Overnight US Stocks | Dow Jones, S&P 500 Index, Gold Price Hit Record Highs Again Tesla Rises 4.9%

According to Zhitong Finance, on Monday, the three major indices rose, with the Dow and S&P 500 hitting new closing highs. Several Federal Reserve officials on Monday did not rule out the possibility of further significant interest rate cuts, pointing out that current rates still pose a heavy burden on the U.S. economy. Fed's Kashkari hinted at supporting another 50 basis point rate cut this year, while Chicago Fed President Evans stated that rates need to be significantly lowered.

[US Stocks] At the close, the Dow rose 61.29 points, or 0.15%, to 42,124.65 points; the Nasdaq rose 25.95 points, or 0.14%, to 17,974.27 points; the S&P 500 rose 16.02 points, or 0.28%, to 5,718.57 points. Tesla (TSLA.US) rose 4.9%, Intel (INTC.US) rose 3.3%, and Apple (AAPL.US) fell nearly 1%. The Nasdaq Golden Dragon Index closed up 1.3%, while Alibaba (BABA.US) rose 2%.

[European Stocks] The German DAX30 index rose 114.59 points, or 0.61%, to 18,845.45 points; the UK's FTSE 100 index rose 29.20 points, or 0.35%, to 8,259.19 points; the French CAC40 index rose 7.82 points, or 0.10%, to 7,508.08 points; the Euro Stoxx 50 index rose 14.31 points, or 0.29%, to 4,885.85 points; the Spanish IBEX35 index rose 53.25 points, or 0.45%, to 11,806.55 points; the Italian FTSE MIB index fell 76.25 points, or 0.23%, to 33,686.00 points.

[Asia-Pacific Stock Markets] The Nikkei 225 index rose 1.53%, the Indonesia Jakarta Composite Index rose 0.42%, and the Vietnam VN30 index fell 0.37%.

[Gold] Spot gold rose 0.5% to $2,634.90 per ounce, surpassing the historical high set last Friday. Gold has been on the rise since the Fed cut rates by 50 basis points last week. Prior to this, the precious metal had repeatedly hit record highs this year.

[Cryptocurrency] Bitcoin slightly fell to $63,124.9 per coin. U.S. presidential candidate He Jinli mentioned cryptocurrencies for the first time last Sunday. He Jinli stated that she will "encourage innovative technologies such as artificial intelligence and digital assets, while protecting consumers and investors."

[Crude Oil] U.S. WTI crude oil futures prices fell 0.9% on Monday. Disappointing business activities in the Eurozone have exacerbated concerns about weak energy demand. The November-delivery West Texas Intermediate (WTI) crude oil futures price on the New York Mercantile Exchange fell 63 cents, or 0.9%, to $70.37 per barrel. Today's economic data indicated that the dominant service sector in the Eurozone remained flat, while the decline in manufacturing accelerated, indicating a surprisingly sharp contraction in Eurozone business activities in September.

[Metals] London metals closed higher, with zinc up 0.56%, copper up 0.53%, and nickel up 0.46% [Macro News]

Stable Business Activity in the US in September, with Rising Price Pressures. Data from the September S&P Global PMI in the US shows that business activity in the US remains stable, but average prices for goods and services have risen at the fastest pace in six months, possibly indicating a warming inflation in the coming months. The September PMI data is consistent with the data released this month, including retail sales, indicating that the US economy maintained strong growth momentum in the third quarter. However, the uncertainty of the November 5th presidential election is affecting business confidence. The service sector continues to expand steadily, but manufacturing has fallen to a 15-month low. The average prices for goods and services have risen at the fastest pace since March, marking the first acceleration in sales price inflation in four months. The increase in costs (mainly related to rising service costs associated with wage increases) is believed to be the cause of this growth. On the surface, this may imply that price pressures are building up again, but more and more evidence suggests that inflation is cooling down.

Chicago Fed President: Interest Rates Need to Continue to Fall to Achieve an "Soft Landing" for the Economy. Chicago Fed President Guersby stated at a meeting on Monday that in order to achieve a "soft landing" for the economy, interest rates need to continue to fall. Despite a significant decline in inflation and a softening labor market, even after the Fed cut its target rate by 50 basis points last week, rates are still near their highest level in 20 years. Guersby, who has been the Chicago Fed President since January 2023 and will have voting rights on the Federal Open Market Committee (FOMC) next year, said at the annual meeting of the State Treasurers Association in Chicago, "What I have seen in the past two years is a significant decline in inflation, but it has not triggered an economic recession, which is unprecedented in the US and even globally." He added, "Now the unemployment rate is slowly rising to 4.2%, and many people believe this is a fundamentally stable level of full employment, which is the state we hope the unemployment rate will maintain." Guersby pointed out that if monthly inflation data continues at the current pace, the inflation rate will meet the Fed's 2% annual target in a year. He also stated that real-time economic activity indicators show steady growth in GDP in the third quarter.

Fed's Kashkari: Lowering Rates by 50 Basis Points is the Right Move. Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, stated that the Fed's decision to lower rates by half a percentage point last week was the right one. Previously, the Fed had kept rates at a multi-decade high for over a year, but last week lowered the target range for rates by 50 basis points to 4.75% to 5.00%, the first rate cut since March 2020. However, the rate cut decision was not unanimously agreed upon, with Fed Governor Michelle Bowman leaning towards only a 25 basis point cut. In an article, Kashkari mentioned that the Fed's main policy tool - the federal funds rate - should be lowered, as the risk balance has shifted from high inflation to further weakening in the labor market. However, overall policy stance remains tight. Kashkari is not one of the 12 Fed policymakers with voting rights this year, but until recently, he has been seen as a relatively hawkish member among Fed policymakers Impending Massive Strike at U.S. Ports Threatens to Disrupt Supply Chains Amid Pandemic. Just as U.S. policymakers shift their focus from curbing inflation to boosting the job market, the economy faces turmoil that could lead to a resurgence of supply chain disruptions and consumer dissatisfaction seen during the pandemic. This imminent impact comes as a contentious election looms just weeks away. Around 45,000 dockworkers at major ports on the East Coast and Gulf of Mexico are threatening to strike on October 1st. With negotiations deadlocked since June, industry officials now see a strike as inevitable, prompting ocean carriers and port operators to start notifying customers and devising contingency plans. Over half of the containerized goods entering and leaving the U.S. pass through the trade gateways affected by the strike. Estimates suggest that a week-long strike could result in economic losses of up to $7.5 billion. Analysts warn that as port congestion reduces capacity and drives up freight rates, the resulting chain reaction will have global repercussions.

Goldman Sachs Top Trader: U.S. Stocks Still in Bull Market, but Room for Error is Quite Small, Risk/Reward Not Very Appealing. Goldman Sachs' top trader Tony Pasquariello points out that in the past forty years, there have been five instances where an economic recession did not follow after five rate cuts by the Federal Reserve. On average, the S&P 500 index has risen by 17% in the 12 months following the first rate cut. However, in the current rate-cut cycle, with U.S. GDP growth hovering around a robust 3%, the Dow and S&P indices have reclaimed historical highs, making the current stock market, especially the tech-heavy Nasdaq 100, "not very appealing in terms of risk/reward," with "quite small room for error." He still believes that U.S. stocks are in a bull market, with the "future trend still upward," but the risk/reward has significantly decreased, with a "very stringent setup and an unstable path," although the strategy of buying into the market significantly during future major pullbacks in the past two years remains effective.

【Stock News】

Boeing (BA.US) Proposes 30% Wage Increase Over Four Years to End Machinists' Strike. Boeing significantly raised its contract offer to the machinists' union on Monday to end a strike that could harm the company's interests. Boeing's chief negotiator Fitzsimmons said the new offer was submitted around 9 a.m. local time. "We hope it addresses concerns on both sides of the union and the membership, and we hope they can vote on it soon." The new proposal includes a 30% wage increase over four years, higher than the 25% proposal rejected by the machinists. This includes an immediate 12% raise, followed by 6% raises annually for the remaining three years. The annual bonus that was previously removed in the proposal has also been reinstated, adding a variable additional income, typically around 4% annually. Boeing's new proposal also doubles the signing bonus, so each machinist will receive a $6,000 bonus upon signing. Boeing is currently up over 2.2%.

Bank of America (BAC.US) Plans to Open Over 165 New Branches by the End of 2026. Bank of America announced on Monday that it plans to open over 165 new branches in the U.S. by the end of 2026. The bank has redesigned its branches to emphasize in-person sales of products such as mortgages and investments, rather than traditional teller transactions Bank of America stated in a declaration that this year's expansion plan will include the establishment of 40 new branches. The company mentioned that it is currently operating in 38 states, excluding the District of Columbia, and aims to expand to 41 states by 2026.

The possibility of Qualcomm (QCOM.US) acquiring Intel (INTC.US) may raise concerns about anti-monopoly and foundry operations. Analysts suggest that the potential acquisition of Intel could accelerate Qualcomm's diversification, but it would also bring a loss-making semiconductor manufacturing division to the smartphone chip maker, which may struggle to turn it profitable or sell the division. The acquisition would also face rigorous global antitrust scrutiny, as it would unite two significant chip companies in the largest deal in the industry's history, creating a behemoth with substantial market share in the smartphone, personal computer, and server markets