Pre-market market trends

1. Pre-market trading on September 3rd (Tuesday), futures for the three major US stock indexes fell together. As of the time of writing, Dow Jones futures fell by 0.48%, S&P 500 futures fell by 0.46%, and Nasdaq futures fell by 0.60%.

2. As of the time of writing, Germany's DAX index fell by 0.27%, UK's FTSE 100 index fell by 0.46%, France's CAC 40 index fell by 0.21%, and Europe's Stoxx 50 index fell by 0.40%.

3. As of the time of writing, WTI crude oil fell by 1.54%, with a quote of $72.42 per barrel. Brent crude oil fell by 2.24%, with a quote of $75.78 per barrel.

Market News

Upon their return from the North American traders' holiday, they continued to bet on the US dollar, and the US dollar index has risen for five consecutive days. The US dollar index, which measures the strength of the US dollar against a basket of major currencies, has rebounded for five consecutive trading days. The traders in the North American financial markets returned from the Labor Day holiday to welcome a new week of economic data and bet that the US dollar will continue to rebound under the influence of these economic data. As of the time of writing, the US dollar index has risen by 0.16%, with a quote of 101.81. Market strategists from Malayan Banking Bhd, led by Saktiandi Supaat, stated that "if US manufacturing data unexpectedly improves and stimulates a repricing of the bet on a US Federal Reserve rate cut, traders may further bet on the US dollar exchange rate going up."

Former US Treasury Secretary: The Federal Reserve may not eventually make large interest rate cuts. Former US Treasury Secretary Summers said that the Federal Reserve's monetary policy has not been as tight as investors may think, making the market more prone to entering a bubble zone. Summers stated that the US economy is still strong, with good employment and resilient economic growth. However, he added that a strong US economy may actually be bad news for US stocks because it indicates that the Federal Reserve's monetary policy is not as tight as the market thinks. Summers estimated that the neutral interest rate level that neither inhibits nor stimulates economic growth has increased from about 2.5% to around 4%. He also warned that the Federal Reserve may not make significant interest rate cuts as expected by the market, and the possibility that the Federal Reserve will not cut interest rates by 2024 may have slightly increased to over 15%, which is bearish for US stocks. Summers said, "We are at least on the edge of a bubble, and I don't think the financial markets are showing obvious signs of a bubble like they have in other periods. But that doesn't mean we're far from that situation."

Has the Fed already made a policy mistake? Analysts urge the Federal Reserve not to 'sleepwalk' and cut interest rates sooner. Kenneth Akintewe, head of Asian sovereign debt at the UK investment company Abrdn Asset Management, said that there is still a long-term risk of slowing down the US economy in 2025. He mentioned economic data such as non-farm payrolls, saying that these data were later revised to reflect a weak economic situation. Akintewe said, 'Has the economy already been weaker than what the overall data shows, and should the Federal Reserve have already loosened monetary policy?' He added that the policy changes by the Federal Reserve take time to take effect in the economy, 'so if the economy is weaker than what the overall data shows, they will need to accumulate enough easing policies, you know, 150 to 200 basis points, that will take time.' 'Once you take so many easing policies, it will take at least six to eight months to see the effects.'

Goldman Sachs continues to strongly call for an increase in gold: it will soon rise to $2,700! Goldman Sachs believes that as gold is seen as the preferred tool for hedging risks, gold has the greatest potential for a recent rise. At the same time, weak demand in Asia has led the bank to have a 'more cautious, less optimistic' view on other commodities. A Goldman Sachs analyst said, 'The upcoming Fed rate cut will prompt Western capital to return to the gold market, which has been a missing important factor in the significant rise in gold prices over the past two years.' Goldman Sachs has adjusted its gold price target to rise to $2,700 by early 2025. In addition, regarding crude oil, Goldman Sachs holds a more cautious attitude, expecting a narrowing of the crude oil deficit in the summer of this year, while the supply surplus in 2025 will be slightly higher than expected.

Individual stock news

Tesla (TSLA.US) achieved its best sales performance in China in August, with a 37% increase month-on-month. In August this year, benefiting from booming sales in smaller cities, Tesla achieved its best monthly sales in China so far this year. Tesla stated that it sold over 630,000 cars in the Chinese market last month, a significant increase of 37% from July. While this is an encouraging progress, Tesla's performance lags far behind strong Chinese competitors. Like many other auto manufacturers, Tesla has had to face a prolonged price war in China. In the first half of this year, the company's sales in China declined by 5%.

Activist shareholder Elliott crosses the crucial threshold for shareholding, will Southwest Airlines (LUV.US) management reform start soon? According to sources, activist investor Elliott Investment Management currently holds 10% of Southwest Airlines' common stock, exceeding the threshold at which the hedge fund can call for a special meeting at Southwest Airlines. It is reported that Elliott is seeking the removal of CEO Robert Jordan and Chairman Gary Kelly, and plans to nominate 10 directors to the airline's 15-member board. The company has signaled to other shareholders its readiness to take the next steps, including convening a special meeting, unless the company is willing to discuss changes in leadership. As of the time of publication, Southwest Airlines rose over 2% in pre-market trading on Tuesday.

Gold volume and price both increase! Harmony Gold Mining (HMY.US) releases a 'burst' performance forecast: profits expected to surge by 78%. The globally renowned gold mining and exploration company, Harmony Gold Mining, stated that with gold prices repeatedly hitting new highs and gold production increasing, profits for the previous fiscal year (i.e., earnings per share) are expected to significantly increase by 78% year-on-year. The company expects earnings per share for the 12 months ending in June to reach 13.88 rand (about $0.78), far exceeding the 7.80 rand of the previous fiscal year. The company will officially release its financial statements on September 5th.

Two presidential candidates consecutively oppose it, the $14 billion takeover of United States Steel (X.US) by Nippon Steel faces new obstacles. Presidential candidate Harris of the United States stated on Monday that he 'always supports American steelworkers' and emphasized publicly that American steel should be owned and operated by Americans. In addition, Republican presidential candidate Trump stated last month that once in the White House, he would veto Nippon Steel's acquisition of US steel. It is reported that Nippon Steel's acquisition offer for US steel is $14 billion, corresponding to $55 per share. As of the time of publication, US Steel fell nearly 6% in pre-market trading on Tuesday.

Important economic data and events notice

US August SPGI Manufacturing PMI final value at 21:45 Beijing time.

US August ISM Manufacturing PMI at 22:00 Beijing time.