Consulting, Newsletter, Tech

Weekly Market Recap | Oct 07 – Oct 13

Posted on by Ali

Key Takeaways

  1. S&P 500 Nears Record High: The index approaches 5,780, driven by financial stocks’ gains ahead of earnings season, with Apple rising 1.5% and Nvidia pausing its rally.

  2. US Justice Department Targets Google: A historic breakup of Google is being explored, focusing on its dominance in online search and advertising, with proposed remedies including divestments and data access.

  3. China’s Economic Stimulus: Beijing introduces measures to support the property sector, allowing local governments to buy unsold homes with special bonds, and signals more borrowing to boost the economy.

  4. JPMorgan Beats Estimates: Q3 net interest income rises 3%, with investment banking fees surging 31%, despite CEO Jamie Dimon’s warning of worsening geopolitical risks.

  5. European Central Bank to Cut Interest Rates Amid Eurozone Slowdown: This decision has significant implications for the global economy, as it can impact borrowing costs, currency values, and overall economic growth. The rate cut is expected to stimulate economic activity in the eurozone.

IPO’s in the week

  • Upstream Bio, Inc. is a clinical-stage biotechnology company developing treatments for inflammatory diseases, with an initial focus on severe respiratory disorders. Upstream Bio (UPB) debuted on the Nasdaq at $17.00, and offered 12,500,000 shares as of October 11, 2024.

  • Ceribell is a commercial-stage medical technology company focused on transforming the diagnosis and management of patients with serious neurological conditions. CeriBell (CBLL), listed on the Nasdaq, closing at $17.00, following its initial public offering of 10,606,060 shares on October 11, 2024.

  • Camp4 Therapeutics Corp is a clinical-stage biopharmaceutical company pioneering the discovery and development of regulatory RNA-based therapeutics. The company focuses on upregulating gene expression and restoring healthy protein levels to treat various genetic diseases, with an emphasis on those affecting the central nervous system and liver. Camp4 Therapeutics (CAMP), listed on the Nasdaq, closed at $11.00, following its initial public offering of 5,000,000 shares on October 11, 2024.

  • Cohen Circle Acquisition I is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. Cohen Circle Acquisition I (CCIRU), listed on the Nasdaq, closed at $10.00 with no change, following its initial public offering of 20,000,000 units on October 11, 2024.

  • Star Fashion Culture Holdings Limited operates as a holding company, providing content marketing solutions through its subsidiaries. The company’s services include event planning and execution, offline advertising, online precision marketing, and other related offerings, primarily catering to customers in China. Star Fashion Culture Holdings (STFS), listed on the Nasdaq, closed at $4.00, following its initial public offering of 2,600,000 shares on October 11, 2024.

  • Rising Dragon Acquisition Corp is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization, or similar business combination with one or more businesses or entities. Rising Dragon Acquisition (RDACU), listed on the Nasdaq, following its initial public offering of 5,000,000 units on October 11, 2024.

  • Click Holdings Limited (CLIK) announced an initial public offering of 1,500,000 shares on the Nasdaq, effective October 9, 2024, at $4.00 per share.Click Holdings is a human resources solutions provider, offering comprehensive services in three main sectors Professional solution services, Nursing solution services, Logistics, and other solution services.

  • KinderCare Learning Companies (KLC) announced an initial public offering of 24,000,000 shares on the NYSE, effective October 9, 2024, at $24.00 per share. As a pioneering early education provider, KinderCare has developed innovative solutions to enhance teacher selection and development, including the industry’s first teacher selection tool based on talent research of best-in-class teachers. The company also offers a comprehensive Total Rewards benefits package and industry-leading Professional Development programs, setting a new standard in early education. 

  • Launch Two Acquisition (LPBBU), a blank-check company, launched an initial public offering (IPO) of 20 million shares on the Nasdaq exchange at $10 per share, effective October 8, 2024. The company, formed to facilitate a merger, amalgamation, or business combination, seeks to acquire or merge with one or more unspecified businesses, providing a platform for potential future growth and expansion.

  • SKK Holdings (SKK), a Singapore-based civil engineering service provider specializing in subsurface utility works, launched an IPO of 2.5M shares on Nasdaq at $4.00/share, on Oct 8, 2024. SKK focuses on planning, constructing, and maintaining public works and infrastructure projects that benefit society and the environment, serving as a key player in Singapore’s civil engineering sector.

Markets this week

  • The S&P 500 is approaching a record high as Wall Street anticipates key inflation data. The index nears 5,780, marking its 44th record in 2024, driven by gains in financial stocks ahead of the earnings season. Major tech stocks showed mixed results—Apple rose 1.5%, while Nvidia paused its rally, and Alphabet fell 2.2% amid antitrust concerns.

  • The US Justice Department is exploring a historic breakup of Google, targeting its dominance in online search and search advertising. Proposed remedies include forcing Google to divest parts of its business or grant broader access to its search data and AI products.

  • Chinese stocks saw their biggest decline since 2020, with the CSI 300 Index dropping 7.1% as investors grew frustrated with Beijing’s slow rollout of stimulus measures. Investors are now looking for additional fiscal support, with banks estimating up to 3 trillion yuan ($283 billion) in aid to boost the economy.

  • Alibaba’s e-commerce arm Lazada aims to reach $100 billion in sales by partnering with luxury brands like Armani and Dolce & Gabbana, as it ramps up efforts to revamp its global business and compete with TikTok and Shopee in Asia.

  • Citigroup and Mastercard partner to enable 24/7 cross-border debit-card payments, providing consumers and businesses a seamless and efficient way to conduct international transactions.

  • Bank of America is losing business in Asia after allegations that its bankers in India shared nonpublic information ahead of stock sales. This led to an internal investigation and the bank being dropped from upcoming IPOs. Two bankers were placed on leave amid the probe.

  • JPMorgan posted a surprise 3% rise in Q3 net interest income and raised its 2024 forecast. Investment banking fees surged 31%, beating estimates. CEO Jamie Dimon warned of worsening geopolitical risks, while the bank’s shares rose 3.6%.

  • Nigeria’s National Petroleum Corp. and partners, including Shell, signed a deal to supply gas to a $3.3 billion methanol plant. The project is expected to generate $1.5 billion annually, reduce fertilizer imports, and create jobs.

  • China introduced measures to support its property sector and signaled more borrowing to boost the economy. Local governments can use special bonds to buy unsold homes, with trillions of yuan in expected fiscal stimulus to address debt and spur growth.

  • The European Central Bank (ECB) is expected to cut interest rates in response to a slowdown in the eurozone economy.

  • China’s economic data is likely to reflect ongoing underperformance, highlighting challenges in meeting growth targets.

  • Gold prices climbed for the fifth straight week, reaching $2,657.60 an ounce, near last month’s all-time high of $2,694.90, with SPDR Gold shares up 1.1%. Gold has gained $164.10, or 6.58%, over the past five weeks.

  • Front Month Comex Silver for October delivery lost 60.80 cents, or 1.89%, closing at $31.520 this week.

Politics Weekly

  • Hurricane Milton left over 3 million homes and businesses without power in Florida, causing severe flooding and damaging Tropicana Field. The Category 1 storm brought up to 18 inches of rain, with ongoing flood risks. Estimated damages range from $60 billion to $75 billion.

  • The U.S. budget deficit reached $1.8 trillion in 2024, driven by escalating costs for interest payments, Social Security, and Medicare. Proposals from both Donald Trump and Kamala Harris could further increase the deficit.

  • More Americans now identify as Republicans than Democrats, giving the GOP a potential advantage in the 2024 election. However, Kamala Harris still leads in many polls, driven by support from independent voters. Party affiliation alone may not determine the election outcome.

  • A Wall Street Journal poll shows a tight race between Donald Trump and Kamala Harris in key battleground states. Trump leads on the economy and border security, while Harris holds narrow leads in some states. Both are nearly tied nationally, with independent and undecided voters likely to decide the outcome.

  • The IMF has asked Pakistan to halt offering tax incentives for new and existing special economic zones, which may hinder efforts to attract Chinese industries under the Belt and Road Initiative.

  • At the ASEAN summit in Laos, China advanced its economic interests by announcing new agreements, overshadowing US efforts to strengthen ties in the region.

  • Russia has proposed a BRICS payment system to reduce reliance on the US dollar and bypass sanctions. The system would enable cross-border transactions in local currencies and utilize distributed ledger technology (DLT) to lower costs and processing times.

  • The US is sending the Terminal High-Altitude Area Defense (THAAD) system to Israel to enhance its air defense against Iranian missile threats.

  • Israel’s tax authority estimates damage from Iran’s recent missile attacks at 150-200 billion shekels ($40-53 million), with about 2,500 claims filed, primarily for residential properties.

  • A drone strike in northern Israel’s Binyamina region injured over 60 people, with conditions ranging from critical to mild. Hezbollah claimed responsibility for the attack, which targeted an Israeli Golani infantry training camp using a swarm of drones.

Technology Advancements this week

  • Samsung Venture joins forces with Intervest and Atinum Investment to invest $29 million in Liner, an innovative AI search engine designed to streamline research and information retrieval for students and academics.

  • Tata Consultancy Services (TCS), Asia’s largest IT services firm, missed Q2 estimates due to weak tech spending, but the CEO expects US industry confidence to boost with anticipated Federal Reserve rate cut.

  • Tesla’s highly anticipated Robotaxi reveal puts its “Dream Premium” valuation to the test, following a 70% stock surge since April, driven by Elon Musk’s AI pivot. Analyst Sacconaghi from Bernstein predicts investors may sell on the news.

  • OpenAI Chairman Bret Taylor’s startup, Sierra, is in talks to raise hundreds of millions of dollars, valuing the enterprise AI firm at over $4 billion.

  • Etsy CFO Rachel Glaser turns to AI and cloud tech to boost user spending amid economic uncertainty, introducing features like “gift mode” to reinvigorate its 95M+ active users.

  • Guangzhou Automobile Group Co. plans to establish car assembly plants in Europe and South America by 2026 to bypass tariffs on Chinese-made electric vehicles, expanding its global footprint.

  • AMD’s shares declined as investors await signs of progress in the company’s AI endeavors. AMD is racing to catch up with Nvidia in AI accelerators and is set to unveil new products at an event on Thursday.

  • Noel Tata, Ratan Tata’s half-brother, is the leading candidate to succeed as chairman of the $165 billion Tata Group, with Tata Trusts holding a controlling 66% stake in Tata Sons.

  • The US is vying for a nuclear energy deal with Ghana, leveraging its advanced technology to counter Russia’s Rosatom, which has already signed nuclear agreements in Africa. US development finance arms are poised to provide funding support.

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