Weekly Market Recap | Sep 23 – Sep 29

Treasuries Rally as Fed Rate-Cut Bets Hold Steady

• Treasuries rallied while U.S. stocks fluctuated, with inflation data not altering expectations for the Federal Reserve’s rate cuts. The S&P 500 was stable, the Nasdaq 100 dipped 0.5% due to Nvidia’s performance, and the 10-year Treasury yield fell to around 3.75%.

• The Fed’s preferred inflation gauge rose modestly in August, reinforcing predictions of continued rate cuts. Consumer sentiment reached a five-month high, indicating a resilient economy. Markets are pricing a split chance between a quarter-point and half-point rate cut at the next Fed meeting.

• China’s stimulus announcements boosted risk appetite, and the CSI 300 Index marked its best week since 2008.

Politics Weekly

• Shigeru Ishiba was elected as Japan’s next prime minister after winning the leadership of the ruling Liberal Democratic Party. A former defense minister, Ishiba advocates for stronger regional security, including the creation of an “Asian NATO”.

• Malaysian Prime Minister Anwar Ibrahim is facing criticism for allegedly using the anti-corruption agency to target political rivals, including former Prime Minister Mahathir Mohamad, raising concerns about political retaliation.

• Israeli Prime Minister Benjamin Netanyahu pledged to continue military strikes against Hezbollah in Lebanon until key objectives are met, including the safe return of northern Israeli residents.

• Israeli forces have conducted airstrikes against Hezbollah targets in Lebanon for four consecutive days, resulting in over 600 casualties, according to Lebanon’s health ministry.

• Netanyahu’s far-right allies, National Security Minister Itamar Ben Gvir, threatened to quit the ruling coalition if a permanent truce is reached in Lebanon.

• Hezbollah has launched hundreds of rockets at northern Israel, including its first attempt to strike Tel Aviv, marking the worst escalation in violence between the two sides since the 2006 war.

• Pakistan has received final approval for a $7 billion loan program from the International Monetary Fund (IMF), with an immediate disbursement of $1.1 billion.

• The Pentagon confirmed that a Chinese nuclear-powered submarine sank earlier this year at a shipyard in Wuhan, with uncertainty about whether it was carrying nuclear fuel.

• Ukrainian President Volodymyr Zelensky met with U.S. leaders, including President Biden, seeking approval for the use of long-range missiles against Russia. He aimed to secure continued bipartisan support, particularly from Republicans, ahead of the November elections.

• Former Maryland Governor Larry Hogan, a centrist Republican, is running for the Senate, rejecting Trump’s endorsement. Despite his popularity, Democrats warn voters of the national implications of a Republican win in the deep-blue state.Vice President Kamala Harris is visiting the U.S.-Mexico border in Arizona to promote a tougher immigration stance, addressing Republican attacks on her previous liberal views. She is currently trailing Donald Trump in voter support on this issue.

• Israel has confirmed the death of Hezbollah leader Hassan Nasrallah following a targeted airstrike on the group’s headquarters in Beirut. The strike, part of the heaviest assault on Lebanon’s capital in nearly 20 years, hit a command center concealed beneath residential buildings.

• The Israeli military announced a large-scale airstrike targeting military infrastructure in Yemen, focusing on power plants and a sea port used by the Houthi regime to import oil. The operation, involving fighter jets and intelligence planes, hit sites in Ras Isa and Hudaydah.

Technology Advancements this week

• US President Joe Biden and Indian Prime Minister Narendra Modi announced plans to build a semiconductor plant in India, producing infrared, gallium nitride, and silicon-carbide chips. This strategic partnership, revealed during Modi’s Quad summit visit, aims to boost India’s manufacturing sector, create jobs, and secure semiconductor supply chains, strengthening US-India cooperation in critical technologies.

• HSBC is set to join the burgeoning AI infrastructure finance market, according to Gerry Keefe, who revealed the bank’s plans in a Bloomberg TV interview. This move comes as industry giants BlackRock and Microsoft aim to raise $30 billion in private equity for AI initiatives, signaling a significant surge in investment in the sector.

• Telegram to Share More User Data with Governments: CEO Durov. Telegram will comply with government requests for user data, CEO Pavel Durov announced, as he faces charges in France tied to illegal activities on the app.

• The House passed a bill limiting NEPA reviews for Intel and TSMC projects, sending it to President Biden for signature. The bill aims to accelerate domestic semiconductor production and reduce US dependence on Asia.

• Grammarly Names New CFO, CTO Ahead of Potential IPO. Grammarly appoints Mark Schaaf (ex-Instacart) as CTO and Navam Welihinda (ex-HashiCorp) as CFO, bolstering its leadership team with IPO-experienced executives.

• OpenAI has officially launched its voice assistant feature to all paid ChatGPT users, following a temporary delay to address potential safety concerns.

• The FBI has raided the Virginia offices of Carahsoft, a leading IT distributor to the US government, as part of an undisclosed investigation.

• Google is facing two separate antitrust challenges from the US Department of Justice, and according to CEO Sundar Pichai, the legal battles are expected to extend for several years.

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