Overnight US Stocks | Tech stocks plummet, S&P 500 index records worst weekly performance since March last year

According to Zhitong Finance, on Friday, the three major indices fell, and Federal Reserve Board member Waller expressed an open attitude towards a significant rate cut. This week, the three major indices experienced cumulative declines, with the Dow down 2.93%, the S&P 500 down 4.25%, and the Nasdaq down 5.77%. The S&P 500 recorded its worst weekly performance since March 2023.

[US Stocks] At the time of writing, the Dow fell 410.34 points, or 1.01%, to 40,345.41 points; the Nasdaq fell 436.83 points, or 2.55%, to 16,690.83 points; the S&P 500 fell 94.99 points, or 1.73%, to 5,408.42 points. Broadcom (AVGO.US) fell over 10%, Tesla (TSLA.US) fell 8.45%, TSMC (TSM.US) and NVIDIA (NVDA.US) fell over 4%, NVIDIA CEO Jensen Huang sold 240,000 shares of NVIDIA stock on September 4-5, cashing out $25.8 million. The Nasdaq Golden Dragon Index fell 0.77%, XPeng (XPEV.US) and Li Auto (LI.US) fell by about 3%, while Nio (NIO.US) rose by 3.7%.

[European Stocks] The German DAX 30 Index fell 297.16 points, or 1.60%, to 18,298.35 points; the UK's FTSE 100 Index fell 58.26 points, or 0.71%, to 8,183.45 points; the French CAC 40 Index fell 79.66 points, or 1.07%, to 7,352.30 points; the Euro Stoxx 50 Index fell 75.40 points, or 1.57%, to 4,739.75 points; the Spanish IBEX 35 Index fell 94.10 points, or 0.83%, to 11,179.40 points; the Italian FTSE MIB Index fell 383.80 points, or 1.14%, to 33,301.00 points.

[Asia-Pacific Stock Markets] The Nikkei 225 Index fell by 0.72%, the Indonesia Jakarta Composite Index rose by 0.53%, and the Vietnam VN30 Index rose by 0.48%.

[Gold] US gold futures closed down 0.7% at $2,524.6. Standard Chartered Bank analyst Suki Cooper said, "We believe the Fed may further cut interest rates, which would pose upside risks to gold prices. As the situation unfolds this year, we will begin to see gold prices move towards $2,700 per ounce."

[Cryptocurrency] Bitcoin fell over 5.4% to $53,129; Ethereum fell over 7% to $2,197.33.

[Crude Oil] US WTI crude oil futures prices fell over 2% on Friday to their lowest level since June 2023, marking the benchmark crude's worst week in nearly a year. Despite the decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to delay production increases to stabilize oil prices, the market remains concerned about weak global demand. New York Mercantile Exchange October-delivery WTI crude oil futures fell $1.48, or over 2.1%, to close at $67.67 per barrel, hitting a new closing low since June 2023 【Metals】 London metals fell, with London nickel down more than 1.1%, London zinc down more than 1%, London aluminum down more than 1.6%, and London copper down more than 1.5%.

【Macro News】

Moderate Growth in US Non-Farm Payrolls in August, Unemployment Rate Declines. Despite a decrease in the unemployment rate, hiring in the US remained lackluster in August, which may intensify the current debate on how much the Federal Reserve should cut interest rates. Data released by the Bureau of Labor Statistics on Friday showed that non-farm payrolls in the US increased by 142,000 in August, with the data for the previous two months revised downward, totaling a downward revision of 86,000 in June and July. The unemployment rate in August dropped to 4.2%. Following the data release, US Treasury yields declined, S&P 500 index futures continued to fall, and the US dollar extended its losses. The report indicated that the job market is losing momentum. While layoffs are still largely restrained, many companies are delaying expansion plans due to high borrowing costs and uncertainty ahead of the November presidential election. Hiring in the healthcare and social assistance sectors drove the increase in employment. Recruitment in the construction and government sectors also saw some growth. The diffusion index measuring the breadth of job growth increased. The participation rate in August remained unchanged at 62.7%. The participation rate for workers aged 25-54 declined for the first time since March.

Fed's Quarles to Preview Changes to Bank Capital Proposal Next Week. Federal Reserve Vice Chair for Supervision Quarles will preview revisions to the bank capital reform proposal on September 10. According to an announcement by the Brookings Institution, Quarles will discuss the proposed revisions and next steps. Quarles and Fed Chair Powell previously stated their intention to make broad and substantive changes to the capital plan, a move that has faced strong opposition from the industry. In July this year, Powell attended a closed-door meeting with some large bank CEOs, encouraging them to collaborate with the Fed to avoid a lengthy legal battle over the capital reform proposal.

Fed's Waller: Open to Larger Rate Cuts. Federal Reserve Governor Waller stated on Friday that the "time is now" to begin a series of rate cuts and added that he is open to the size and pace of rate cuts. "If the data supports consecutive rate cuts, then I think consecutive rate cuts are appropriate. If the data suggests the need for larger rate cuts, then I would also support that." Two weeks ago, Fed Chair Powell stated at the global central bank annual meeting that given progress on inflation and cooling in the labor market, the "time has come" for easing policy. Waller used similar language but took a more aggressive stance, hinting that he would be willing to start with a significant 50 basis point cut. Data released earlier on Friday showed an average monthly addition of 116,000 jobs over three months. Waller stated that this data, along with other recent data, "reinforces the view of a continued slowdown in the job market."

Fed's "Number Three" Williams: Appropriate to Lower Rates Now. New York Fed President (enjoys permanent voting rights on the FOMC, known as the "Fed's number three") Williams stated in a speech that the economy is currently in balance, inflation is moving towards 2%, and therefore, it is appropriate to reduce the restrictiveness of the policy stance by lowering the federal funds target range now William then mentioned during the discussion that he hoped to study the August non-farm payroll report more carefully, pointing out that the latest data "fits the situation we have been seeing all along - economic slowdown, cooling labor market." Williams later told reporters that the employment data further confirmed the cooling of the labor market. He stated that he had no idea whether the Fed should cut rates by 25 or 50 basis points.

Former U.S. Treasury Secretary: Weak Employment Makes Fed Closer to Cutting Rates by 50 Basis Points. Former U.S. Treasury Secretary Summers stated that although the August non-farm payroll report was not particularly bad, it did make it more difficult to predict the extent to which the Fed might cut rates this month. Summers said in an interview, "Although the data did not show very obvious weakness, if you are concerned about the recent trend in statistical data, then these data will certainly not provide you with an assurance of economic health." "Compared to my guess a month or two ago, the probability of a 25 or 50 basis point rate cut in September seems closer." Summers said that ultimately, the size of the Fed's initial action is not important. Officials will closely monitor the development of the economic outlook and adjust policies accordingly. He said, "If the economy weakens significantly, they will cut rates significantly." "If the economy does not weaken significantly, they may cut rates at a pace of about one meeting at a time."

[Stock News]

Buffett Continues to Reduce Stake in Bank of America (BAC.US) for 9 Consecutive Trading Days. Warren Buffett's Berkshire Hathaway further reduced its stake in Bank of America. According to a document from the U.S. Securities and Exchange Commission (SEC), the company sold slightly over 18.7 million shares of Bank of America this week. After Bank of America's last earnings report exceeded expectations, its stock price reached a two-year high, and subsequently, Berkshire Hathaway has been reducing its stake in Bank of America in recent months. Bank of America's stock price hit a recent high closing of $44.13 on July 16, and since then the stock has fallen back, but the price is still nearly 18% higher than at the beginning of the year. In fact, Berkshire has sold Bank of America stock for nine consecutive trading days. Data shows that in the past nine trading days, Berkshire has sold Bank of America stock every trading day, reducing its holdings from slightly below 950 million shares at the beginning of the month to approximately 864 million shares at Thursday's close.

Microsoft (MSFT.US) Appoints Rodrigo Kede Lima as New President of Asia Region. Microsoft has appointed Rodrigo Kede Lima as the new President of Microsoft Asia, with immediate effect. He succeeds Ahmed Mazhari, who has held the position for five years. The two will work together to ensure a smooth transition until September 30, 2024. In his new role, Rodrigo will leverage his experience in driving digital transformation and collaboration to lead Microsoft's work in the region. He will lead a diverse team spanning 20 countries with 30,000 employees, dedicated to unleashing Asia's innovative strengths and creating opportunities for sustainable economic recovery and prosperity. Rodrigo will report to Microsoft's Executive Vice President and Chief Business Officer Judson Althoff Judson Althoff said: I am pleased to welcome Rodrigo Kede Lima as the new President of Microsoft Asia. Rodrigo has rich experience in driving digital transformation and recognized leadership capabilities, making him the best candidate for this position. His dedication to empowering our employees, customers, and partners is crucial for leading the AI transformation in the region and making a significant impact on the communities we serve. I would also like to thank Ahmed Mazhari for his significant contributions to establishing Microsoft's trusted partner reputation in Asia.

Faraday Future (FFIE.US) announces $30 million financing commitment. Faraday Future, based in California, USA, announced that the company has secured a $30 million financing commitment from investors in the Middle East, the US, and Asia. The new financing commitment includes $7.5 million from previous financing and $22.5 million in new investments, in the form of convertible notes and warrants to purchase additional shares of the company's common stock.

[Major Bank Rating]

BMO: Maintains Buy rating on Microsoft (MSFT.US) with a target price of $500