Goolsbee’s ‘golden path’ is still visible
Austan Goolsbee, president and chief executive officer of the Federal Reserve Bank of Chicago, during a Bloomberg Television interview at the Jackson Hole economic symposium in Moran, Wyoming, US, on Friday, Aug. 25, 2023.
David Paul Morris | Bloomberg | Getty Images
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What you need to know today
A fierce winning streak
U.S. stocks rose Tuesday to hit fresh winning streaks, their longest in three years. Europe’s Stoxx 600 closed 0.16% lower. The oil and gas sector dropped 2.5%, weighed down by Saudi oil giant Aramco’s 23% fall in third-quarter net profit and a decline in oil prices. UBS shares rose 1.83% after the bank reported its first full quarterly results since taking over Credit Suisse.
Microsoft closes at a high
Microsoft shares climbed 1.12% to hit $360.53, a record high. It’s the eighth consecutive day in which the technology giant’s shares rose, a streak unseen since January 2021. Investors cheered Microsoft CEO Satya Nadella’s surprise appearance at OpenAI’s event, where he encouraged developers to build with Microsoft’s Azure cloud infrastructure.
Peak, not pause?
The U.S. Federal Reserve, European Central Bank and the Bank of England all paused interest rate hikes in recent weeks. This breather comes after dramatic hikes over the last 18 months as central banks grappled with unruly inflation. Some market watchers, in fact, think this lull in hikes isn’t so much a pause but the peak in rates — and are turning their attention to when central banks will start cutting.
Uber’s miss
Uber’s third-quarter results missed analysts’ expectations. The company’s earnings per share came in at 10 cents, compared with the expected 12 cents. Revenue was $9.29 billion, less than the $9.52 billion estimated. Still, on a year-over-year basis, Uber made a net income of $221 million, compared with a net loss of $1.2 billion, while revenue’s up 11% from the same period last year. Shares popped 3.7%.
[PRO] Japan banks to benefit
The Bank of Japan announced last week it would allow more flexibility in its yield curve control policy, taking the upper bound of 1% yield for the 10-year Japan Government Bond “as a reference.” That’s good news for the banking sector, said Goldman Sachs. The investment bank also named its top picks among Japan’s banks, suggesting they would enjoy up to 20% upside on their stock prices.
The bottom line
Last month’s sudden surge in Treasury yields and oil prices — both of which tend to suppress investors’ appetite for stocks — looks to be ending. No, scratch that — the increases aren’t just ending, they’re ebbing.
Look at oil: Contracts for both West Texas Intermediate and Brent futures fell around $3. WTI’s now at $77.13 a barrel while Brent’s $81.41, their lowest since July. That’s almost $10 per…
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