The MSCI China index surged 5.2% yesterday, and Wall Street, despite its usual detachment from Chinese affairs, joined the celebration. The S&P 500 hit its 41st record of the year, the Dow Jones followed suit, and Nvidia rebounded by 4%. Even the French CAC40 index got a lift, due to hopes that the plan will lead to a resurgence in China's urban middle class splurging on luxury items from LVMH, which saw its biggest daily gain since January, up 3.2%.

However, the euphoria didn't last. Analysts remain cautious about the sustainability of China's stimulus measures, pointing to persistent economic woes like a faltering real estate market and rising youth unemployment. Futures on Wall Street stayed flat in premarket trading, and the Euro Stoxx 50 dipped 0.2%. The consensus is that China's measures, while a step in the right direction, are not yet comprehensive enough to fully revive the economy. Barclays summed it up aptly: "China is firing harder, but not yet with a bazooka." In a logical follow-up to Tuesday's announcements, the People's Bank of China cut its medium-term rate this morning.

Yet, European and US markets remain jittery over fears of a global economic slowdown. Recent PMI indicators in the Eurozone and declining consumer confidence in the US have only added to the anxiety. Speculation is rife that central banks may need to further ease monetary policies to stave off economic downturns. The European Central Bank is expected to cut rates by 75 basis points by year-end, while the US Federal Reserve is anticipated to cut by 50 basis points.

Meanwhile, Nvidia, the darling of the semiconductor sector, enjoyed a double dose of good news. Morgan Stanley issued a positive note on demand for Nvidia's latest GPU, and a stock exchange notice revealed that CEO Jensen Huang had completed a share disposal plan ahead of schedule, netting over $700 million in three months. Thanks to Nvidia and other Chinese-boosted companies like PDD, which soared 11%, the Nasdaq 100 nearly breached the 20,000-point barrier, its highest level since July 17.

In other market news, BioAge Labs is eyeing a $639.7 million valuation for its US IPO, driven by strong investor demand. The anti-obesity drug developer plans to raise up to $199.5 million by offering 10.5 million shares at $17 to $19 each, up from an initial plan of 7.5 million shares.

On the geopolitical front, the situation in Lebanon remains dire as Israel continues its offensive against Hezbollah, prompting a mass exodus of civilians. Diplomacy appears powerless, evoking memories of the 1980s.

Today's macroeconomic agenda is light, but the rest of the week promises to be eventful. Tomorrow, expect a barrage of speeches from US central bankers, and on Friday, the market will scrutinize the August PCE inflation figures and the refined University of Michigan consumer confidence index. With the American consumer's behavior under the microscope, financiers are keen to gauge the severity of the economic landing ahead. As the initial buzz from China's plan fades, Hong Kong and Shanghai markets closed up 1.1% and 0.7% respectively, while Japan, South Korea, and Australia dipped 0.2%. India managed a modest gain of 0.2%. The global market remains in a state of cautious anticipation.

Economic highlights of the day:

New home sales and DOE crude inventories are on the agenda.

The dollar is worth EUR 0.8930 and GBP 0.7469. The ounce of gold is up to USD 2,659. Oil is down, with North Sea Brent at USD 73.75 a barrel and US light crude WTI at USD 70.00. The yield on 10-year US debt is at 3.77%. Bitcoin is trading at around USD 63,500.

In corporate news:

  • The U.S. Department of Justice has confirmed the opening of an investigation into alleged anti-competitive practices by Visa.
  • Elliott intends to call a special meeting of Southwest Airlines in the coming weeks.
  • Berkshire Hathaway further reduces its stake in Bank of America to 10.5%.
  • Microsoft to spend $1.3 billion in Mexico on cloud and AI technology.
  • Global Payments CFO forecasts 10% adjusted EPS growth in 2025.
  • Meta's annual Connect developer conference at its California headquarters is about to start, where it is expected to preview its first augmented reality goggles.
  • Uber and WeRide announced on Wednesday a partnership aimed at integrating the Chinese autonomous driving technology company's vehicles into its VTC platform.
  • Amgen said that its experimental drug, rocatinlimab, had met the primary endpoints of a late-stage study against an inflammatory skin disease.
  • Paramount Global began a second phase of layoffs in the U.S., as part of its efforts to increase profitability.
  • KB Home reported a lower-than-expected third-quarter profit.
  • Micron Technology is due to publish its fourth-quarter results after the Wall Street close.

Analyst recommendations:

  • Atmos Energy Corporation: Mizuho Securities upgrades to outperform from buy with a price target raised from USD 138 to USD 148.
  • Baker Hughes Company: Wells Fargo upgrades to overweight from equalweight with a target price raised from USD 40 to USD 42.
  • Doordash, Inc.: KeyBanc Capital Markets upgrades to overweight from sector weight with a target price of USD 177.
  • Global Payments Inc.: Seaport Global downgrades to neutral from buy.
  • Hewlett Packard Enterprise Company: Barclays upgrades to overweight from equalweight with a target price raised from USD 20 to USD 24.
  • Medpace Holdings, Inc.: Jefferies downgrades to hold from buy with a price target reduced from USD 415 to USD 345.
  • Nov Inc.: Wells Fargo downgrades to underweight from equalweight with a price target reduced from USD 20 to USD 16.
  • Ppg Industries, Inc.: Redburn Atlantic resumes coverage with a neutral rating and a reduced target price from USD 160 to USD 150.
  • Smartsheet Inc.: BMO Capital Markets downgrades to market perform from outperform with a target price reduced from USD 59 to USD 56.50. 
  • Tyson Foods, Inc.: Piper Sandler & Co downgrades to underweight from neutral with a price target reduced from USD 57 to USD 50.
  • Applovin Corporation: Macquarie maintains its outperform recommendation and raises the target price from USD 115 to USD 150.
  • Duolingo, Inc.: Evercore ISI maintains its outperform recommendation and raises the target price from USD 270 to USD 335.
  • Intel Corporation: President Capital Management Corp maintains a neutral recommendation with a price target reduced from USD 47 to USD 26.
  • Lennar Corporation: JMP Securities maintains its market outperform recommendation and raises the target price from USD 170 to USD 210.
  • Roku, Inc.: Citigroup remains neutral recommendation with a price target raised from USD 60 to USD 77.
  • Welltower Inc.: BNP Paribas Exane maintains its outperform recommendation and raises the target price from USD 118 to USD 148.
  • Centrica Plc: AlphaValue/Baader Europe downgrades to add from buy with a price target reduced from GBX 152 to GBX 150.