Month: August 2024

Qualcomm (NASDAQ:QCOM) Incorporated (NASDAQ: QCOM) shares surged more than 5% as the chip company reported third-quarter earnings and revenue that topped analyst estimates, alongside an optimistic guidance for the fourth quarter.

The company’s earnings per share (EPS) for the third quarter came in at $2.33, exceeding the analyst consensus by $0.08. Revenue for the quarter was also higher than expected at $9.39 billion, compared to the consensus estimate of $9.21 billion.

The positive market response was driven by both the earnings beat and the guidance for the fourth quarter of fiscal 2024, which was above analyst expectations.

Qualcomm anticipates an EPS range of $2.45 to $2.65 for the upcoming quarter, with the midpoint of $2.55 surpassing the consensus estimate of $2.45.

The company’s revenue forecast of $9.5 to $10.3 billion also beats the consensus of $9.71 billion, indicating potential continued growth.

President and CEO Cristiano Amon highlighted the successful execution of Qualcomm’s growth strategy and the high-end performance of its QCT quarterly revenues and EBT margins.

Amon also expressed enthusiasm for the launch of the Snapdragon X Series solutions for PCs, marking a significant milestone in the company’s transformation towards intelligent computing.

Federal Reserve Chairman Jerome Powell indicated a potential interest rate cut in the upcoming September meeting, a move that has been widely expected.

Powell’s dovish tone at the press conference surpassed the cautious wording of the July Federal Open Market Committee (FOMC) statement, according to economists at Evercore ISI. This suggests that the central bank is closer to reducing rates.

“[H]is comments suggest the Fed is alert to risk of more severe weakening and we think it would react aggressively if it saw scary cracks emerging,” they said.

During the presser, Powell discussed that some members of the Committee had already considered an immediate rate cut at the July meeting, although this was not the majority view.

He mentioned that recent data on inflation has boosted their confidence, and further positive data would only strengthen it.

Despite labor data showing signs of moderation, Powell stated that there isn’t substantial evidence to support a significant weakening in the labor market.

Powell emphasized that while no decision for September has been finalized, the decision would be based on a range of data, rather than a single data point. He clarified that the Fed’s decision would consider the totality of data, the economic outlook, and the balance of risks. 

“We continue to expect the Fed to cut in September and at each subsequent meeting to reach a terminal rate of 3.25-3.50% in 2025,” Citi economists wrote.

Powell is expected to provide a more definitive signal at the Jackson Hole symposium at the end of August, after considering another month’s worth of economic data.

Investing.com– Bitcoin price fell on Thursday, extending a recent decline and taking little support from a rally on Wall Street after the Federal Reserve flagged the possibility of a September interest rate cut. 

Sentiment towards crypto markets was largely constrained by fears of a mass sale event by the U.S. government, which was seen mobilizing about $2 billion worth of Bitcoin earlier this week.

A boost from crypto-positive promises from Republican presidential nominee Donald Trump also largely ran dry, after a Bloomberg poll showed Democratic frontrunner Kamala Harris wiped out Trump’s lead in seven battleground states. 

Bitcoin fell 2.9% in the past 24 hours to $64,256.2 by 02:01 ET, and had fallen as far as $63,599.5 earlier in the day. 

Fed talks rate cuts, but Bitcoin sees little price action

The Fed kept interest rates steady as widely expected on Wednesday, with Chair Jerome Powell flagging more progress towards cooling inflation and a softer labor market.

Powell explicitly mentioned the possibility of a September rate cut, especially in the event of more favorable data. His comments triggered a sharp rally on Wall Street.

Optimism over the Fed, coupled with positive earnings from the technology sector, kept traders largely biased towards equities, even as the prospect of lower U.S. interest rates presented a positive outlook for crypto.

Crypto markets thrive in low-rate environments, as increased liquidity benefits their speculative nature. 

But beyond U.S. markets, risk appetite in other parts of the globe was less enthusiastic. Japanese markets tumbled after the Bank of Japan raised interest rates and flagged more potential increases on growing resilience in the Japanese economy. The yen surged on the BOJ’s move, which put Bitcoin at a near three-week low against the currency. 

Increased geopolitical tensions in the Middle East, after the killing of a Hamas leader in Iran, also kept risk appetite frail.

Crypto price today: XRP rally stalls, altcoins sink 

Broader crypto markets tracked a decline in Bitcoin, with XRP sliding 5.7% as it reversed course from a recent rally. The token had risen sharply on unfounded rumors that Ripple, the firm that issues XRP, was close to reaching a settlement with the Securities and Exchange Commission over a long-running lawsuit. 

World no.2 token Ether fell 3.7% to $3,179.26 an ounce, while SOL and ADA lost 6.9% and 5.1%, respectively.

Among meme tokens, DOGE fell 3.9%. 

Investing.com– Most Asian stocks were muted on Thursday as Japanese shares plummeted after the Bank of Japan flagged more interest rate hikes, while a rebound in Chinese markets stalled on more underwhelming business activity data. 

Regional markets took little support from an overnight rally on Wall Street, where signals on a September interest rate cut from the Federal Reserve and some strong technology earnings powered sharp gains on Wall Street. 

US stock index futures rose in Asian trade, with focus turning to earnings from tech giants Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) later in the day. 

Nikkei 225, TOPIX plummet as BOJ flags more rate hikes 

Japan’s Nikkei 225 and TOPIX indexes slid 3.1% and 3.8%, respectively, after the BOJ struck an unexpectedly hawkish tone during its Wednesday meeting.

Governor Kazuo Ueda said the bank will continue to raise interest rates after a 15 basis point hike on Wednesday, especially if the economy and inflation continue to improve in line with the BOJ’s outlook.

Japanese stocks had initially reacted positively to the BOJ meeting, given that the bank struck a somewhat dovish tone by setting a prolonged timeline for reducing its bond buying program.

But Ueda’s comments, which came after the market close, indicated that the central bank was closer to ending its decades of stimulative measures earlier than initially expected.

“If the economy and prices move in line with our projection, we will continue to raise interest rates,” Ueda said at a press conference. “We don’t see 0.5% as any key barrier when raising rates.” 

The BOJ’s benchmark short-term rate stood around 0.25% after Wednesday’s hike.

China rebound stalls on more negative PMI data 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes moved in a flat-to-low range after rebounding from more-than five-month lows in the prior session. Hong Kong’s Hang Seng index fell 0.2%. 

Caixin purchasing managers index data on Thursday showed an unexpected contraction in China’s manufacturing sector. The reading came just a day after government PMI data showed a similar trend. 

The Caixin PMI was a major pain point, given that it had so far in 2024 painted a more positive picture of China’s manufacturing sector. But Thursday’s reading brought up concerns over a broader slowdown in the sector. 

While the weak PMIs and positive comments from Beijing had fueled bets on more stimulus- in part sparking Wednesday’s rebound in Chinese markets- persistent caution over an economic slowdown kept investors mostly averse towards Chinese stocks.

Broader Asian markets were marginally positive, tracking overnight strength on Wall Street. 

Australia’s ASX 200 rose 0.4%, briefly hitting a record high at 8,148.70 points after some soft inflation readings from the country triggered a rally on Wednesday.

South Korea’s KOSPI rose 0.4%, with local chipmaking stocks tracking gains in their U.S. peers. Taipei shares of TSMC (TW:2330) rose nearly 2%.

Futures for India’s Nifty 50 index pointed to a flat open, as the index struggled to make new highs above 25,000 points.

Investing.com–The S&P 500 notched its biggest gain since February on Wednesday, as the Federal Reserve kept rates unchanged, though signaled that it that potential cut in September was on the table. 

At 16:00 ET (20:00 GMT), the S&P 500 Futures gained 1.5%, and Nasdaq 100 Futures climbed 2.6%, the Dow Jones Futures rose 99 points, or 0.2%. 

Fed gives nod to inflation progress after keeping rates steady 

The Federal Reserve left interest rates unchanged Wednesday, but acknowledged recent progress on inflation and cooling in the labor market, stoking investor hopes that the central bank could begin cutting rates sooner rather than later.

“We think that the time [for a rate cut] is approaching … if we do get the data that we hope we can, then a reduction in our policy rate could be on the table in September,” Fed chairman Jerome Powell said Wednesday in the press conference that followed the policy decision.  

Futures are almost fully pricing for a quarter-point easing in September, with a small chance of a reduction of 50 basis points, and have 66 basis points of easing priced in by Christmas.

AMD leads chip, tech stocks higher offsetting Microsoft stumble

Advanced Micro Devices Inc (NASDAQ:AMD) gained 5% after the chipmaker reported better-than-expected Q2 results, underpinned by record data center revenue as customers including Meta and Microsoft continued to ramp up orders.  

“The tone on data center GPU was very solid, especially around customer breadth as we think both OCI and META are now ramping strongly alongside MSFT – w/shipments starting shortly to TSLA and very strong momentum with enterprises,” UBS said in a note.

As well AMD results, sentiment on chips were boosted by surge in ASML Holding NV (AS:ASML) ADR (NASDAQ:ASML) after Reuters reported that the dutch chip equipment maker and other allies in Japan and South Korea could likely be excluded from U.S. ban on chipmaking equipment to China. 

NVIDIA Corporation (NASDAQ:NVDA) jumped nearly 13% and Qualcomm Incorporated (NASDAQ:QCOM) jumped 8%.

Microsoft (NASDAQ:MSFT) stock cut some losses to fall 1% after its fourth-quarter cloud revenue growth missed expectations. 

While the firm’s overall earnings just edged past estimates for the June quarter, revenue from Azure, the company’s cloud business, grew 29%, missing estimates of 30.2% and also slowing from the 31% rise in the prior quarter. This came even as investment in AI saw capital expenditure surge by $5 billion in the quarter. 

Meta Platforms (NASDAQ:META) becomes the latest of the mega-cap tech giants to release quarterly results this week, after the close.

Meta, which owns and operates Facebook, Instagram, Threads, and WhatsApp, among other products and services, is expected to report a 20% rise in quarterly revenue.

Starbucks earnings meet expectations, T-Mobile, Match Group surprise on earnings stage

Starbucks (NASDAQ:SBUX) stock rose nearly 3% after the coffee chain met expectations for quarterly profit, even as its global sales declined on persistent weakness in consumer spending in its top markets of the U.S. and China.

T-Mobile US (NASDAQ:TMUS) stock rose 4% after the telecoms giant after the telecoms company raised its full-year forecast for monthly bill-paying phone subscriber additions as more customers opted for its discounted unlimited plans that include streaming perks.

Pinterest (NYSE:PINS) stock fell more than 14% after the social media service offered a softer-than-expected outlook for its third quarter, despite achieving a record 522 million global monthly active users, marking a 12% increase from the previous year.

Match Group (NASDAQ:MTCH) stock soared 13% after the online dating service recorded a second-quarter revenue beat and announced plans to lay off about 6% of its staff to cut costs.

(Peter Nurse, Ambar Warrick contributed to this article.)

Investing.com– UBS said Chinese equities were its most preferred pick within Asia, with the brokerage forecasting strong single-digit returns by end-2024 on an improved earnings outlook and more policy support.

UBS said that China’s major internet firms were set for stronger earnings, especially e-commerce majors such as Alibaba Group Holdings (NYSE:BABA) and JD.com Inc  (NASDAQ:JD). Both companies were likely to benefit from sustained strength in online retailing, and could also see improved consumer demand as the Chinese economy stabilizes. 

Chinese internet giants were also trading at significant discounts after logging steep losses over the past three years.

Beyond internet firms, UBS said exposure to defensives such as financials, utilities, energy and telecom stocks made for a balanced position in Chinese markets. The brokerage also said that Chinese stocks were offering attractive dividend yields across the board.

“We suggest investors add growth exposure in the near term while maintaining some exposure to the defensive segment, which should provide more resilient earnings and attractive dividend yields,” UBS analysts wrote in a note. 

Measures from Beijing to further support the economy- especially the beleaguered housing market- presented a better outlook for China’s economy. But while Beijing has unveiled measures to support the property, analysts have warned in recent weeks that the government’s execution will be key to a recovery. 

Chinese markets were nursing steep losses in recent weeks as a swathe of weak economic readings drummed up concerns over a recovery. The country’s benchmark Shanghai Shenzhen CSI 300 and Shanghai Composite indexes both slid to more-than five-month lows earlier this week.

While the Third Plenum of the Chinese Communist Party and a meeting of the Politburo did offer some positive comments on more stimulus support, investors remained largely cautious over how the planned measures will be executed. 

A series of surprise interest rate cuts in July also failed to generate much optimism over China. 

UBS said that in the medium to longer term, investors should “position themselves for a slowing growth environment .”