Weekly News Recap 30 September – 4 October 2024

News for 30 September 2024

Gold Faces Profit-Taking Pressure Towards the End of the Week

Towards the end of the week, gold prices weakened, closing at $2,658/oz. This was due to some investors gradually reducing their positions ahead of the U.S. labor market data to be released this week, putting pressure on gold prices.

The U.S. Chicago PMI manufacturing index, forecast at 46.1, will be announced on September 30th at 20:45.

The shrinking U.S. inflationary trend is expected to support the Fed in continuing its gradual rate cuts.

U.S. PCE Index for August Rises 2.2%, Below Expectations

The U.S. Commerce Department revealed on Friday, September 27, that the headline Personal Consumption Expenditures (PCE) index, which includes food and energy, increased by 2.2% year-over-year in August. This was lower than analysts’ expectations of a 2.3% rise, down from 2.5% in July. Every month, the PCE index rose by 0.1% in August, also below the forecasted 0.2% increase, and compared to 0.2% in July.

Alibaba and Tencent Stocks Surge on China’s Economic Stimulus

CNBC reported that Alibaba shares surged in U.S. trading on Thursday (September 26), closing above $100 per share for the first time since August of the previous year, after gaining 10% during intraday trading. On Friday, in Hong Kong, Alibaba shares rose nearly 5% to HKD 102.50 per share, marking the highest level since February 2023. For the entire week, Alibaba shares climbed around 18% in the Hong Kong market.

Meanwhile, Tencent, the tech giant behind WeChat and one of the world’s largest gaming companies, saw its stock rise nearly 2% to HKD 437.80 per share, the highest closing price in over two and a half years. This surge follows a 49% increase in Tencent’s stock price this year, fueled by the recovery of its core gaming business.

News for 1 October 2024

Gold Prices Weaken Amid Strong U.S. Data and Dollar Rebound

Gold prices softened as the U.S. Chicago PMI came in stronger than expected at 46.6, while the U.S. Dollar index rebounded from 100.48 to 100.75, putting pressure on gold. 

On October 1, the U.S. Manufacturing PMI will be released at 20:45, with expectations of 47.0, followed by the JOLTS job openings data at 21:00, projected at 7.64 million. 

Throughout the day, gold faces continued profit-taking pressure from the previous week’s gains, with prices expected to trade in a sideways-down pattern.

Fed May Cut Rates by 0.50% by Year-End if Economy Meets Expectations

In a speech at the NABE conference on September 30, Powell indicated that the Fed is likely to reduce interest rates by 0.25% twice, totaling 0.50%, by the end of this year if the economy develops as expected. He emphasized that the Fed will not rush these actions, after receiving new data that boosted confidence in continued economic and consumer spending growth.

European Auto Stocks Plunge After Major Companies Cut Profit Forecasts

On September 30, the European STOXX 600 index closed at 522.89 points, down 5.19 points or -0.98%, reflecting a market correction in the region, particularly in the auto sector, which faced heavy selling pressure.

Other major European indices also saw declines:

• France’s CAC 40 index closed at 7,635.75 points, down 156.04 points or -2.00%.
• Germany’s DAX index closed at 19,324.93 points, down 148.70 points or -0.76%.
• London’s FTSE 100 index closed at 8,236.95 points, down 83.81 points or -1.01%.

The primary reason for the downturn was the reduced profit forecasts by leading European automakers. Stellantis (STLAM), the second-largest automaker in the region, plunged 14.7% after announcing a reduction in this year’s profit forecast, along with a warning of higher-than-expected cash usage.

Additionally, Volkswagen AG (VOW) shares fell 4.3% after cutting its profit outlook for the second time in less than three months, leading to heavy selling across the auto sector.

News for 2 October 2024

Gold Rises as Iran’s Missile Strikes Boost Safe-Haven Demand

On October 1, gold prices closed at $2,663/oz, driven by renewed concerns over the Middle East situation after Iran launched over 200 missiles in retaliation against Israel. As a safe-haven asset, gold saw increased buying activity. 

On October 2, the U.S. private sector employment data will be released at 19:15, with expectations of 124k jobs added. However, this rebound is anticipated to not reach new highs.

U.S. Job Openings Exceed Expectations in August

The U.S. Labor Department’s JOLTS report revealed that job openings, a key indicator of labor demand, increased by 329,000 to 8.04 million in August, up from 7.71 million in July and surpassing analysts’ expectations of 7.66 million. New hires fell to 5.32 million, while layoffs decreased to 1.61 million.

News for 3 October 2024

Gold Slightly Weaker, Awaiting Catalysts Amid Potential U.S.-Iran Tensions

On October 2, gold dropped to $2,658/oz due to stronger-than-expected U.S. private sector job data, which came in at 143k, alongside a rebound in the U.S. Dollar Index to 101.60, putting pressure on gold prices. 

Looking ahead, U.S. weekly jobless claims are expected at 222k, and the services PMI is forecasted at 51.7 on October 3. Market watchers expect U.S. labor data to show a gradual recovery, aligning with market trends. Investors are also waiting for potential catalysts, particularly if tensions between Israel and Iran escalate.

Tesla Reports 462,890 Deliveries in 3Q24, Below Expectations, Pressuring Stock

On October 2, Tesla (TSLA) released its production and delivery figures for Q3 2024, with production reaching 469,796 units (+9% YoY, +14% QoQ) and deliveries totaling 462,890 units (+6% YoY, +4% QoQ). Of these, Model 3/Y accounted for 439,975 units, while Model X and S combined for 22,915 units.

However, the results fell short of analyst expectations, which estimated deliveries at 463,000 units. This led to a decline in Tesla’s stock, dropping $249.02 (-3.49%) on October 2. Despite the dip, the outlook for the industry is improving, and Tesla’s upcoming Robotaxi launch on October 10 is expected to boost revenue in Q4 2024.

News for 4 October 2024

Gold Slightly Weakens, Awaiting Non-Farm Payrolls Tonight (Oct 4)

On October 3, gold prices softened, closing at $2,656/oz, as the U.S. services PMI came in stronger than expected at 54.9, along with a rise in the dollar index to 101.94, which pressured gold prices. 

Tonight, on October 4, key U.S. labor market data will be released, including the Non-Farm Payrolls and the unemployment rate for September, with estimates of 147k jobs added and a 4.2% unemployment rate. Gold may experience some volatility as investors await these figures.

Stellantis Shares Drop 4% After Dividend Cut Announcement

Shares in the automotive sector fell 2.1%, with Stellantis (Italy) seeing a significant 4% decline. The drop followed CEO Carlos Tavares’ announcement that the company may reduce dividends and slow down share buybacks in the coming year due to economic factors and strategic planning. Additionally, Barclays downgraded its investment rating on Stellantis, further dampening investor sentiment.

Tesco Raises Full-Year Profit Forecast After 10% Surge in H1

Tesco, the UK’s largest supermarket, raised its full-year profit forecast on October 3 after reporting a 10% increase in first-half profits, driven by a market share gain. This has positioned the company with strong momentum heading into the important holiday season.

Tesco has revised its full-year profit forecast for the 2024/25 financial year, now expecting adjusted operating profit from its retail division to be around £2.9 billion ($3.8 billion), up from the previous estimate of at least £2.8 billion. This increase reflects the company’s improved performance and market share gains.

Microsoft Revenue Up YoY, Down QoQ

Microsoft (MSFT) reported a 10% year-over-year (YoY) increase in revenue, although it saw a slight decline of 3% quarter-over-quarter (QoQ). Despite the revenue drop, earnings per share (EPS) grew both YoY and QoQ, with a 6% increase compared to last year and a 2% rise compared to the previous quarter. 

The company also announced a $1 billion investment in OpenAI, which is expected to drive long-term growth, particularly in the artificial intelligence (AI) sector, offering substantial potential for future expansion.