Sept 01, 2022
TradeUP Thursday
Latest news and bulletin updates
Market Trends
Dow Jones  up
S&P 500  up
(Opening price as of 09/01/2022 compared to last close)
Weekly Highlights
#1 Nvidia gets limited licenses for chip exports
#2 Bed Bath & Beyond announced stock sale, job cuts
#3 Berkshire revealed first sale of BYD stock in 14 years
#4 G7 finance chiefs to discuss a Russian oil price cap on Friday
Share Your Thoughts:

Aggressive rate hikes ahead; Employment Situation report to be released Friday

Fed chief Powell spoke briefly last Friday on his determination to fight inflation. He said that the central bank will further increase rates, and there will very likely be some softening of labor market conditions. Other Fed officials saw interest rates rising further and the need to keep rates at a high level for some time.

•New York Fed chief John Williams said interest rates probably need to advance above 3.5% at some point to achieve their goal. It’s going to take time before downward adjustments are expected to be seen. 
•Atlanta Fed chief Raphael Bostic called the duty to curb inflations “unshakable,” but said he’s open to dialing back the pace of increases if prices cool.

The Fed has targeted a 2% PCE rate as their target for cooling inflation. The index fell by 0.1% to 6.3% in July as gas prices decreased. However, it is still at a 40-year high. And with geopolitical conflicts putting pressure on crude oil prices and high mortgage rates pushing more potential home buyers into the rental market, oil and rent prices will continue to be highly volatile in the near future, making it difficult to mark the peak of inflation.

Investors are now turning their eyes to the health of the labor market for a read on the future path of Fed’s policy. Companies sharply slowed the pace of recruitment in August amid growing fears of an economic slowdown, according to payroll processing company ADP. Private payrolls grew by just 132,000 for the month, a deceleration from the 268,000 gains in July, and the Dow Jones estimate for the ADP count was 300,000. The Bureau of Labor will release its Employment Situation report on Friday, and the Dow Jones estimate for non-farm payrolls in August is 318,000.
How do you think the market will react after employment statistics are released on Friday?
A.Bottom out and rally B.Plunge for the sixth consecutive session C.Remain unaffected
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Inside Scoop

#1. Nvidia gets limited licenses for chip exports

• The company warned that new rules governing the export of AI chips to China may affect $400 million in revenue. Its A100 and forthcoming H100 products will require approval from the US government before being sold to Chinese customers. 

• AMD said that it received a similar notice from the US government, but it doesn’t expect the effect to be material.

#2. Bed Bath & Beyond announced stock sale, job cuts

• The company has secured $500 million of new financing and is preparing to sell up to 12 million shares to help repay debt.

• Bed Bath & Beyond is also cutting 20% of jobs and closing about 150 lower-producing stores to cut cost.

#3. Berkshire revealed first sale of BYD stock in 14 years

• Buffett began to cut positions in the Chinese version of Tesla, BYD, which led to wide discussion among both capital markets and US media.

• Shares of BYD fell 8% on Wednesday in HK following reports that Berkshire Hathaway sold 1.33 million local shares of the EV firm.

#4. G7 finance chiefs to discuss a Russian oil price cap on Friday

• G7 leaders have also considered other alternatives, including blocking the transportation of Russian oil. On Wednesday, US Treasury Secretary Yellen and Britain's new finance minister Nadhim Zahawi discussed the price cap plan and sustaining Ukraine's economic needs.

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