ADDX GO Market Morning Wrap - 17th Sep

Stock Market  

On Tuesday Eastern Time, the three major US stock indices closed lower amid choppy trading as investors remained cautious ahead of the Federal Reserve’s interest rate decision.  

 

Large tech stocks showed mixed results, with Tesla rising nearly 3%, Oracle up over 1%, and Microsoft and Nvidia each falling more than 1%.  

 

Investors currently widely expect the Federal Reserve to announce a 25-basis-point rate cut on Wednesday to counter the ongoing deterioration in the US labor market, a trend reflected in recent economic data.  

 

The focus is on the Fed’s forecast for the full-year interest rate path and whether policymakers anticipate one or two additional cuts before the end of 2025.  

 

Data released earlier Tuesday showed US retail sales for August exceeded expectations, indicating robust consumer spending, but this did little to alter market expectations for a rate cut.  

 

Ross Mayfield, Investment Strategist at Baird Private Wealth Management, said, “Any resilient economic data will only strengthen the hawkish stance within the Federal Open Market Committee (FOMC)… and could lead Fed Chair Powell to adopt a more hawkish tone than the market hopes for.”  

 

Investors reacted tepidly to other news, including the US Senate’s confirmation of White House economic advisor Stephen Milan as a Federal Reserve governor and an appeals court’s rejection of Trump’s request to remove Fed Governor Lisa Cook.  

 

Seema Shah, Global Chief Strategist at Principal Asset Management, believes, “Although labor demand is slowing, the current recession risk remains limited. A 50-basis-point cut at this stage would seem more like a response to political pressure than economic necessity.

 

A moderate 25-basis-point cut, however, is a more appropriate choice, allowing the Fed to stay ahead of economic slowdown without overreacting to early pressure signs.”  

 

Bank of America’s latest monthly survey shows that as concerns about tariff-induced recessions fade, global fund managers’ bullish sentiment on stocks has reached its highest level since February this year.  

Global Hotspots  

US President Trump Arrives in UK for State Visit  

 

The plane carrying US President Trump landed in the UK on the 16th local time. Accompanied by his wife Melania, Trump began a state visit—his second to the UK in two months following his July trip.

 

The itinerary includes a welcome at Windsor Castle, a royal carriage procession, a guard of honor review, a performance by the Royal Air Force Red Arrows, and a grand state banquet. Bilateral talks and trade agreements are also central to the agenda.  

 

Israeli Military Intensifies Ground Offensive, PM Says Nearly 400,000 Have Left Gaza City  

 

As Israel launched a large-scale ground offensive in the Gaza Strip, Prime Minister Netanyahu on the 16th called for accelerating the evacuation of Palestinians from Gaza City, stating it would “help ensure a swift end to the war.” He noted that local residents are evacuating, with nearly 400,000 having left so far.  

 

US Treasury Secretary Bessent: Trump’s Push to End Quarterly Reports Benefits Investors  

 

On Tuesday local time, US Treasury Secretary Scott Bessent said President Trump’s proposal to shift corporate reporting from quarterly to semi-annual is “a major boon for investors.” Bessent claimed, “President Trump recognizes that our publicly traded markets, whether in the UK or the US, are shrinking, and this might be a way to reduce costs for listed companies without harming investor interests, revitalizing them.”  

 

EU Commission to Propose Sanctions on Israel  

 

EU High Representative for Foreign Affairs and Security Policy Josep Borrell posted on social media on the 16th, stating that Israel’s ground offensive in Gaza will worsen an already dire situation.

 

The EU Commission will propose measures on the 17th to pressure the Israeli government to change its stance on the Gaza war, including suspending trade preferences, sanctioning extremist ministers, and targeting violent settlers, signaling the EU’s demand to end the conflict.  

 

Coffee Futures Near Record Highs as Speculators Bet on Brazil Supply Risks  

 

Coffee futures hover near historic highs as market speculators bet that tariffs and drought will reduce supply from Brazil, the largest producer. On Tuesday in the New York market, the most active Arabica coffee contract hit $4.24 per pound, just below the $4.2995 all-time high set in February.

 

Futures prices have risen about 50% since early August, driven by concerns that Brazil’s supply won’t fully replenish shrinking inventories.  

 

Swiss Authorities Raid Metal Trader’s Office Over Alleged Russia Sanctions Breach  

 

According to insiders, Swiss authorities conducted a surprise raid last Thursday on the local office of metal trader Open Mineral AG as part of an investigation into potential violations of sanctions related to Russian gold trading. The Swiss State Secretariat for Economic Affairs (SECO), along with local police, searched the company’s office in Zug.  

Corporate News  

Eli Lilly Invests $5 Billion to Build Factory in US, Boosting Targeted Cancer Drugs and Other Therapies  

 

On Tuesday Eastern Time, US pharmaceutical giant Eli Lilly announced a $5 billion investment to build a production facility in Goochland County, Virginia, to enhance the manufacturing of active pharmaceutical ingredients and finished doses for targeted cancer drugs and advanced therapies.

 

Eli Lilly’s stock rose over 2.2% at close. The company stated the new factory will produce active ingredients for cancer and autoimmune disease treatments, as well as other innovative therapies.

 

Eli Lilly emphasized that the facility will significantly boost domestic capacity for antibody-drug conjugates (ADCs). The Virginia plant will leverage advanced technologies, including machine learning and AI, to achieve a “first-time-right” production process, ensuring safe and reliable drug supply.  $LLY 

 

Google Leads AI Agent Payment Protocol to Unlock New Business Models in AI Era  

 

Google announced on Tuesday the launch of the Agent Payments Protocol (AP2), an open protocol co-developed with over 60 organizations, to securely initiate and process AI-agent-driven payments across platforms.

 

The protocol targets a new AI-driven business model where AI agents routinely shop on behalf of customers, engaging in complex real-time interactions with retailers’ AI agents. Partners from various sectors participated, including American Express, PayPal, JCB, Shopee, UnionPay International, Alibaba, Ant International, and Trip.com.  $GOOGL $GOOG 

 

Novo Nordisk: Next-Gen Weight-Loss Drug Cagrilintide Shows Positive Phase III Results  

 

Danish pharmaceutical giant Novo Nordisk reported promising results for its new weight-loss drug Cagrilintide in a late-stage clinical trial. According to Novo Nordisk, an early analysis of a Phase III trial showed that weekly Cagrilintide injections led to an average weight loss of 11.8% after 68 weeks, compared to 2.3% for the placebo group.

 

Unlike existing GLP-1 drugs (e.g., Novo Nordisk’s semaglutide and Eli Lilly’s tirzepatide), Cagrilintide is a long-acting amylin analog that mimics a hormone co-secreted with insulin in the pancreas to increase satiety.  $NVOH

 

Microsoft to Invest Over $30 Billion in UK Over Next Four Years  

 

Microsoft President Brad Smith said the company will invest over $30 billion in the UK over the next four years. Building on the $3.2 billion announced in 2023 for UK data centers, Microsoft plans an additional $15.5 billion in capital expansion and $15.1 billion in business investments, including an AI lab in London, gaming, and other initiatives.  $MSFT 

Forex & Commodities  

WTI October crude futures closed up 1.93% at $64.52 per barrel; Brent November crude futures rose 1.53% to $68.47 per barrel.  

 

COMEX gold futures gained 0.23% to $3,727.5 per ounce; COMEX silver futures fell 0.19% to $42.88 per ounce.  

 

The US Dollar Index, measuring the dollar against six major currencies, dropped 0.68% to close at 96.639 in late forex trading.  

Key Events  

OPEC+ to Discuss Maximum Capacity Assessment Amid Low Oil Prices  

 

According to insiders, OPEC+ representatives plan to meet in Vienna on Thursday and Friday to discuss methods for assessing the alliance’s maximum capacity. OPEC+, comprising the Organization of the Petroleum Exporting Countries (OPEC) and Russia-led nations, accounts for nearly half of global crude oil production.  

Cryptocurrency  

Bitcoin rose 1.18% in 24 hours to $116,771.  

 

Ethereum (ETH-USD) fell 0.48% to $4,504.  

 

XRP (XRP-USD) rose 1.46%, BNB (BNB-USD) gained 3.94%, and Solana (SOL-USD) increased 1.30%.  

 

Dogecoin (DOGE-USD) rose 0.46%, and Cardano (ADA-USD) gained 2.06%.  

Key Events  

Tom Lee: Fed Rate Cut Could Spark Bitcoin and Ethereum Surge Over Next 3 Months  

 

BitMine Chairman Tom Lee told CNBC that if the Fed cuts rates, the biggest beneficiaries will be: the Nasdaq 100 index (Mag 7 + AI sector); Bitcoin and Ethereum, which “could see significant gains over the next three months”; and small-cap and financial stocks.