The Bear is everywhere. There are no positive factors on the markets that can induce stocks to rise: from the disappointment for the expected press conference of the authorities in Beijing that should have given details of the stimulus plan, to the decline of Wall Street, to the tensions in the Middle East.
The New York Stock Exchange is trading in decline, with a 0,94% decline on Dow Jones; along the same lines, widespread sales on theS&P-500, which closed the day down 1% at 5.696 points. All the sectors of the S&P 500 fell. At the bottom of the S&P 500 basket, significant declines were seen in the utilities (-2,32%), telecommunications (-1,97%) and consumer secondary (-1,92%) sectors.
Also in red Nasdaq 100 (-1,17%) even if Nvidia rises by 2,29%, while under pressure is Tesla Motors, with a sharp decline of 3,70%. Along the same lines, the S&P 100 is down (-1%).
China Explodes, Then Backtracks, Disappointed by Lack of Details on Stimulus Action
Investors hoping for a dramatic resumption of China’s stock rally following a week-long holiday in mainland China were left disappointed today after Beijing’s policymakers offered only broad strokes about their stimulus plans in a press conference that had been widely expected to provide major details. The National Development and Reform Commission (NDRC) said only that it was “fully confident” it would achieve its goals, but did not provide any of the details investors want about China’s aggressive stimulus measures.
“Tuesday’s press conference by China’s top economic planner should have been the big moment, when Beijing unleashed a stimulus bazooka,” Stephen Innes, managing partner at SPI Asset Management, said in a note. “It’s clear the market wanted more and Beijing’s reluctance to launch a larger package is raising serious questions about the sustainability of this rally,” Innes added.
Beijing is struggling to sustain growth when it is the 2024 GDP target of “around 5%” is at risk, according to many analysts, due to the deep real estate crisis, the risk of deflation, weak consumption and youth unemployment which jumped to 18,8% in August.
The key stock indices of the Mainland China, After a week of vacation, they reopened trading with a bang, marking two-year highs and gains of up to 10%, but then the gains were quickly pared and the CSI 300 index of the Shanghai and Shenzhen stock exchanges is up 6%.
Hong Kong and Tokyo in sharp decline. In Korea Samsung -1,5%
In stark contrast to mainland China, the actions of Hong Kong they showed a stormy sea of red, with the Hang Seng index dropped by more than 10% at one point before recovering to -8%.
Analysts initially attributed the divergence to Chinese stocks trying to catch up as Hong Kong surged while mainland China was on holiday, but it soon became clear that markets were disappointed by Beijing's lack of specific stimulus measures.
La Tokyo stock exchange is affected by the US closing down: the Nikkei index is at -1,3%. The dollar-yen exchange rate is little changed at 148. In Japan, the basic salaries of workers grew at a record pace in August, up 2,9 percent year-on-year, accelerating from 2,6 percent in July, the Labor Department said. The trend was less favorable for real wages, decreased after having grown in the last two months, furthermore, another report showed that the household spending has fallen. Wage trends are one of the indicators most closely monitored by the government and the Bank of Japan in the hope that they will stimulate consumption and put an end to deflation.
The bag of South Korea is down 0,5%. Samsung Electronics falls 1,5% after reporting quarterly data that fell short of estimates. The electronics giant apologized to investors for disappointing results. Jun Young-hyun, newly appointed head of the core semiconductor business, promised to overhaul the organization. In another filing, Korea's largest company acknowledged delays in shipping a key type of chip used with Nvidia's processors to train artificial intelligence, problems that have allowed rival SK Hynix to dominate the arena of so-called high-bandwidth memories.
Oil Retreats, but Focus Remains on the Middle East
I oil prices fell on Tuesday, partly because of events in China, although it was also due to a slight reversal from a strong rally earlier in the week on developments in the Middle East. Hezbollah fired rockets into Haifa and Israel looked set to expand its offensive in Lebanon, while Hamas vowed to rise “like a phoenix” a year into the war. In addition, the Iranian military drew up 10 possible response scenarios if Israel followed through on its threats to attack the country. Concerns about disruptions to oil supplies from Iran had sent Brent crude and U.S. crude futures up more than 10% in the past month. Texas crude was down 1,5% at $76 a barrel today.
European stocks seen opening lower
The decline seen in the US, disappointment over Chinese stimulus and fears of an escalation in the Middle East are infecting European stock markets which are seen opening lower, based on futures: EUROSTOXX 50 futures are down 1,1%.
In Germany Industrial production in August recorded a +2,9% month-on-month, well above the consensus estimate of +0,6% month-on-month and a clear recovery from the previous figure of -2,4% month-on-month. On an annual basis, however, it fell by 2,7%
Essilor Luxottica is shopping in Asia and investing around 180 million to acquire 5,2% of Nikon. The entry dates back to August and only with the latest purchases has the threshold been exceeded. The market is now awaiting the arrival of the giant Meta in the eyewear giant
stellantis said it has filed eight additional lawsuits against the United Auto Workers and 23 local units, alleging the union violated its contract by threatening to strike over the company's delays in planned investments. Meanwhile S&P ha revised outlook to negative for the collapse of profitability in 2024 and affirmed the BBB+/A-2 ratings on the automotive group.
stm could be affected by the fact that Samsung Electronics presented quarterly data below expectations and that Bernstein cut the target price from 38 to 32 euros.
Unieuro. Fnac Darty has reduced the minimum threshold to join the takeover bid from 90% to 66,67% of the company's capital, reflecting the determination of Fnac Darty and Ruby to successfully complete the public offering on the company.
On the agenda today
The trade balance for August is on the agenda at 14 pm. United States (previous: -78,8 billion dollars) and at 14:55 the weekly Redbook index (previous: +5,3% year-on-year). In addition, the Ecofin meeting attended by the Vice President of the ECB, Luis de Guindos. Speeches by some representatives of the ECB (Schnabel and McCaul) and of the Fed (9am Kugler, 18pm Bostic and 45pm Collins).