Pre-market market trends

1. Pre-market trading on September 3 (Tuesday), the three major US stock index futures all fell. As of the time of writing, the Dow futures fell by 0.48%, S&P 500 index futures fell by 0.46%, and Nasdaq futures fell by 0.60%.

2. As of the time of writing, the deguodaxzhishu fell by 0.27%, the UK FTSE100 index fell by 0.46%, the France CAC40 index fell by 0.21%, the European Stoxx50 index fell by 0.40%.

3. As of the time of writing, WTI crude oil fell by 1.54%, to $72.42 per barrel. Brent crude oil fell by 2.24%, to $75.78 per barrel.

Market News

Traders in North America continue to bet on the US dollar as they return from the holiday, with the US dollar index rising for the fifth consecutive day. The strength of the US dollar against a basket of sovereign currencies, as measured by the US dollar index, has rebounded for five consecutive trading days. Traders in the North American financial markets returned from the Labor Day holiday to welcome the economic data for the new week, and are placing their bets on the potential continuation of the recent rebound in the US dollar driven by this economic data. As of the time of writing, the US dollar index rose by 0.16%, to 101.81. Market strategists at Malayan Banking Bhd, led by Saktiandi Supaat, stated: "If US manufacturing data unexpectedly rise, and stimulate substantial repricing for the Fed rate cut outlook, traders may still have a potential bullish outlook on the US dollar exchange rate."

Former US Treasury Secretary: The Fed may ultimately not make a substantial rate cut. Former US Treasury Secretary, Summers, stated that the Fed's monetary policy has not been as tight as investors may think, making the market more susceptible to entering bubble territories. Summers stated that the US economy remains strong, with good employment and resilient economic growth. However, he added that the strong US economy may actually be bad news for US stocks, as it indicates that the Fed's monetary policy is not as tight as the market believes. Summers estimated that the neutral interest rate level, neither inhibiting nor stimulating economic growth, has increased from approximately 2.5% to around 4%. He also warned that the Fed may ultimately not make as significant of a rate cut as the market currently expects, with the likelihood of the Fed not cutting rates in 2024 increasing slightly to over 15%, which is bearish for US stocks. Summers stated: "We are at least on the edge of a bubble, and I don't think the financial markets are showing clear signs of a bubble, as at other times. But that doesn't mean we are far from such a situation."

Are there already policy mistakes? Analysts urge the Federal Reserve not to 'sleepwalk' and cut interest rates as soon as possible. Kenneth Akintewe, Head of Sovereign Debt for Asia at Aberdeen Asset Management, a UK investment company, said there is a long-term risk of a slowdown in the US economy by 2025. He mentioned economic data such as non-farm payrolls and stated that these data were later revised to reflect a weak economic situation. Akintewe said, 'Is the economy already weaker than what the overall data shows? Has the Federal Reserve already should relax its monetary policy?' He added that changes in the Federal Reserve's policy take time to take effect in the economy, 'So, if the economy is weaker than what the overall data shows, they will need to accumulate enough loose policy, you know, 150 to 200 basis points, which will take time.' 'Once you have taken so much loose policy, it will take at least six to eight months to see the results.'

Goldman Sachs continues to strongly call for an increase in gold prices: it will soon rise to $2700! Goldman Sachs believes that gold is seen as the preferred tool for hedging risks, and the potential for gold to rise recently is the greatest. At the same time, weak Asian demand has made the bank view other commodities as 'more cautious and less optimistic'. Goldman Sachs analysts said, 'The upcoming interest rate cut by the Federal Reserve will encourage Western capital to flow back into the gold market, which is an important factor that was missing in the significant rise in gold prices in the past two years.' Goldman Sachs has adjusted its gold price target to $2700 by early 2025. In addition, for crude oil, Goldman Sachs has a more cautious attitude and expects that the oil deficit in the summer of this year will shrink, while the oversupply in 2025 will be slightly higher than expected.

Individual stock news

Tesla's sales in China reached its highest performance this year in August, with a month-on-month growth of 37%. In August of this year, benefiting from the strong sales in small cities, Tesla achieved its best monthly sales in China so far this year. Tesla stated that it sold over 0.063 million cars in the Chinese market last month, a significant increase of 37% compared to July. Although this is an encouraging progress, Tesla's performance is far behind its strong Chinese competitors. Like many other automakers, Tesla has to face a long-lasting price war in China. In the first half of this year, the company's sales in China declined by 5%.

With aggressive shareholder Elliott's stake exceeding the key threshold, is a management reform imminent for Southwest Airlines (LUV.US)? According to sources, Elliott Investment Management, an activist investor, currently holds 10% of Southwest Airlines' common shares, surpassing the threshold for the hedge fund to call a special meeting. It is reported that Elliott is seeking to remove CEO Robert Jordan and Chairman Gary Kelly, and plans to nominate 10 directors to join the airline's 15-member board of directors. The company has signaled to other shareholders that it is prepared to take the next steps, including holding a special meeting, unless the company is willing to discuss changes in its leadership. As of the time of writing, Southwest Airlines rose more than 2% in pre-market trading on Tuesday.

Gold quantity and price both increase! Harmony Gold Mining (HMY.US) releases 'explosive' performance forecast: profits are expected to increase by 78%. Harmony Gold, a globally renowned gold mining and exploration company, stated that with the continuous increase in the price of gold and the increasing gold production, the profit scale (i.e. earnings per share) in the previous fiscal year is expected to increase significantly by 78% year-on-year. The company expects earnings per share for the 12-month period ending in June to reach 13.88 rand (approximately $0.78), far higher than the 7.80 rand from the previous fiscal year. The company will officially release its financial report on September 5th.

The $14 billion acquisition of United States Steel (X.US) by Nippon Steel faces new obstacles as two presidential candidates express opposition. US presidential candidate Harris explicitly stated on Monday that she 'always supports the position of American steelworkers' and emphasized that United States Steel should be owned and operated by Americans. In addition, Republican presidential candidate Trump stated last month that once he takes office, he will veto Nippon Steel's acquisition of United States Steel. It is reported that Nippon Steel's bid for the acquisition of United States Steel is $14 billion, corresponding to $55 per share. As of the time of writing, United States Steel fell nearly 6% in pre-market trading on Tuesday, trading at $35.72.

Important economic data and events notice

At 21:45 Beijing time, the final value of the SPGI Manufacturing PMI for August in the United States.

At 22:00 Beijing time, the ISM Manufacturing PMI for August in the United States.