On Monday Eastern Time, the three major US stock indexes closed with mixed gains and losses, and investors assessed the possibility of a significant interest rate cut by the Federal Reserve this week. Large tech stocks have fluctuated, with Intel rising over 6%, Apple falling over 2%, and Nvidia and Tesla falling over 1%.
On the news front, this week, the world will start the "Super Central Bank Week", and the focus of financial markets is undoubtedly the interest rate decision to be announced by the Federal Reserve in the early morning of September 19th Beijing time. Traders are currently increasing their bets on a 50 basis point rate cut by the Federal Reserve. According to CME's Federal Reserve Watch tool, the market currently expects the likelihood of the Fed cutting interest rates by 50 basis points to rise to 59%, up from 43% last Friday. It can be foreseen that the key decision that the Federal Reserve is about to make is likely to trigger a global financial market shock.
The Dow Jones Industrial Average hits a historic high
As of the close of the US stock market, the three major indexes of the US stock market have fluctuated, with the Dow Jones Industrial Average reaching a historic high. As of the end of the day, the Dow Jones Industrial Average rose 228.30 points from the previous trading day, closing at 41622.08 points, an increase of 0.55%; The S&P 500 stock index rose 7.07 points to close at 5633.09, an increase of 0.13%; The Nasdaq Composite Index fell 91.85 points to close at 17592.13, a decrease of 0.52%.
Large tech stocks have fluctuated, with Intel rising over 6%, Meta rising over 1%, Microsoft and Google rising slightly, Nvidia and Tesla falling over 1%, and Amazon and Netflix falling slightly.
It is worth mentioning that Apple fell more than 2% and its market value evaporated by $93.9 billion (approximately RMB 665.7 billion).
On the news front, analyst Guo Mingchi from Tianfeng International stated that the estimated pre order sales of iPhone 16 series in the first weekend were about 37 million units, a decrease of about 12.7% compared to the first weekend sales of iPhone 15 series last year. The key reason is that the iPhone 16 Pro series was lower than expected. Guo Mingchi pointed out that the shipment time of iPhone 16 Pro series is significantly lower than that of 15 Pro series. In addition to the increase in stock before pre order, the key factor is that the demand is lower than expected, as seen from the year-on-year decrease in sales in the first weekend. It is worth noting that the sales of iPhone 16 Plus and iPhone 16 increased during their first weekend, but their contribution to improving overall iPhone shipments was limited.
Banks, precious metals, and aviation sectors led the way in gains, with Alcoa rising over 6%, Century Aluminum rising over 4%, Carnival Cruise rising over 3%, United Airlines, Norwegian Cruise, Harmony Gold, and Gold Fields rising over 2%, and Citigroup, Bank of America, and Morgan Stanley rising over 1%.
Most popular Chinese concept stocks fell, with the Nasdaq China Golden Dragon Index falling 0.58%. NIO fell more than 2%, Alibaba and Bilibili fell more than 1%, while NetEase, Weibo, Xiaopeng Motors, Ideal Motors, Tencent Music, and Futu Holdings fell slightly. Pinduoduo rose by over 2%, Manbang rose by over 1%, and Baidu, Vipshop, and JD.com rose slightly.
Commodity market: International oil prices have risen. As of the close of the day, the price of light crude oil futures for October delivery on the New York Mercantile Exchange rose by $1.44, closing at $70.09 per barrel, an increase of 2.10%; The London Brent crude oil futures price rose by $1.10 to close at $72.75 per barrel, an increase of 1.55%. International gold prices fell, and as of the close of the day, the COMEX gold futures main contract fell $1.80 per ounce, a decrease of 0.07%, to $2608.90 per ounce.
Intel rises by over 6%
Intel rose over 6% on Monday, and its stock price briefly rose 11% after hours. The company announced plans to transform its wafer foundry business into an independent department with an independent board of directors and the possibility of raising external funds.
According to foreign media reports, as part of CEO Pat Kissinger's efforts to turn the struggling chip manufacturer around, Intel stated in a memo to employees that the company will also sell some of its Altra shares.
Kissinger stated that this restructuring will enable the wafer foundry business to "evaluate independent funding sources," just a few days after Intel's board of directors held a meeting to assess the company's direction and future. The company plans to use its wafer foundry business to manufacture chips for other customers, but this has been a serious drag on its performance, with the company investing approximately $25 billion annually in the past two years.
CNBC
According to insiders, in addition to considering external financing, Intel is also weighing whether to spin off its wafer foundry business and possibly establish a separate listed company. By establishing an independent 'operational board' and a clearer corporate structure, the operational mechanism of spin off becomes much simpler compared to turning a fully integrated department into an independent company.
Before the surge in after hours trading, Intel's market value had shrunk by nearly 60% this year. The company has given up its market share in its core personal computer and data center businesses, and watched helplessly as Nvidia snatched up market share in the artificial intelligence chip market. In August of this year, Intel released disappointing quarterly results, triggering the most intense sell-off in 50 years, and announced that it would lay off more than 15% of its workforce as part of its $10 billion cost cutting plan. Kissinger stated that approximately half of the company's layoff plan has been completed so far.
Kissinger also stated that Intel will suspend its wafer fab construction plans in Poland and Germany for "approximately two years" based on "expected market demand," and reduce the scale of its factory construction in Malaysia. The company stated that manufacturing projects in the United States will not be affected.
Earlier on Monday, the Biden administration provided Intel with up to $3 billion in funding aimed at supporting domestic chip manufacturing in the United States.
In addition to the announcement of its wafer foundry business, Intel also stated that it has reached an agreement with Amazon Web Services to produce customized chips for artificial intelligence, thereby expanding the long-term partnership between the two parties. Amazon is a major customer for Intel chips used in AWS servers and will purchase custom versions of Xeon processors from Intel.
This move may help Intel establish a firm foothold in the growing artificial intelligence server chip industry. Although Intel has multiple products available for artificial intelligence, including the Gaudi 3, Nvidia has essentially controlled the market.
For the past five years, Amazon has been developing its own AI chips, one of which is called Trainium. Microsoft and Google have also invested heavily in developing custom chips for running AI, aiming to provide chips that are cheaper than Nvidia's general-purpose graphics processors.
Intel has stated that it will conduct state-of-the-art production at its ongoing Ohio factory, including artificial intelligence chips for AWS.
Everyone will continue to pay attention to us, "Kissinger said." We need to fight for every inch of land and execute it better than ever before. Because this is the only way to quell criticism and deliver the results we are capable of achieving
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