Source: Global Market Broadcast
The main headlines that the global financial media focused on last night and this morning were:
1. United States mortgage rates rose to their highest since early August, leading to a sharp decline in home buying and refinancing activity
2. European stocks fell Dragged down by the decline in LVMH sales and the sharp decline in orders from ASML
3. ASML's heavy setback shows that the fate of various chip manufacturers is very different, and AI-related demand is strong while other fields are weak
4. Tech giants compete for clean energy Amazon officially announced a nuclear power deal
5. Boeing is considering raising $15 billion through equity and bond offerings
6. Billionaire investor Druckenmiller: The market is very sure that Trump will win
United States mortgage rates rose to their highest since early August, leading to a sharp drop in home buying and refinancing activity
The contract rate on 30-year fixed-rate mortgages rose 16 basis points to 6.52% in the week ended Oct. 11, according to data released Wednesday by the United States Mortgage Bankers Association (MBA). The rate has risen by 38 basis points over the past two weeks, the largest since February 2023.
Mortgage rates, which track United States Treasury yields, have been rising recently as economic data showed strong job growth and sticky inflation, prompting traders to cut bets on big rate cuts.
Rising mortgage rates are dispelling hopes for a swift recovery in the housing market. High interest rates and high asking prices have been plaguing the real estate market.
European stocks fell on the back of a decline in LVMH sales and a sharp drop in orders from ASML
European stocks closed lower after a volatile Wednesday afternoon as investors weighed the negative sentiment sparked by an unexpected drop in sales by luxury giant LVMH and ASML's disappointing outlook.
The STOXX Europe 600 closed down 0.2%, off its earlier lows. Travel, retail and telecom stocks led the gains, while consumer, personal goods and technology lagged.
LVMH shares fell as much as 7.5% after Europe's second-largest company by market capitalization reported a decline in sales of fashion leather goods for the first time since the pandemic, exposing sluggish consumer demand. Other high-end consumer stocks that were more affected by the market, including L'Oréal, Hermès International and Richemont Group of Switzerland, were also affected.
The luxury sector took a hit after ASML's outlook sparked a plunge in global tech stocks. ASML shares fell as much as 5.8 percent on Wednesday, about a quarter of the STOXX 600 index decline, while the Philadelphia Semiconductor Index combined with the Asian semiconductor giants lost more than $420 billion in market capitalization.
ASML's heavy setback shows that the fate of various chip manufacturers is very different, and AI-related demand is strong and other areas are weak
After tumbling 16% on Tuesday, its biggest drop in 26 years, the Netherlands company plunged 5.8% on Wednesday. ASML's monopoly in producing state-of-the-art chip-making equipment is a barometer of the health of companies such as Intel, Samsung Electronics and TSMC. Its performance fell short of expectations, triggering a general decline in the semiconductor sector.
Its earnings report shows that the fate of various chipmakers is very different, with demand for semiconductors that can handle the complex workloads of artificial intelligence (AI) programs surging, while demand in other areas is sluggish. ASML did not provide a specific reason why orders fell short of half of analysts' forecasts in the third quarter, saying only that some customers were delaying the construction of factories.
Nvidia, a leader in AI accelerators, has said it can't produce enough chips to meet demand. But companies like Intel and Samsung, which order state-of-the-art equipment from ASML, have struggled lately.
Tech giants scramble for clean energy Amazon officially announced a nuclear power deal
Amazon today announced an agreement to support the construction of next-generation nuclear power plants in Washington state, marking the latest development in the renaissance of nuclear energy technology.
Amazon has struck an agreement with Energy Northwest to finance the initial feasibility phase of a nuclear facility in central Washington and the right to buy electricity from the 320-megawatt plant.
This year, Amazon, Microsoft, and Google have all announced plans to purchase nuclear energy to fuel their data center operations. As AI increases computing needs, their data center operations are growing rapidly. Nuclear energy is attractive because it produces no carbon emissions and can operate 24 hours a day, while wind and solar can only be used intermittently.
Boeing is considering raising $15 billion through equity and bond offerings
Boeing said in a regulatory filing on Tuesday that it could raise up to $25 billion through the issuance of bonds and shares. Bloomberg News reported this month, citing people familiar with the matter, that Boeing is considering a capital increase of at least $10 billion.
The listing allows Boeing to use a variety of financing options, including the issuance of any combination of instruments such as common stock, preferred stock, senior notes and subordinated bonds. Boeing said Tuesday that the move offered "multiple capital options" to support the balance sheet over a three-year period.
Billionaire investor Druckenmiller: The market is very sure that Trump will win
Billionaire investor Stan Druckenmiller said markets are pricing in a Donald · Trump victory ahead of next month's United States presidential election.
Over the past 12 days, the market seems "pretty convinced that Trump will win," Druckenmiller said in an interview on Wednesday, "and you can see this trend in bank stocks, and you can see this in cryptocurrencies." ”
However, he will neither vote for Trump nor for current Vice President Harris. Druckenmiller called Mr. Trump a "braggart king," arguing that he did not have enough authority to be president, while saying that Harris would be bad for business if she was in the White House.