Fed minutes signal September rate cut

[Pelican Press 0]

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Fed minutes signal September rate cut

Traders work on the floor of the New York Stock Exchange during morning trading on August 20, 2024 in New York City. 

Michael M. Santiago | Getty Images

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Stocks advanceWall Street

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as

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and

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raised hopes of a rate cut. The

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edged up 0.42% and is within 1% of its all-time record close. The

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advanced 0.57%. Both the indexes notched their ninth positive day of 10. The

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rose 55.52 points. Meanwhile, the yield on the 10-year

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, while

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dropped 1.7% to below $72 a barrel.

Fed rate cut imminent?The Federal Reserve officials at their July meeting

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, indicating that a September reduction was quite probable. “The vast majority” of members “observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting,” the summary of the minutes from the Fed’s last meeting showed. Markets are fully pricing in a September rate cut. Some officials were inclined to start easing at the July meeting rather than waiting until September, citing progress on inflation and the unemployment rate. Separately,

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by 818,000, making a case for rate cuts.

Ford EV shift

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is

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of a next-generation electric pickup truck and canceling plans for a three-row electric SUV, instead prioritizing hybrid models. The move will result in a $400 million charge and up to $1.5 billion in additional expenses. Ford will lower its EV capital expenditure from 40% to 30% as it responds to slower-than-expected EV adoption and profitability challenges.

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Recall

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plans to introduce its

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for Windows users to test in October. Recall captures screenshots of on-screen activity, raising security concerns about potential exposure of personal information to hackers. While the feature will be disabled by default and

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has committed to enhancing security, the company has not provided a timeline for a wider release of Windows featuring Recall.

Asia markets mixedMarkets in the Asia-Pacific region were mixed as investors assessed business activity data from Japan and Australia. Japan’s 

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 advanced 0.42% and Australia’s 

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 rose 0.26%. South Korea’s 

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 inched lower as the Bank of Korea kept interest rates unchanged but 

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. Hong Kong’s 

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 rose 0.4%, while mainland China’s CSI 300 slipped 0.23%.

[PRO] Defensive growthBrian Arcese, a portfolio manager at Foord Asset Management, advises investors to take a defensive stance due to market volatility and high valuations. Here are four “

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” stocks he recommends. 

The bottom line

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‘s decision to

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and shift to hybrid technology probably shouldn’t come as a surprise. Consumers aren’t particularly enamoured by the prospect of paying premium prices for vehicles with limited range, whose

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drastically compared to combustion engine vehicles. 

Amid EV hurdles, the road to net zero emissions by 2050 seems full of potholes. While Ford isn’t alone, OPEC and the International Energy Agency are at odds over when peak oil demand will materialise. The IEA, advisor to rich industrialised nations, brought its

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. OPEC, on the other hand,

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in its long-term forecast.

OPEC projects that demand will rise to 116 million barrels per day by 2045, while the IEA predicts a peak at 105.6 million barrels within the next five years. OPEC Secretary General Haitham Al Ghais criticized the IEA’s report as “

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” warning that it could lead to unprecedented energy market volatility, particularly for consumers.

Amid stretched forecasts and slack EV take-up, it’s probably not surprising that Aramco, the Saudi oil giant, bought a

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, a partnership between France’s Renault and China’s Geely. The ****** venture anticipates that

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will still be powered by combustion engines.

With Horse Powertrains car manufacturers can stop producing their own engines and instead source them from the company. Horse CEO Matias Giannini told the

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, “If you are a car company today and you are focusing 100% on EVs and all of a sudden you realise that in one region your customers want a hybrid vehicle, you could partner with Horse Powertrains.”

Saudi Arabia, however, does not want to miss out on EVs, and is also investing in pure electric ventures, such as

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, which recently received a

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. Additionally, the country is developing its own EV brand,

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, in collaboration with Foxconn.

Ford’s decision to slow its EV expansion was well-received by investors, boosting the stock by 1.6%. As for the broader market, it shook off earlier losses and rose after Fed’s minutes from their July meeting singaled a possible rate cut. 

With the nonfarm payroll data revised sharply lower, LPL Financial chief economist Jeffery Raoch suggests the

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. 

“A deteriorating labor market will allow the Fed to highlight both sides of the dual mandate and investors should expect the Fed to prepare markets for a cut at the September meeting,” ****** said. “A weaker-than-expected job market could pave the way for the Fed to cut by a half percentage point in September.”

— CNBC’s Jeff Cox, Alex Harring, Samantha Subin, Pia Singh, Jordan Novet, Michael Wayland, Melissa Repko, Spencer Kimball, Lim Hui Jie and Weizhen Tan contributed to this report.

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#Fed #minutes #signal #September #rate #cut

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