Aurelia Butler

BofA and J.P.Morgan have reduced their estimate to 25 bps from 50 bps after the blowout U.S. nonfarm payrolls data on Friday pointed to a resilient economy.Goldman Sachs, Barclays, Macquarie and Deutsche Bank reiterated their forecasts of a 25 bps cut each in November and December.Here are the forecasts from major brokerages after the jobs report: Rate cut estimates (in bps) 2024 Nov Dec 2025 Fed Funds Rate at end of 2025 BofA Global Research 25 25 125 3.0%-3.25% (end 2025) Deutsche Bank 25 25 125 3.25%-3.50% Barclays 25 25 75 3.50%-3.75% Macquarie 25 25 100 3.25%-3.50% (through (through June 2025) June 2025) Goldman Sachs 25 25 100 3.25%-3.50% (through (through June 2025) June 2025) J.P.Morgan 25 25 150 3.0% (through (through September 2025) September 2025) UBS Global Wealth 50 100 3.25%-3.50% Management * UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group Here are the forecasts from major brokerages ahead of the jobs data: Rate cut estimates (in bps) 2024 Nov Dec 2025 Fed Funds Rate at end of 2025 BofA Global Research 50 25 125 UBS Global Wealth 50 100 3.25%-3.50% Management Deutsche Bank 25 25 125 3.25%-3.50% Barclays 25 25 75 3.50%-3.75% Morgan Stanley 25 25 100 3.25%-3.50% (through (through June 2025) June 2025) Macquarie 25 25 100 3.25%-3.50% (through (through June 2025) June 2025) Goldman Sachs 25 25 100 3.25%-3.50% (through (through June 2025) June 2025) Citigroup 50 25 J.P.Morgan 50 25 HSBC 25 25 100 3.25%-3.50% (through (through June 2025) June 2025) * UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group More

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1. Futures lowerUS stock futures pointed lower on Monday following a rally in the prior session sparked by a bumper September employment report.By 03:28 ET (07:28 GMT), the Dow futures contract had shed 89 points or 0.2%, S&P 500 futures had fallen by 13 points or 0.2%, and Nasdaq 100 futures had dipped by 46 points or 0.2%.On Friday, the main averages on Wall Street jumped after Labor Department figures showed that the US economy added far more jobs than anticipated last month. The numbers bolstered hopes that the the world’s largest economy was on solid footing heading into the fourth quarter.Although the reading dented projections that the Federal Reserve would roll out another jumbo 50-basis point interest rate reduction at its final meetings this year, it served to boost the idea that the central bank was on course to achieve a so-called “soft landing” — a scenario in which elevated inflation is successfully quelled without a igniting a wider downturn in the economy or jobs market.The 30-stock Dow Jones Industrial Average posted a record closing high, while the tech-heavy Nasdaq Composite added 1.2% and the benchmark S&P 500 grew by 51 points or 0.9%. The increases also helped the major indices eke out a fourth consecutive positive week.2. Data, earnings ahead this weekInvestors will have more economic data to pour over this week, as well as a raft of new quarterly corporate earnings.Thursday’s consumer price index (CPI) data for September is expected to show that price pressures continued to moderate at the end of the third quarter. The data, coming on the heels of Friday’s robust jobs report is likely to shape expectations around the size and pace of Fed rate cuts in the coming months.Producer price inflation data on Friday is also expected to point to tamer inflationary pressures.“CPI for September will be a key data release. If prices rise faster than expected on top of the stronger labor data, chances for the Fed to skip the November meeting will increase,” analysts at UBS said in a recent note.Meanwhile, US third-quarter earnings season is about to kick into gear, in what will be a test for a stock market near record highs and trading at lofty valuations.Major financial firms — including JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and BlackRock  (NYSE:BLK) — are all due to report on Friday.3. Rio Tinto confirms approach to acquire Arcadium LithiumMining giant Rio Tinto (LON:RIO) has made an approach to purchase lithium producer Arcadium Lithium (NYSE:ALTM), the companies announced in separate statements on Monday.Both groups said the approach was “non-binding,” adding that they would divulge more about a potential deal when they had “news to share.”Should it be completed, the agreement would make Rio Tinto one of the world’s biggest producers of lithium, the ultralight metal essential in powering electric vehicle batteries and power storage. Prior to the announcement, media reports had speculated that Rio may pursue a bid following months of slumping lithium prices due in part to oversupply in China and weaker EV demand.No financial details were provided, but Arcadium Lithium has a market capitalization of around $3.3 billion. Shares in the Philadelphia-based firm surged by more than 24% in premarket trading.Reuters previously reported the discussions on Friday, saying that Arcadium could be valued at between $4 billion to $6 billion or higher.4. Activist investor Starboard Value takes stake in Pfizer – WSJActivist investor Starboard Value has taken a stake in Pfizer (NYSE:PFE) worth around $1 billion as part of a bid to overhaul the pharmaceutical company, The Wall Street Journal reported on Sunday.Starboard has approached two former Pfizer executives — ex-CEO Ian Read and ex-CFO Frank D’Amelio — to help in the process, the paper added, citing people familiar with the matter.The report comes as Pfizer’s leadership team is facing growing calls to turn around its recently flagging performance. The drugmaker was a key COVID-19 vaccine manufacturer during the pandemic, but it has struggled to plug a subsequent sales gap as the health crisis has abated. In late-2023, Pfizer issued a revenue warning and a disappointing 2024 outlook, along with a $3.5 billion cost-cutting drive.Shares in Pfizer, which are now trading below pre-pandemic levels, were higher in premarket dealmaking following the report.5. Oil jumpsOil prices jumped on Monday following hefty gains posted in the previous week, as traders eye ongoing tensions in the Middle East.By 03:28 ET, the Brent contract had risen by 0.5% to $78.47 per barrel, while U.S. crude futures (WTI) traded 0.8% higher at $74.94 a barrel.Oil prices last week recorded their biggest weekly gains in over a year on the mounting threat of a region-wide war in the Middle East. Israel has sworn to strike Iran for launching a barrage of missiles at the country in retaliation for the assassination of the leader of Tehran-backed Hezbollah. More

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(Reuters) – Republican U.S. presidential candidate Donald Trump on Sunday said he would slap tariffs as high as 200% on vehicles imported from Mexico as he ratchets up his protectionist trade rhetoric ahead of the Nov. 5 election.Trump, facing Democrat Kamala Harris in a tight race, has previously pledged that if elected again as president he would set a 100% duty on imported cars and trucks with the goal of aiding the domestic auto industry. But while speaking at a rally at an airport in Juneau, Wisconsin, Trump doubled the figure. “We’ll put a tariff of 200% on if we have to,” Trump said. “We’re not going to let it happen. We’re not letting those cars come into the United States.”The former president stumped in Wisconsin for the fourth time in eight days, underscoring the importance his campaign is placing on the state with less than a month to go until Election Day.Opinion polls have shown Harris, the U.S. vice president, with a slight edge in Wisconsin after the state voted for President Joe Biden over Trump four years ago. Both Harris and Trump have expended a massive amount of time, money and resources in Michigan, Pennsylvania and Wisconsin, which are considered keys to victory in the U.S. electoral college. Trump swept the states in 2016 against Democrat Hillary Clinton on his way to becoming president. Biden did the same in 2020. Harris campaigned with former Republican U.S. congresswoman Liz Cheney in Wisconsin on Thursday. Trump’s rally in Juneau came less than 24 hours after he staged a rally in Butler, Pennsylvania, the site of an assassination attempt against him in July. Trump made his remarks on tariffs as he pledged to bolster the U.S. auto industry. Experts have said his plans could increase vehicle prices. Mexico exported about 3 million vehicles to the United States in 2023, with the Detroit Three automakers accounting for about half of those exports. The Tax Policy Center think tank has said that a massive new tariff on Mexican vehicle exports “likely would drive up the cost of motor vehicles, domestic as well as imports, used cars as well as new.” Trump previously threatened large tariffs on cars from Mexico as president and as a candidate in 2016. Imposing up to 25% tariffs on Mexican autos and components could have severe impacts on the industry and hike vehicle costs, automakers said in 2019.Trump spent much of the early part of his nearly two-hour speech in Juneau bashing the Biden administration’s response to Hurricane Helene, which devastated parts of the Southeast and left 227 people dead and hundreds of thousands without power.Harris had left people “stranded,” Trump said, without providing evidence. “This is the worst response to a storm or a catastrophe or a hurricane that we’ve ever seen,” Trump told the crowd in Juneau.Earlier on Sunday, Deanne Criswell, the administrator of the Federal Emergency Management Agency, on ABC’s “This Week” program defended the administration’s actions, saying that the agency has enough resources to aid in recovery efforts.”We continue to move in critical commodities into the places that have been hard to reach,” Criswell said.Criswell called claims by Trump and other Republicans that FEMA funding was being diverted to migrants in the country illegally “frankly ridiculous and just plain false.” More

The data, coming on the heels of Friday’s robust jobs report, is likely to shape expectations around the size and pace of Federal Reserve interest rate cuts in the coming months.Producer price data on Friday is also expected to point to tamer inflation.In a note to clients, analysts at UBS said they do not expect the inflation print will stand in the way of additional Fed borrowing cost reductions this year following a jumbo 50-basis point drawdown by the central bank last month.”With inflation slowing, we expect 50 basis points of Fed easing in the last two meetings of 2024, and a further 100 basis points of cuts in 2025,” the analysts wrote.They flagged that the pace of these cuts could change if a recent waning in inflation stalls or the labor market remains resilient, although they noted this was “not our base case.”Bets for another super-sized cut were all but eradicated following last week’s bumper US employment report. According to the CME Group’s (NASDAQ:CME) FedWatch Tool, there is now a 94.5% probability the Fed will slash rates by a more traditional quarter percentage point, and a 5.5% chance policymakers will choose to leave borrowing costs unchanged at its current range of 4.75% to 5.00%.The US economy added 254,000 jobs last month, increasing from an upwardly-revised mark of 159,000 in August, according to a closely-watched Labor Department report. Economists had anticipated a reading of 147,000.Meanwhile, the unemployment rate decelerated to 4.1%. Forecasts had seen the figure matching August’s pace of 4.2%.Average hourly wages rose by 0.4% on a monthly basis, faster than predictions of 0.3% but slightly slower than an upwardly-adjusted August mark of 0.5%.The 30-stock Dow Jones Industrial Average posted a record closing high on Friday, while the tech-heavy Nasdaq Composite added 1.2% and the benchmark S&P 500 grew by 51 points or 0.9%. The increases helped the major indices eke out a fourth consecutive positive week despite looming concerns over the impact of an escalating conflict in the Middle East.”[O]ur view remains that the rally in the equity market remains well supported,” the UBS analysts said. More