Macro Matters

FOMC Decision Hangs in the Balance, 25 Basis Points Cut Appears More Probable

The Federal Reserve will make the decision on interest rates and release the latest quarterly economic forecast and interest rate dot ploton September 18.

Traders are betting on a 55% chance that the Fed will cut rates by 25bp and a 45% chance of a 50bp cut.

Chart: Dow Jones Index Performance After Rate Cuts

Annual CPI Hits Lowest Since Early 2021

The US annual inflation rate decreased for the fifth straight month to 2.5% in August 2024, marking the lowest level since February 2021, down from 2.9% in July and falling below the anticipated 2.6%. Month-over-month, the Consumer Price Index (CPI) increased by 0.2%, consistent with July's figures.

Smart Money Flow

While the Magnificent Seven have been the main drivers of S&P 500 earnings growth, the remaining 493 stocks are expected to catch up.

In August, global equity funds saw significant outflows, the largest since 2022, reflecting a cautious sentiment among investors.

September and October tend to have the highest #volatility of daily #stock price returns. Much of that is due to the second half of September and 1st half of October which tend to be seasonally weak.  

In its base case scenario, #GoldmanSachs projects a year-end 2024 price target of 5,600 for the S&P 500 index, supported by robust earnings growth and a stable price-to-earnings ratio.

Top Corporate News

Oracle Sees $104 Billion Sales in Fiscal 2029 on Cloud Boom

Oracle Corp. announced that its annual revenue is projected to reach at least $104 billion by fiscal 2029, highlighting strong growth prospects for its cloud infrastructure business. At an annual financial analysts briefing, Executive Vice President Doug Kehring also raised the company's fiscal 2026 sales outlook to at least $66 billion, surpassing analysts' average estimate of $64.5 billion. In response, Oracle's shares surged up to 7.8% on Friday, hitting a record high of $173.94, marking the stock's best weekly performance since 2002 and a 53% year-to-date rally.

Adobe Falls Most in Six Months on Disappointing Sales Outlook

Adobe Inc. shares experienced their steepest decline in six months after the company's fiscal fourth-quarter sales guidance fell short of Wall Street expectations, raising concerns among investors eager to see new artificial intelligence tools generate revenue. Despite integrating its AI technology, Firefly, into popular products like Photoshop and Illustrator, Adobe's projected digital media net new annual recurring revenue of $550 million for the period ending in November missed analysts' average estimate of $561.1 million. Additionally, the company's total revenue forecast of up to $5.55 billion also fell below the anticipated $5.6 billion, heightening investor apprehension as small startup rivals challenge traditional software giants like Adobe, Salesforce Inc., and Workday Inc.

Uber and Waymo Expand Partnership to Bring Autonomous Ride-Hailing to Austin and Atlanta

Uber Technologies and Waymo LLC have announced an expansion of their partnership to offer autonomous ride-hailing services in Austin and Atlanta starting in early 2025. This collaboration will see Uber managing and dispatching a fleet of Waymo's fully autonomous, all-electric Jaguar I-PACE vehicles exclusively through the Uber app. Riders requesting UberX, Uber Green, Uber Comfort, or Uber Comfort Electric may be matched with a Waymo vehicle for qualifying trips. Uber CEO Dara Khosrowshahi expressed enthusiasm, highlighting the success of their fully autonomous trips in Phoenix and looking forward to bringing the same innovative mobility experience to riders in the new cities.

Qualcomm Explores Acquiring Pieces of Intel Chip-Design Business

Qualcomm is exploring the possibility of acquiring various segments of Intel's design business to enhance its product portfolio, according to sources familiar with the matter. With Intel facing financial challenges and seeking to divest certain business units and assets, Qualcomm has shown particular interest in Intel's client PC design business, though it is considering other design units as well.

Verizon to Buy Frontier in $20 Bln Deal to Boost Fiber Network in U.S.

Verizon announced on Thursday its agreement to acquire fiber-optic internet provider Frontier Communications in an all-cash deal valued at $20 billion, aiming to expand its subscriber base. The acquisition, offering $38.50 per share and representing a 37.3% premium over Frontier's closing stock price on September 3, positions Verizon to better compete with AT&T and T-Mobile, who are intensifying their focus on unlimited plans and bundling options.

Upcoming Economic Data

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