.0 for August, above the 50 level that indicates expansion, and its highest mark since February.

However, the private survey data stood in contrast to the official PMI, which came in 49.7 on Thursday, suggesting contraction.

Lululemon impresses with a “solid start” to its third quarter

In corporate news, Lululemon Athletica (NASDAQ:LULU) stock rose 4.4% after the workout gear maker said its third-quarter was off to a “solid start” thanks to strong demand in North America.

Additionally, personal computer manufacturer Dell Technologies (NYSE:DELL) raised its annual forecast for revenue and profit as it benefits from the artificial intelligence boom, while chipmaker Broadcom (NASDAQ:AVGO) forecast current-quarter revenue below expectations on softening enterprise demand. Dell stock rose 22.6% while Broadcom stock fell 4.5%.

Crude gains with producers set to extend output cuts

Oil prices rose Friday, on course to register strong weekly gains on optimism that the group of major crude producers will extend output cuts to the end of the year.

Russian Deputy Prime Minister Alexander Novak said on Thursday that Moscow had reached a new deal with its peers in the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, to further cut supplies, and will outline more reductions in production next week.

The reductions will likely add to ongoing supply cuts by Russia and Saudi Arabia, presenting a tighter supply outlook for the rest of the year.

(Peter Nurse and Oliver Gray contributed to this item.)

(C) Reuters

Investing.com — The Labor Department’s closely-watched monthly jobs report is set to headline the economic calendar on Friday, with the data likely to factor into the Federal Reserve’s future interest rate decisions. Meanwhile, a private survey shows that China’s factory activity surprisingly expanded in August, as Beijing rolls out fresh measures to help reinvigorate the country’s stuttering economy.

1. Futures inch up ahead of key jobs report

U.S. stock futures rose on Friday as investors digested a losing August on Wall Street and awaited the release of crucial nonfarm payrolls.

By 05:30 ET (09:30 GMT), the Dow futures contract was up by 115 points or 0.3%, S&P 500 futures added 13 points or 0.3%, and Nasdaq 100 futures inched up by 25 points 0.2%.

All of the main indices on Wall Street posted losses in August, with the broad-based S&P 500 and tech-heavy Nasdaq Composite slumping in particular to their first monthly decrease since February. On Thursday, the 30-stock Dow Jones Industrial Average dipped by 0.5% and the S&P 500 lost 0.2%, while the Nasdaq added 0.1%.

The moves came after economic data showed that the personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure, edged up as anticipated on an annual basis in July. Month-on-month, the PCE number held steady, pointing to a potential easing in price pressures. Meanwhile, the rate of household spending ticked higher, suggesting continued resilience in the wider economy despite a recent surge in interest rates.

Following the numbers, traders mostly stuck to their bets that the Fed will likely keep borrowing costs unchanged at its upcoming policy meeting later this month. According to Investing.com’s Fed Rate Monitor Tool, there is now an 88% chance that the U.S. central bank will maintain the target range for the federal funds rate at 5.25% to 5.50%, down slightly from a 90% probability on Thursday.

2. Nonfarm payrolls loom

The next major event on the U.S. economic calendar is scheduled to come later in the session on Friday with the publication of the August jobs report.

Economists project that nonfarm payrolls increased by 170,000 during the month after adding 187,000 in July, while average hourly earnings growth is seen moderating slightly month-on-month to 0.3%. The unemployment rate in the world’s largest economy is also anticipated to remain unchanged at 3.5%.

Separate data this week has painted a picture of a slowing, albeit tight, U.S. job market. The Fed will likely be on the lookout for more indications that this cooling is continuing, although not to the point where it threatens economic activity.

Curtailing labor demand and mitigating wage growth has been a major pillar of the Fed’s long-standing campaign of rate hikes, with policymakers hoping that these trends may help lower inflation closer to their 2% objective. Despite estimates that the central bank may soon begin to back away from the cycle, it is still uncertain what the Fed will do after its gathering this month.

The jobs report could provide some clarity to this question.

3. Chinese manufacturing activity unexpectedly grows in August – Caixin PMI

Chinese factory activity unexpectedly grew in August, a private survey showed on Friday, as manufacturers were boosted by an uptick in new orders.

The Caixin manufacturing purchasing managers’ index (PMI) read 51.0 for August, much higher than estimates for a reading of 49.3 and above last month’s reading of 49.2. A level above 50 indicates expansion, with the Caixin PMI reaching its highest mark since February. Improving local demand, aided by some monetary stimulus from the Chinese government, helped counter weakness in export-oriented businesses.

However, the Caixin data stood in contrast to the official PMI, which came in 49.7 on Thursday, suggesting contraction.

Beijing has faced growing calls to roll out stronger measures to reignite the country’s sputtering post-pandemic recovery. On Friday, authorities introduced new steps to support the local currency and prop up China’s ailing real estate sector.

4. Lululemon (NASDAQ:LULU) climbs on positive third-quarter commentary

Shares in Lululemon rose in premarket U.S. trading on Friday after the workout gear maker said its third-quarter was off to a “solid start” thanks to strong demand in North America.

The stock was initially choppy after the yogawear company posted its second-quarter results. Sales in North America jumped by 11%, although the uptick was offset by slowing quarter-on-quarter revenue growth in China.

Despite a recent pullback in customer spending on nonessential items that has hit many retailers, the Vancouver-based group has said that it has not been seeing a change in consumer behavior. Chief Executive Calvin McDonald noted in a call with analysts following the earnings that shoppers are “responding well” to back-to-school and early fall product lines as well.

Lululemon subsequently improved its full-year revenue and profit guidance, contrasting a more cautious outlook for the second half taken by other sports apparel manufacturers.

5. Oil on pace to break two-week losing streak

Oil prices were on course to register weekly gains on Friday amid optimism that the group of major crude producers will extend output cuts to the end of the year.

Russian Deputy Prime Minister Alexander Novak said on Thursday that Moscow had reached a new deal with its peers in the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, to further slash supplies, and will outline more reductions in production next week.

These reductions would likely add to ongoing supply cuts by Russia and Saudi Arabia, signalling a possibly tighter supply outlook for the rest of the year.

By 05:31 ET, the U.S. crude futures traded 0.8% higher at $84.30 a barrel, while the Brent contract climbed 0.7% to $87.47. Both contracts were up more than 3% this week, breaking two-week losing streaks.

(C) Reuters

Investing.com — The Dow on Friday notched its best week since July, as a monthly jobs report showing cooling wage growth in July, underpinned optimism that slowing inflation will likely persist and encourage the Federal Reserve keep rates steady next month.

The Dow Jones Industrial Average rose 0.3%, 116 points, taking gains for the week to 2%. The Nasdaq rose 0.1%, the S&P 500 was up 0.2%.

Jobs increase, but wage growth slow as unemployment unexpectedly ticks up in July

The economy created 187,000 jobs in July, up from 157,000 the prior month, beating economists’ estimates for 170,000.

Average hourly earnings slowed to a 0.2% pace last month from 0.4%, slower than the 0.3% economists had expected as a rise in labor supply, or the participation rate, unexpectedly pushed unemployment rate higher to 3.8% from 3.5%.

The move all but cemented bets for the Federal Reserve to keep rates steady on Sept. 20,with some on Wall Street suggesting that the Fed could be with rate hikes.

“We do not believe today’s report was strong enough to meet the bar for the Fed to hike in September and think the Fed reached the peak of this cycle in July at 5.25%-5.50%,” Morgan Stanley said in a note.

Broadcom falls despite earnings beat, but Dell shines on AI-boost infused

Broadcom (NASDAQ:AVGO) fell more than 5% even as the chipmaker reported better-than-expected quarterly results, as demand for its chips and software was boosted by growing AI demand.

The results show the chipmaker has addressed two focus areas investor concern, Deutsche Bank says, boosting revenue from AI and easing its reliance on cyclical businesses including broadband and server storage connectivity.

AI revenues jumped 50% sequentially in F4Q, Deutsche Bank saysand will make up over 25% of the firm’s semiconductor revenue in fiscal 2024.

Dell Technologies (NYSE:DELL), meanwhile, reported second-quarter results that topped Wall Street estimates and investors cheered further progress on its foray into artificial intelligence.

“At the company’s analyst day in October, we expect Dell to not only provide more clarity on the AI opportunity but also likely announce and formalize a more aggressive capital return policy,” UBS said in a note on Thursday.

Nio, Xpeng shine after deliveries rise amid growing EV demand

Nio (NYSE:NIO) closed 7% after the Chinese electric vehicle maker said it delivered 19,329 EVs in August, up 81% from the same month a year earlier.

Xpeng (NYSE:XPEV) rose 5%, meanwhile, after it reported a 43% rise in EV deliveries to 13,690 vehicles compared with the same month year earlier.

The company also said it began testing its XNGP — its driver-assistance system that automates some driving functions but still requires a driver behind the wheel — in Germany, with plans to unveil its XPENG G9 and New P7 models at the September motor show in Germany.

Tesla slumps, Disney down on Charter cable system

Tesla (NASDAQ:TSLA), however, fell 5%, after another round of price cuts in China triggered fresh concerns about margins.

Walt Disney Company (NYSE:DIS), down more than 2%, came under pressure after several of its channels including ESPN went dark on Thursday for customers of Charter’s Spectrum cable service amid a dispute with Charter over cable fees.

Charter Communications (NASDAQ:CHTR), which pays Disney about $2.2 billion in annual programming costs, said it Disney rejected its proposal for a new distribution deal at time of fierce competition from low-cost streaming services including Netflix (NASDAQ:NFLX).

(C) Reuters.

Investing.com — The U.S. economy added more jobs than projected in August, while wage gains slowed and the unemployment rate unexpectedly ticked higher, complicating the case for the Federal Reserve to keep borrowing costs on hold at its next policy meeting.

Nonfarm payrolls increased by 187,000 during the month after a heavily downwardly revised reading of 157,000 in July, according to Labor Department numbers on Friday. Economists had called for a rise of 170,000.

Average hourly earnings growth moderated slightly month-on-month to 0.2% from 0.4%, and the unemployment rate in the world’s largest economy accelerated to 3.8%.

The mixed jobs report muddles the emerging picture of a slowing, albeit tight, U.S. job market.

U.S. private payrolls increased by 177,000 in August, well below forecasts of 195,000. Nevertheless, other data showed that there were 1.51 job openings for every unemployed person in July. While the figure fell slightly from 1.54 in June, it remained well above the range of 1.0 to 1.2 that analysts say will mitigate inflationary pressures.

Fed policymakers are likely on the lookout for indications that a cooling in the labor market is continuing, although not to the point where it threatens broader economic activity.

Curtailing labor demand and moderating wage growth has been a major pillar of the Fed’s long-standing campaign of rate hikes, with policymakers hoping that these trends may help to bring down inflation closer to their 2% objective. Despite estimates that the central bank may soon begin to back away from the cycle, it is still uncertain what the Fed will do after its gathering this month.

In any event, the Fed has said it will be “data-dependent” heading into its two-day meeting from September 19-20.

On Thursday, the personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure, edged up as anticipated on an annual basis in July. Month-on-month, the PCE number held steady, pointing to a potential easing in price pressures. Meanwhile, the rate of household spending ticked higher, suggesting continued resilience in the wider economy despite the recent surge in interest rates.

Following this week’s data, traders have widely stuck to their bets that the Fed will keep borrowing costs unchanged later this month. According to Investing.com’s Fed Rate Monitor Tool, there is currently only a one-in-ten chance that the Fed will raise rates by 25 basis points at the meeting.

“The US August jobs report shows modest jobs growth, benign wage pressures and a large jump in the unemployment rate as the [labor] market slackens,” analysts at ING said in a note. “With inflation set to continue slowing, the Fed is surely not hiking interest rates in September.”