Macro at a glance
On September 24, China's government and central bank unveiled stimulus measures targeting 5% economic growth. Chinese stock markets surged dramatically, with the CSI 300 index gaining 25% between September 23-30—"their biggest weekly rises since 2008."
The Federal Reserve reduced rates by 50 basis points on September 18, following intense speculation about cut magnitude. Jerome Powell emphasized the economy's strength and employment resilience while declaring inflation under control. Market participants questioned this substantial cut, suggesting a 25 basis point reduction would better align with the described economic robustness.
France established a new government on September 21 under Prime Minister Michel Barnier. The cabinet confronts significant fiscal challenges, including 2025 budget creation amid an anticipated public deficit of 6% of GDP and existing public debt at 112% of GDP.
Tensions escalated dramatically in the Middle East following coordinated Hezbollah device detonations on September 17-18. Israel launched extensive military operations in southern Lebanon involving fighter jets, drones, missiles, and rockets. On September 27, Israeli strikes killed Hezbollah leader Hassan Nasrallah alongside numerous other militant commanders, resulting in hundreds of casualties.
One Sector, One Insight
Basic Materials and Energy
Rolls-Royce secured a contract on September 18 to construct small-modular nuclear reactors in the Czech Republic, capable of generating 470 megawatts. The company simultaneously qualified as one of four finalists for a "potential multi-billion pound contract" to produce modular power plants in the UK.
Consumption and General Public Services
Following China's economic stimulus announcements, luxury goods stocks experienced exceptional gains during late September. LVMH, Hermès, Kering, L'Oréal, and Richemont all appreciated between 10-17%. LVMH simultaneously announced a 10% stake acquisition in Double R, a holding company controlled by Moncler CEO Remo Ruffini, triggering a 15% surge in Moncler shares.
Financial Services
UniCredit acquired over 53 million Commerzbank shares, reducing the German government's stake to 12% and creating acquisition pathway opportunities. The resulting entity would exceed Deutsche Bank in scale. Germany's government vocally opposed the move as "hostile," citing employment and SME financing concerns. UniCredit maintains €10 billion for acquisition purposes, though political resistance persists.
Healthcare
Roche actively pursues obesity treatments following its 2023 acquisition of Carmot Therapeutics for $3.1 billion. An injectable treatment demonstrated strong early trial results, positioning Roche against competitors Eli Lilly and Novo Nordisk. However, Roche's oral obesity treatment exhibited "stronger-than-expected side effects," dampening rollout confidence.
Industrials
Boeing experienced significant disruption as 32,000 machinists initiated strikes primarily in Seattle and Portland. Union members rejected a 25% four-year pay increase with 95% opposition, halting 737 MAX production. Boeing subsequently improved its proposal to 30% wage increases while restoring performance bonuses, though unions demanded 40% increases and pension benefit reinstatement. This strike could cost Boeing up to $3 billion.
Technology and Network Equipment
Intel reported over $7 billion in operating losses, though stock prices rose following Apollo Global Management's proposed $5 billion investment announcement. Qualcomm expressed acquisition interest in Intel, facing potential regulatory obstacles. Super Micro Computer Inc. faced scrutiny over alleged financial statement manipulation despite strong computing system demand. Intel shares declined over 50% year-to-date.
The Stock of the Month
NIO Inc., a Chinese electric vehicle manufacturer, surged 70.6% in September, driven by government stimulus initiatives and investor confidence in the company's competitive positioning within China's rapidly expanding EV market.
Key Performances
| Index/Asset | September 30 Value | Monthly Change | YTD Change |
|---|---|---|---|
| S&P 500 | 5,762.48 | 4.22% | 21.50% |
| Dow Jones | 42,330.15 | 3.40% | 12.24% |
| NASDAQ | 18,189.17 | 6.14% | 23.18% |
| FTSE 100 | 8,236.95 | -1.52% | 6.68% |
| CAC 40 | 7,635.75 | -0.13% | 0.77% |
| DAX | 19,324.93 | 2.30% | 14.83% |
| SMI 20 | 12,168.87 | -2.03% | 8.60% |
| MSCI World | 3,723.03 | 1.69% | 17.48% |
| VIX | 16.72 | -19.26% | 26.74% |
| CHF/USD | 1.1818 | 0.34% | -0.49% |
| CHF/EUR | 1.0617 | -0.28% | -1.33% |
| Brent Crude | $71.88/bbl | -1.94% | -5.28% |
| Gold Spot | $2,654.80/oz | 5.24% | 28.06% |
Upcoming Events
- October 10: September 2024 US CPI Release
- October 11: September 2024 US PPI Release
- October 18: Chinese GDP Release
- October 24: UPS Q3 Earnings