Historically, September has been the least profitable month over the past 120 years, often blamed on post-summer blues. The last four years were particularly grim, with the MSCI World index plummeting: -4.5% in September 2023, -9.5% in September 2022, -4.3% in September 2021, and -3.6% in September 2020. However, with a 1.8% rise on the last trading day of September 2024, it seems we might escape a fifth consecutive year of market misery.

This week promises more crucial economic data, including the ISM manufacturing index and the nonfarm payrolls report, which could sway expectations for another rate cut. A 50 basis-point cut from the Fed in November remains a strong possibility. Powell's speech today is eagerly anticipated, though he might sidestep monetary policy discussions as he did last week. Tuesday brings the JOLTS job openings survey and the ISM manufacturing index. Wednesday features the ADP employment survey, while Thursday is packed with the Challenger survey, weekly jobless claims, and the ISM & PMI services index. The week culminates with the monthly employment figures for September on Friday. In Europe, attention is on the first inflation estimates for September, due Monday in Germany and Tuesday for the eurozone. The vice-presidential candidates' debate on Tuesday could also stir individual sectors and stocks, depending on the rhetoric.

Oil prices climbed, buoyed by China's latest stimulus measures aimed at stabilizing its property market and supply disruption risks in the Middle East. Concerns of a broader conflict in the Middle East intensified after Israel launched airstrikes against Houthi targets in Yemen and Hezbollah targets in Lebanon.

Last week, equity markets managed to recover from a rocky start to the month, though gains were uneven. China led the charge, with the MSCI China index soaring 17% in five sessions. Beijing's aggressive measures to boost growth have finally convinced investors. The rally was sharp, perhaps too sharp, but it underscores the high expectations after three years of market drought in China.

European markets followed suit, with the German DAX and French CAC40 both up 4%. In contrast, the US market remained calm, with the S&P 500 gaining just 0.6% and the Nasdaq 100 up 1.1%.

This morning, Chinese equities continued their impressive recovery. The Shanghai and Shenzhen indexes were buoyed by relaxed property rules and reduced costs for existing property loans. These concrete steps from the central government are starting to pay off, despite weak PMI indicators. The euphoria is likely amplified by Golden Week, a week-long national holiday in China starting tomorrow. However, Japan is the outlier this morning. Tokyo fell over 3% after Shigeru Ishiba won the race for the leadership of the ruling party. Ishiba, a known advocate for rate hikes, is likely to become prime minister. Rate hikes mean a stronger yen, which hurts export competitiveness and, consequently, profits for Japanese companies. Nonetheless, this drop should be viewed in context, as the Nikkei 225 gained almost 6% last week.

On the corporate front, there's little to chew on before the first Q3 results in a fortnight. However, Nike is set to release its first fiscal quarter results for 2024/2025, the first official announcement since its CEO's departure two weeks ago. A glance at the Asia Pacific region shows a 4.8% fall for the Japanese Nikkei 225 this morning, compared to a 7.6% gain for the Shanghai Composite—a staggering 11.7% performance difference in one session. Hong Kong gained 3.9%, and Sydney rose 0.5%, benefiting from its mining sector. However, the Chinese euphoria hasn't spread to South Korea (-2%) and India (-1.4%). European indices are also bearish, with the Stoxx Europe 600 down 1%.

Today's economic highlights:

September inflation in Germany, and the Chicago PMI are on the agenda. 

The dollar is worth EUR 0.8938 and GBP 0.7479. The ounce of gold is up to USD 2,635. Oil is down, with North Sea Brent at USD 71.73 a barrel and US light crude WTI at USD 68.37. The yield on 10-year US debt is at 3.78%. Bitcoin is up to USD 64,060.

In corporate news:

  • China has asked its companies to avoid using Nvidia chips.
  • Wage negotiations at Boeing have broken down without any progress being made to end the strike, according to the union.
  • Apple has decided not to participate in the new round of financing for OpenAI, according to the WSJ.
  • Spotify suffered a major outage in the US on Sunday.
  • Donald Trump reiterates his pledge to block Nippon Steel's proposed purchase of United States Steel.
  • Shares of Ford and General Motors dropped approximately three percent each following an announcement by their European competitor Stellantis revising their annual forecasts on Monday.
  • Verizon has struck a deal worth three point three billion dollars with digital infrastructure firm Vertical Bridge, granting exclusive rights to lease, operate, and manage thousands of its mobile towers.
  • Epic Games, the creator of Fortnite, has declared its intention to sue Google and Samsung, accusing them of collaborating to shield Google's Play Store from competitive threats.
  • At&T has disclosed the sale of its entire seventy percent stake in satellite TV provider DirecTV to private equity firm Tpg for seven point six billion dollars.
  • The International Association of Machinists and Aerospace Workers has announced the suspension of wage talks with Boeing, with no further negotiation dates currently set.
  • The U.S. Food and Drug Administration (FDA) has approved Ge Healthcare's Flyrcado, a new drug for detecting coronary heart disease.

Analyst recommendations:

  • Accenture Plc: TD Cowen upgrades to buy from hold with a price target raised from USD 321 to USD 400.
  • Commerce Bancshares, Inc.: Morgan Stanley downgrades to underweight from equal weight with a price target reduced from USD 66 to USD 64.
  • Equifax Inc.: Baptista Research downgrades to hold from outperform with a price target raised from USD 267.30 to USD 325.
  • Fedex Corporation: Baptista Research upgrades to outperform from hold with a price target reduced from USD 324.20 to USD 309.90.
  • Jpmorgan Chase & Co.: Morgan Stanley downgrades to equal weight from overweight with a price target raised from USD 220 to USD 224.
  • The Interpublic Group Of Companies, Inc.: Baptista Research downgrades to hold from outperform with a price target reduced from USD 35.70 to USD 34.20.
  • Us Bancorp: Morgan Stanley upgrades to overweight from equal weight with a price target raised from USD 54 to USD 57.
  • Westlake Corporation: Barclays upgrades to overweight from equal weight with a price target raised from USD 162 to USD 180.
  • Zions Bancorporation, National Association: Morgan Stanley upgrades to equal weight from underweight with a target price of USD 54.
  • Apa Corporation: Truist Securities maintains its buy recommendation and reduces the target price from USD 46 to USD 34.
  • E.l.f. Beauty, Inc.: Morgan Stanley maintains its equal weight recommendation and reduces the target price from USD 184 to USD 139.
  • Floor & Decor Holdings, Inc.: Piper Sandler & Co maintains a neutral recommendation with a price target raised from USD 95 to USD 119.
  • Marathon Oil Corporation: Truist Securities maintains its buy recommendation and reduces the target price from USD 35 to USD 27.
  • Murphy Oil Corporation: Truist Securities maintains its buy recommendation and reduces the target price from USD 55 to USD 42.
  • Sharkninja, Inc.: JP Morgan maintains its overweight recommendation and raises the target price from USD 97 to USD 128.
  • Vistra Corp.: Wolfe Research maintains its outperform recommendation and raises the target price from USD 112 to USD 138.
  • Stellantis: Intesa Sanpaolo cut the recommendation to hold from buy. PT up 19% to $19.09.
  • Walt Disney: Seaport Global Securities raised the recommendation to buy from neutral. PT up 12% to $108.