Weekly News Recap 9 – 13 September 2024

News for 9 September 2024

Gold Weakens at Market Close

At the end of last week, gold prices softened, closing at $2,497/oz. The decline was driven by a drop in the U.S. unemployment rate for August to 4.2%, down from 4.3% in July. Additionally, the U.S. Dollar Index rebounded, closing at 101.18, with the stronger dollar putting pressure on gold prices.

China’s Inflation Below Expectations as Deflationary Pressures Mount

China’s National Bureau of Statistics (NBS) reported that the Consumer Price Index (CPI), which measures inflation in consumer spending, rose by 0.60% year-on-year in August 2024. This was below analysts’ expectations of a 0.70% increase, as a Reuters survey revealed weak domestic demand.

Meanwhile, the Producer Price Index (PPI), a measure of factory-gate prices, fell by 1.80% in August 2024, marking the 23rd consecutive monthly decline and exceeding analysts’ forecast of a 1.40% drop.

Yi Gang, former Governor of the People’s Bank of China, warned during a meeting on Friday, September 6, 2024, that China should closely monitor deflationary pressures. He also projected that the CPI could rise slightly above 0% by the end of the year.

News for 10 September 2024

Gold Rebounds Above $2,500/oz

On September 9, gold prices rose, closing at $2,506/oz. This increase was driven by market expectations of a potential slowdown in U.S. inflation, boosting hopes for a Federal Reserve rate cut later this week, supporting the rise in gold prices.

This week, attention will be on the U.S. inflation report for August, with expectations at 2.6%.

However, considering the continuous decline in oil prices over the past two months, U.S. inflation may weaken further and come in below forecasts.

Analyst Suggests a 0.25% Fed Rate Cut is Appropriate

Jeffrey Rosenberg, an analyst at BlackRock, stated that investors currently view a 0.25% interest rate cut as appropriate. He explained that if the Federal Reserve were to cut rates by 0.50% at this meeting, it could signal greater concerns about the direction of the U.S. economy.

Apple Launches iPhone 16 – AAPL Stock Remains Stable

On September 9, Apple Inc. officially launched the new iPhone 16.

Key changes include:

• The iPhone 16’s starting price is 9% lower, at 29,900 THB, compared to the iPhone 15, which starts at 32,900 THB.
• The operating system has been upgraded to iOS 18 from iOS 17.
• The chip has been upgraded to the A18 Bionic, providing better and faster performance, with support for the new Apple Intelligence feature, compared to the A16 Bionic in the previous model.
• The main camera has been upgraded to a Fusion Camera 48MP (f/1.6), supporting ultra-high-resolution photos (24MP and 48MP) and 2x telephoto capabilities, with optical image stabilization. A new “Camera Control” button for quicker photo capture has been added.

However, after the market closed, Apple (AAPL) stock rose to $220 (+0.09 or +0.041%), while pre-market trading saw a slight dip of -0.030 (-0.014%). The price reduction of 7-9% is seen as mildly positive, with expected sales volume growth, though the gross margin may face pressure, potentially declining from 46.60% to 46.30%. At the same time, SG&A expenses are expected to increase, which could further impact net profit margins.

News for 11 September 2024

Gold Rebounds as Investors Anticipate Lower U.S. Inflation

On September 10, gold prices rose, closing at $2,516/oz. This increase was driven by investor expectations that the U.S. Consumer Price Index (CPI) might weaken, in line with recent declines in oil prices. Such trends could signal that the Federal Reserve may gradually reduce interest rates this year.

On September 11 at 7:30 PM, the U.S. inflation data for August is set to be released, with a forecast of 2.5%. Gold prices are expected to remain steady in a continued upward trend.

U.S. Bank Stocks Fall Amid Warnings from Goldman Sachs and JPMorgan

U.S. bank stocks dropped as Goldman Sachs and JPMorgan issued warnings that raised concerns about the sector’s earnings. The warnings overshadowed positive news about potential regulatory relaxations by the Federal Reserve on capital requirements for large banks.

Bank stocks declined following David Solomon, CEO of Goldman Sachs, predicting a 10% drop in trading revenues for the quarter. Additionally, JPMorgan revised its interest income forecast downward.

Huawei Takes on Apple with New Mate XT Smartphone

Huawei has launched its Mate XT smartphone, featuring advanced AI capabilities such as text translation and cloud content creation. The device offers versatility with single, dual, or triple-screen modes. When unfolded, the Mate XT measures just 3.6 mm thick with a 10.2-inch display, and the battery is 1.9 mm thick. It also supports a foldable keyboard.

The Mate XT is available in red and black, with three storage options, priced between 19,999 and 23,999 yuan ($2,809 to $3,371). According to Huawei’s website, the company has already received over 3.5 million pre-orders for the Mate XT.

(Preview) Micron Technology (MU) Earnings Report for 4Q24 on September 25

Micron Technology (MU) is set to announce its 4Q24 earnings on September 25. The company is expected to report a revenue increase to $7.68 billion, up 92% YoY and 13% QoQ, with earnings per share (EPS) rising to $1.11, a 79% QoQ increase. This growth is attributed to a rise in DRAM and NAND revenues, projected to reach $5.4 billion and $2.3 billion, respectively. Gross margin is anticipated to improve from 28% in the previous quarter to 34.5%, while operating expenses may increase by $1.06 billion, a smaller proportion relative to the revenue growth.

The 4Q24 results are expected to be a peak for the year, with a more positive outlook compared to 4Q23, when revenue contracted and profit was negative. At current sales prices, the projected P/E ratio for EPS in 4Q24 and 1Q25 is around 22 times, compared to the historical P/E range of 30-40 times.

News for 12 September 2024

Gold Slightly Declines as Fed Rate Cut Expectations Adjust

On September 11, gold prices eased, closing at $2,511/oz. The decline was driven by the U.S. August inflation data, which fell to 2.5% from 2.9% the previous month. Market expectations have shifted, with the Federal Reserve now anticipated to cut rates by only 0.25%, compared to earlier predictions of a 0.50% cut. This adjustment strengthened the dollar, putting pressure on gold prices.

On September 12 at 7:30 PM, the U.S. Producer Price Index (PPI) and Core PPI are set to be announced, with forecasts at 0.1% and 0.2%, respectively.

NVIDIA Soars 8% as U.S. Considers Allowing AI Chip Exports to Saudi Arabia

Tech stocks surged, led by NVIDIA, which jumped 8% following a Semafor report that the U.S. government is considering permitting NVIDIA, a major U.S. AI chip maker, to export advanced chips to Saudi Arabia.

Trump’s Chances Diminish in U.S. Election Race

PredictIt, a political betting website, shows Kamala Harris as the favored candidate to win the presidential election following the debate, with odds rising to 57 cents, up from 53 cents before the debate. This implies a payout of $1 for every 57 cents wagered if Harris wins. In contrast, Trump’s odds have decreased to 48 cents, down from 52 cents.

CNN’s latest poll indicates that Harris, the Democratic candidate, now leads Trump, the Republican candidate, by 63% to 37%, a significant shift from the previous 50% to 50% split before the debate.

News for 13 September 2024

Gold Hits New High

On September 12, gold prices reached a new high of $2,558/oz. This peak was driven by market expectations of a Federal Reserve rate cut next week, following a softening in U.S. inflation. Additionally, the U.S. Dollar Index fell from 101.77 to 101.23, with the weaker dollar supporting the rise in gold prices.

On September 13 at 9:00 PM, the U.S. Michigan Consumer Sentiment Index is set to be released, with a forecast of 68.3.

IMF Supports Fed Rate Cut Next Week – ECB Cuts by 0.25%

On September 12, the Dow Jones closed at 41,096.77, up 235.06 points or 0.58%; the S&P 500 closed at 5,595.76, up 41.63 points or 0.75%; and the Nasdaq closed at 17,569.68, up 174.15 points or 1.00%. The rally followed the International Monetary Fund (IMF) suggesting that it is appropriate for the Federal Reserve to begin easing monetary policy at its meeting next week, as inflation risks have diminished, with U.S. inflation falling from 2.9% in July to 2.5% in August.

On September 12, the European Central Bank (ECB) reduced interest rates by 0.25%, in line with market expectations and marking the second rate cut of the year. Berenberg Bank analysts anticipate that the ECB will hold rates steady at its next meeting on October 17, with a further 0.25% cut expected at the December 12 meeting.

Global financial markets may see increased stability, with gold continuing to hit new highs and tech stocks signaling a rebound.