Market Highlights 💡 - 4 October 2024

Global market sentiment is mixed, with US non-farm payroll data released on Friday being the main focus; the Hang Seng Index fell due to profit-taking at high levels.

🇺🇸 S&P 500: -0.17%

🇺🇸 Nasdaq: -0.04%

🇪🇺 Euro Stoxx 600: -0.92%

🇯🇵 Nikkei 225: 1.97%

🇭🇰 Hang Seng: -1.47%

🇨🇳 CSI 300: Market Closed

🇸🇬 Straits Times Index: -0.20%

US stock markets showed mixed results, with the S&P 500 slightly down by 0.2% and the Nasdaq performing flat. Market sentiment became increasingly cautious ahead of the highly anticipated employment report, as investors reassessed expectations for further easing of Federal Reserve policy. The energy sector rose by 1.6%, in line with oil prices, amid ongoing Middle East conflicts.

For the week ending September 28, US unemployment claims increased by 6,000 to 225,000, exceeding the forecast of 222,000 and up from 218,000 the previous month. This is another strong indication of a stabilizing labor force. However, Hurricane Helen and port strikes in the US are potential short-term factors contributing to labor distortions.

S&P Global's US services PMI was revised down from an initial reading of 55.4 to 55.2 in September, slightly below August's 55.7, but still indicating strong growth. New business and sales price inflation accelerated, but business confidence fell to its lowest level since October 2022, while employment numbers saw a slight decline.

The Hang Seng Index decreased by 1.5% due to profit-taking after a strong rise driven by optimism from stimulus plans.

Upcoming Events:

By the end of this week, we will see the release of US non-farm payroll numbers and the unemployment rate.

Things to Know Today:

1. US crude oil prices rose by 5% due to market expectations that Israel's strong stance on retaliatory strikes will impact Iran's oil industry. President Biden indicated he might help Iran conduct attacks, which catalyzed the surge in oil prices. Given that OPEC+ currently has adequate supply, upward pressure on oil prices should be controlled, though an escalation of the conflict remains a potential risk.

OPEC

2. US port strikes have been suspended, thanks to the main union representing dockworkers and the maritime alliance reaching a temporary wage agreement and extending the existing contract until January 15, allowing time to negotiate a new contract. This week, the strike caused containers to be misdirected to the wrong ports, leaving billions of dollars' worth of goods stranded at sea.

US Port Strike

3. Blackstone $Blackstone Group LP(BX)$  , the world's largest alternative asset management firm, has begun raising a third private equity fund focused on Asia, targeting at least $10 billion, primarily focusing on India, with China currently not in consideration. Japan and Australia will be two other key markets. Sources indicate that capital allocation may not remain static and strategies could change based on the macroeconomic environment.

Blackstone

4. OpenAI ended its latest funding round with a valuation of $157 billion, including $6.6 billion raised from investors such as Thrive Capital, Microsoft $Microsoft(MSFT)$  , Nvidia $NVIDIA Corp(NVDA)$  , and SoftBank. The company now has a $4 billion revolving credit facility, bringing its total liquidity to over $10 billion, providing room for expansion.

OpenAI

5. Chinese investment-grade companies are raising $10 billion to $15 billion this quarter, marking the highest level in three years, as robust economic stimulus measures have reduced fundraising costs and spurred borrower interest. Last week, the sector raised about $5.9 billion in dollar and euro bonds, making it the busiest week for offshore debt financing this year.

Key Points:

The September non-farm payroll data is about to be released. Given the orderly slowdown in prices and employment conditions, market prospects are optimistic, which helps adjust the key indicators for the Federal Reserve's rate-cut pricing by the end of the year. The market generally expects an increase of 140,000 jobs, with the unemployment rate expected to remain stable at 4.2%.

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