Macro Matters

U.S. New Home Sales Drop Less Than Anticipated; Median House Price Decreases

New home sales decreased 4.7% to a seasonally adjusted annual rate of 716,000 units last month, the Commerce Department's Census Bureau said.

The median new house price decreased 4.6% to $420,600 in August from a year ago. Most of the houses sold last month were in the $300,000-$499,999 price range.

Source: Trading Economics

US Durable Goods Orders Hold Steady Defying Pessimistic Forecasts

New orders for manufactured durable goods in the US were loosely unchanged from the prior month in August of 2024, compared to the revised 9.8% surge in July which was the highest in four years, and contrasting sharply with market expectations of a 2.6% drop. The result challenged the growing pessimism over manufacturing activity in the United States, suggesting the current slowdown may be temporary.

Excluding transportation, new orders rose by 0.5%, well above expectations of a 0.1% increase.

Key Federal Inflation Gauge Registers 2.2% in August, Below Expectations

The PCE price index in the US increased 2.2% year-on-year in August 2024, the lowest since February 2021, compared to 2.5% in July and below forecasts of 2.3%.

The annual increase in the core PCE price index, the Federal Reserve’s preferred gauge, edged higher to 2.7% in August of 2024 from 2.6% in the previous month.

Chart: Headline PCE Inflation, Trading Economics

Smart Money Flow

Stock buybacks by BofA's corporate clients, which surpass the overall trend of S&P 500 buybacks, suggest a positive outlook for investors, defying recession fears while showcasing confidence in future growth potential.

S&P 500 Gains Are Becoming Less Dependent on Nvidia

David Tepper's Big Bet After the Fed Rate Cut Was to Buy 'Everything' Related to China

Billionaire hedge fund founder David Tepper said his big bet after the Federal Reserve’s rate cut was to buy Chinese stocks.

“I thought that what the Fed did last week would lead to China easing, and I didn’t know that they were going to bring out the big guns like they did,” Tepper told CNBC’s “Squawk Box” on Thursday. “And I think there’s a whole shift.”

Tepper also noted the Chinese market is cheaper than U.S. equities. “You’re sitting there with single multiple P/Es with double-digit growth rates for the big stocks that trade over here,” Tepper said. “That’s kind of versus what, you know, the 20-plus on the S&P.”

Recent upside breakouts in S&P 500 cumulative net up volume, along with other bullish indicators, suggest that the S&P 500 may continue to reach new highs, indicating a robust market environment.

Global earnings have mostly seen downgrades, per Citi

Top Corporate News

Micron Revenues Surge 93% Driven by AI Demand

AI-driven server memory, particularly GPU high-bandwidth memory (HBM), and SSD demand sent Micron revenues in its final FY 2024 quarter to $7.75 billion, 93 percent higher year-on-year.

It made a net profit of $887 million in the quarter ended August 29, contrasting with the $1.4 billion loss a year ago. Full FY 2024 revenue was $25.1 billion, 62 percent higher year-over-year, with a $778 million net profit, versus FY 2023’s $5.83 billion loss.

Costco's Earnings Beat Estimates Despite Slower Sales Growth

Costco Wholesale (COST) delivered fiscal fourth-quarter earnings that exceeded analysts’ forecasts, although revenue fell slightly short due to decelerating growth. The company reported a 7% increase in net income from the previous year, reaching $2.35 billion or $5.29 per share, which surpassed expectations from analysts surveyed by Visible Alpha. However, revenue growth was modest, rising just 1% year-over-year to $79.7 billion, missing the projected figures.

Accenture Earnings Top Estimates Amid Strong Bookings

Accenture earnings for the quarter ended Aug. 31 rose 3% to 2.79 per share on an adjusted basis, said the Dublin-based consulting firm. Including acquisitions, revenue increased 3% to $16.4 billion, Accenture said.

Analysts expected Accenture earnings of $2.78 a share on sales of $16.36 billion. Bookings rose 21% to $20.1 billion, including $1 billion in artificial intelligence-related bookings.

Super Micro shares tumble 12% after DOJ reportedly opens probe into company

Super Micro Computer shares closed down 12% on Thursday after the Justice Department reportedly opened a probe into the company, which has been a major beneficiary of the artificial intelligence boom.

The probe is in its early days, according to a report from The Wall Street Journal, and it comes after Hindenburg Research disclosed a short position in the company in late August.

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