1. On September 10 (Tuesday), the futures of the three major US stock indexes fell sharply before the US stock market. As of press release, Dow futures were down 0.07%, S&P 500 futures were down 0.02%, and NASDAQ futures were down 0.15%.

2. As of press release, the German DAX index fell 0.33%, the UK FTSE 100 index fell 0.59%, the French CAC40 index rose 0.16%, and the European Stoxx 50 index rose 0.09%.

3. As of press release, WTI crude oil fell 0.86% to $68.12 per barrel. Brent crude oil fell 0.75% to $71.28 per barrel.

Market news

US presidential candidates Harris and Trump will debate at 9 a.m. Beijing time on Wednesday. The debate at 9 a.m. Beijing time on Wednesday (September 11) is likely to be the most important night in US Vice President Harris's political career. Former President Trump joined the debate with the hope of turning a new page after a difficult summer. Since replacing President Biden as the Democratic nominee for president, Harris has narrowed the poll gap with Trump. Wednesday may be one chance for Trump to do his best to reverse this trend before Americans begin early voting. Harris's aides and supporters hoped that she would inspire the former president to speak uncontrollably. The Trump campaign wants him to turn the conversation back to the three areas where they think they can win: the economy, immigration, and global chaos.

Goldman Sachs sent a “reassurance pill”: the risk of a recession in the US economy is very low, and US stocks are unlikely to fall into a bear market. Goldman Sachs strategists said that the US stock market is unlikely to plummet 20% or more because the risk of a recession is still very low, and the Federal Reserve is expected to cut interest rates. A team led by Christian Mueller Glissmann said that although the US stock market may fall before the end of the year due to rising valuations, mixed economic growth prospects, and policy uncertainty, it is unlikely that the stock market will enter a bear market because the economy is also supported by a “healthy private sector” to a certain extent. Furthermore, a historical data analysis by Goldman Sachs Strategy Team shows that since the 90s of the last century, the S&P 500 index has declined less frequently by more than 20% due to extended business cycles, reduced macroeconomic volatility, and central bank “buffers.”

How are large US tech stocks returning to their gains? Goldman Sachs is pointing the way: it needs “magical” moments of help. Kash Rangan, senior technology analyst at Goldman Sachs, said that in order for major US tech stocks to rise again, strong support from “magical moments” is needed. The bank pointed out that the formula for this magical moment was a steady cut in interest rates by the Federal Reserve, combined with the explosion of a series of innovations, which drove profit growth of more than 20%. “We have to restore the industry's growth rate from 11% to 20%-30%. To do this, new innovations are necessary,” Rangan said at the Goldman Sachs Communications and Technology Conference on Monday. Rangan is optimistic about Microsoft (MSFT.US) and CRM.US (CRM.US). He said the tech industry must make a difference in artificial intelligence in areas such as customer upselling and monetization. “When you combine this innovation with lower interest rates, miracles happen,” Rangan said.

Societe Generale Bank: The US non-agricultural sector fell short of expectations, but there is reason for the market to cut interest rates by 50 basis points. Société Générale said that after the release of the US non-farm payrolls report for August, the possibility that the Fed would cut interest rates by 50 basis points this month increased, but then subsided, indicating that traders think the Fed had almost no intention of cutting interest rates drastically when it began cutting interest rates. Societe Generale said that employment growth was lower than expected, but it was not disastrous, and wage growth rebounded slightly. There is no doubt that the US economy is slowing down, but there is also no reason to call it a 'hard land'. According to the CME Federal Reserve Watch Tool this Monday, the probability that the Fed will cut interest rates by 50 basis points in September is 27%, and the chance of cutting interest rates by 25 basis points is 73%. By contrast, the ratio jumped from 40% last Thursday to around 50% last Friday after the release of the mixed employment report for August last week.

US consumer loans unexpectedly increased by $25.5 billion, the biggest increase since the end of 2022. US consumer borrowing in July recorded the biggest increase since November 2022, reflecting a sharp increase in non-revolving debt and credit card balances. Data released by the Federal Reserve on Monday showed that total outstanding credit increased by $25.5 billion, an increase that exceeded all predictions from the economists' survey. Outstanding revolving debt, including credit cards, increased by $10.6 billion, to its highest level in five months. Non-revolving credit, such as car purchase loans and tuition loans, surged $14.8 billion over a year. These figures are not adjusted for inflation. Increased borrowing helped drive the biggest increase in retail sales in July since the beginning of 2023. This includes an increase in motor vehicle purchases. However, if consumers become more cautious, burdening with larger credit card balances and high-interest loans will pose a risk to spending.

Rumor has it that the capital requirements of major US banks will be cut in half, and Wall Street banks “rise first and respect.” According to people familiar with the matter, after regulators agreed to completely revise the proposed package of rules, the capital increase requirements faced by major US banks fell to 9%, which was a sharp reduction compared to the original plan. The original plan of the Federal Reserve, the Federal Deposit Insurance Corporation, and the US Monetary Supervisory Service required eight US systemically important banks, including Bank of America (BAC.US) and JPMorgan Chase (JPM.US), to increase capital by 19% to cushion unexpected losses and financial shocks. A drastic reduction in capital requirements is more likely to appease banks. After the proposal was introduced last year, banks launched one of the most intense lobbying activities. The revised draft may also help Federal Reserve Chairman Powell achieve the goal of receiving broad support from the Federal Reserve Committee. Powell has made it clear to the bank that he also wants to avoid a lengthy legal battle.

Individual stock news

Oracle (ORCL.US) Q1 earnings exceeded expectations, and cloud infrastructure revenue increased 45% year over year. Oracle's Q1 revenue increased 7% year over year to $13.3 billion, in line with analysts' average expectations. Under non-GAAP accounting standards, operating profit increased 14% year over year to $5.7 billion, better than analysts' average expectations of $5.59 billion; earnings per share were $1.39, better than analysts' average expectations of $1.33. Cloud revenue (IaaS+SaaS) increased 21% year over year to $5.6 billion in Q1, in line with analysts' expectations; among them, cloud infrastructure revenue increased 45% year over year to $2.2 billion, better than analysts' average forecast of $2.18 billion. Remaining performance obligations (RPO) rose 53% year over year to $99 billion, a record high for the company. Looking ahead, Oracle expects non-GAAP earnings per share for the second quarter to be $1.45-1.49, and revenue will increase 8%-10% year over year, with cloud revenue growing 24%-25% year over year.

With the smartphone market recovering and demand for AI chips booming, TSM.US's revenue surged 33% in August. TSMC's revenue increased 33% last month, which is certainly a positive sign for investors betting on the recovery of the smartphone market and the continued sharp increase in demand for Nvidia (NVDA.US) artificial intelligence chips. According to the data, sales reached 250.9 billion Taiwan dollars (7.8 billion US dollars) in August, but the growth rate of 45% slowed from the previous month. Analysts expect TSMC's total revenue to grow by about 37% in the third quarter, continuing the strong recovery from the slump in demand after the COVID-19 pandemic. Although this is only a month-long situation, this result may ease concerns about whether the market is overestimating the durability of Nvidia's AI GPU-led AI infrastructure spending. On September 3, Nvidia's market value evaporated to about 279 billion US dollars, and the stock price recorded the biggest drop in a single day.

Apple (AAPL.US) launches the new iPhone 16 series: designed around AI and equipped with a new A18 processor. On Monday, September 9, Apple (AAPL.US) held its most important product launch of the year to launch the new iPhone 16 series and a range of other new products. The theme of this press conference was “Highlight Moments.” The most notable new product this year is the iPhone 16 series smartphone. Apple has also made major updates to the Apple Watch and AirPods, and launched the new Apple Intelligence, which is an upgraded version based on Siri. This press conference is of great significance to Apple. The company is gradually getting out of the longest sales slump in recent years and hopes to inject new vitality into the core business through new products. These core products account for about 60% of Apple's annual revenue. At the same time, Apple is also stepping up efforts to promote consumer spending on its service products, which has become an increasingly important source of revenue for the company.

The EU court dismissed the lawsuit against Google's parent company Alphabet (GOOGL.US). Google was fined a record 2.4 billion euro by the European Union for abusing shopping services. Google's parent company Alphabet filed an appeal, but the EU court rejected it. The European Court of Justice held that Google unlawfully used its dominant position on search engines to provide higher rankings for its product listings.

13 billion euros involved! Apple (AAPL.US) lost the lawsuit in a huge tax avoidance case. Apple lost a lawsuit involving the 13 billion euro (14.4 billion US dollars) Irish tax bill, which further fueled the EU's crackdown on countries providing special concessions to large companies. The European Court of Justice in Luxembourg upheld a landmark 2016 ruling that Ireland violated state aid laws and gave Apple an unfair advantage. The court ruled on Tuesday that Apple's victory in a lower court should be overturned because the judge wrongly determined that the Commission's regulators made a mistake in the assessment. The ruling is encouraging for EU antitrust commissioner Margrethe Vestager. In 2016, Vestager pointed the finger at Apple's tax arrangement, which sparked anger on the other side of the Atlantic. She ordered Ireland to take back 13 billion euros, and the money has been kept in an escrow account awaiting a final ruling.

Bad news keeps on coming! Mobileye (MBLY.US) decided to discontinue in-house lidar development. Mobileye Global has decided to discontinue in-house development of next-generation frequency modulated continuous wave (FMCW) lidars for autonomous driving and highly autonomous driving systems. The lidar R&D department will close at the end of 2024, affecting around 100 employees. In 2024, the operating expenses of the lidar R&D division are estimated to be around 60 million dollars. The decision to discontinue in-house lidar development was based on a number of factors, including substantial progress in the company's EyeQ6-based computer vision perception, improved performance of its in-house developed imaging radar, and continued reduction in the cost of third-party time-of-flight (ToF) lidars. Although this move is not expected to have a significant impact on Mobileye's 2024 results, it can avoid future lidar development expenses.

Key economic data and event forecasts

20:55 Beijing time: The annual rate of commercial retail sales of the Red Book in the US for the week ending September 2 (%).

The next day at 00:00 a.m. Beijing time: The EIA releases the monthly short-term energy outlook report.

The next day at 04:30 a.m. Beijing time: US API crude oil inventory changes for the week ending September 6 (10,000 barrels).

22:00 Beijing time: Federal Reserve Governor Barr delivered a speech on Basel III.

The next day at 00:15 a.m. Beijing time: Federal Reserve Governor Bauman delivered a speech on bank stress tests.

09:00 Beijing time the next day: US presidential candidate Harris and Trump debate on ABC News.

Performance Forecast

Wednesday Morning: GameStop (GME.US)