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  • European Stocks Futures Gain Before US Jobs Data: Markets Wrap

    European Stocks Futures Gain Before US Jobs Data: Markets Wrap

    (Bloomberg) — European and US stock futures gained in line with Asian equities ahead of US jobs data that will identify the path ahead for interest rates. An oil price rally eased after Middle East tensions led to the biggest one-day jump in almost a year.

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    Euro Stoxx 50 futures rose 0.2%, and contracts on the S&P 500 advanced 0.1%. Equities in Japan and South Korea rose while markets in mainland China were shut for a holiday. A gauge of Chinese shares in Hong Kong advanced as traders assessed its recent rally’s sustainability and await details of fiscal stimulus and holiday spending.

    An index of dollar declined marginally, but is still poised for the biggest weekly gain in nearly six months as traders pared back expectations for aggressive US rate cuts. Treasuries were flat after selling off on Thursday, increasing yields to levels not seen since September.

    West Texas Intermediate and Brent crude eased slightly after each rose more than 5% to a one-month high on Thursday. Earlier gains came after puzzling comments from President Joe Biden, who told reporters the US was discussing whether to support potential Israeli strikes against Iranian oil facilities.

    Investors are concerned that, should Israel strike critical Iranian assets, the Islamic Republic will lash out and escalate the conflict, dragging in more countries and potentially disrupting global energy shipments. Israel said it bombed more than a dozen Hezbollah targets in Beirut on Thursday.

    “The market fear is that there could be supply disruptions coming out of Iran,” said Tai Hui, chief Asia market strategist for JPMorgan Asset Management, on Bloomberg Television. “Demand for oil should remain healthy, but at the same time the risk to the supply side is very much there.”

    The initial buying frenzy in Chinese stocks after Beijing’s stimulus is waning as traders take profit and await policy details and holiday spending data for further confidence. Invesco Ltd.’s chief investment officer for Hong Kong and China, Raymond Ma, who predicted double-digit returns in Chinese equities this year, said there are signs the surge has gone too far for some stocks. Still, strategists at HSBC Holdings Plc and BlackRock Inc. are among Wall Street heavyweights turning bullish on the once beaten-down market.

    The yen strengthened 0.6% against the dollar, paring some of its recent losses from earlier this week after Japanese Prime Minister Shigeru Ishiba had said the nation isn’t ready for another interest-rate increase.

    Amid all the geopolitical uncertainty, investors are looking for further signals on the health of the US economy, with the monthly payrolls report due on Friday. The unemployment rate is forecast to hold steady at 4.2% in September while payrolls are expected to rise by 150,000.

    “If the unemployment rate ticks up, I wouldn’t be surprised that markets would shift back toward expecting 50 basis points and then it is a question of how the Fed may react,” Kallum Pickering, chief economist at Peel Hunt, said on Bloomberg Television.

    Other economic signs showed robustness in the US economy. The Institute for Supply Management’s index of services posted its best reading since February 2023, ahead of Wall Street estimates. Applications for US unemployment benefits rose slightly last week to a level that is consistent with a limited number of layoffs. Continuing claims, a proxy for the number of people receiving benefits, were little changed from the previous week.

    “The US dollar could stay supported on safe haven demand amid Middle East risks, and more so if US payrolls surprise on the upside,” Wei Liang Chang, a foreign-exchange and credit strategist at DBS Bank Ltd., wrote in a research note. “The yen may be a beneficiary too, as geopolitical risks restrain appetite for carry trades”

    Key events this week:

    Some of the main moves in markets:

    Stocks

    • S&P 500 futures were little changed as of 6:34 a.m. London time

    • Nikkei 225 futures (OSE) were little changed

    • Japan’s Topix rose 0.3%

    • Australia’s S&P/ASX 200 fell 0.7%

    • Hong Kong’s Hang Seng rose 2.2%

    • Euro Stoxx 50 futures rose 0.2%

    • Nasdaq 100 futures rose 0.1%

    Currencies

    • The Bloomberg Dollar Spot Index was little changed

    • The euro was little changed at $1.1030

    • The Japanese yen rose 0.6% to 146.11 per dollar

    • The offshore yuan fell 0.2% to 7.0571 per dollar

    • The Australian dollar was little changed at $0.6846

    • The British pound was little changed at $1.3134

    Cryptocurrencies

    • Bitcoin rose 0.6% to $61,156.99

    • Ether rose 1.5% to $2,376.85

    Bonds

    Commodities

    • West Texas Intermediate crude fell 0.1% to $73.62 a barrel

    • Spot gold rose 0.4% to $2,666.99 an ounce

    This story was produced with the assistance of Bloomberg Automation.

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    ©2024 Bloomberg L.P.

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  • Japan Stocks Poised for Rebound; US Futures Rise: Markets Wrap

    Japan Stocks Poised for Rebound; US Futures Rise: Markets Wrap

    (Bloomberg) — Japan equities are set to regain some ground after suffering the biggest hit in Monday’s global rout, which wiped out billions across markets from New York to London. US equity futures climbed in early trading.

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    Futures show the Nikkei 225 gaining more than 6% when it reopens Tuesday, following a 12% slump that was the worst one-day decline in yen terms. Hong Kong and Sydney shares look more steady, suggesting traders may be ready to catch their breath following a dramatic day in which Wall Street’s “fear gauge” – the VIX – at one point registered its largest spike in data going back to 1990.

    While the S&P 500 pared some of its losses to finish 3% lower Monday, it still suffered the biggest plunge in about two years amid strong trading volume. The tech-heavy Nasdaq 100 saw its worst start to a month since 2008. Still, futures show both those indices may gain when US trading begins later Tuesday.

    Speculation about a looming US recession — mostly seen as premature — wiped out a celebratory mood driven by recent signals from the Federal Reserve about the timing of its first rate cut. The repricing was so sharp that the swap market earlier assigned a 60% chance of an emergency rate reduction by the Fed over the coming week. Those odds subsequently ebbed.

    “The economy is not in crisis, at least not yet,” said Callie Cox at Ritholtz Wealth Management. “But it’s fair to say we’re in the danger zone. The Fed is in danger of losing the plot here if they don’t better acknowledge cracks in the job market. Nothing is broken yet, but it’s breaking and the Fed risks slipping behind the curve.”

    Treasuries lost some steam after a surge that briefly drove two-year yields — which are sensitive to monetary policy — below those on 10-year bonds. US 10-year yields were little changed at 3.78%. The dollar fell. A gauge of perceived risk in the US corporate credit markets soared, with the turmoil effectively shutting down bond sales on what had been expected to be among the busiest days of the year. Bitcoin sank about 10%.

    In Asia, the wave of selling that hit a fever pitch in Japan may subside. On Monday, investors rushed to unwind popular carry trades, powering a 2% jump in the yen and causing the Topix stock index to shed 12% and close the day with the biggest three-day drop in data stretching back to 1959. The rout wiped out $15 billion of SoftBank Group Corp.’s value on Monday.

    The Bank of Japan’s monetary policy tightening last week has triggered a wave of criticism after it helped set off a historic plunge in Japanese stocks and contributed to global market turmoil — likely putting any plans for further interest-rate hikes on ice.

    The US stock plunge is vindicating some prominent bears, who are doubling down with warnings about risks from an economic slowdown. JPMorgan Chase & Co.’s Mislav Matejka said equities are set to stay under pressure from weaker business activity, a drop in bond yields and a deteriorating earnings outlook. Morgan Stanley’s Michael Wilson warned of “unfavorable” risk-reward.

    “This doesn’t look like a ‘recovery’ backdrop that was hoped for,” Matejka wrote. “We stay cautious on equities, expecting the phase of ‘bad is bad’ to arrive,” he added.

    Market veteran Ed Yardeni said that the current equity selloff bears some similarity to the 1987 crash, when the economy averted a downturn despite investor fears at the time.

    “This is very reminiscent, so far, of 1987,” Yardeni said on Bloomberg Television. “We had a crash in the stock market — that basically all occurred in one day — and the implication was that we were in, or about to fall into, recession. And that didn’t happen at all. It had really more to do with the internals of the market.”

    After a very strong first half, the market had become extended on a short-term basis and the bar for positive surprises too high — and a little bit of bad news has gone a long way, according to Keith Lerner at Truist Advisory Services.

    “From a stock market perspective, our base case has not changed,” Lerner said. “Our work still suggests the bull market deserves the benefit of the doubt. However, we have been expecting a choppier environment into the back half of July and August given the sharp rebound from April, stretched sentiment, and the fact that we’re entering a seasonally weaker period of the calendar year.”

    Moreover, after strong first halves, historically we have seen a typical pullback of 9% at some point, even while markets still tended to end higher by the end of the year.

    Notably, over the past 40 years, the S&P 500 has averaged a maximum intra-year pullback of 14%. Despite this, stocks have still shown an average return (not compounded) of 13% and risen in 33 out of 40 of those years, or 83% of the time, Lerner said.

    “While always uncomfortable and typically accompanied by bad news, pullbacks are the admission price to the stock market,” Lerner said. “This is what provides the potential for higher longer-term returns relative to most other asset classes.”

    Investors should hedge their risk exposure even if they own high quality assets as US stocks extend losses, according to Goldman Sachs Group Inc.’s Tony Pasquariello.

    “There are times to go for the gas, and there are times to go for the brake — I’m inclined to ratchet down exposures and roll strikes,” Pasquariello wrote. He added that it’s difficult to think that August will be one of those months where investors should carry a significant portfolio risk.

    To Michael Gapen at Bank of America Corp., markets are getting ahead of the Fed again.

    “Incoming data have raised concerns that the US economy has hit an ‘air pocket.’ A rate cut in September is now a virtual lock, but we do not think the economy needs aggressive, recession-sized cuts.”

    As the selloff in global stocks intensified Monday, JPMorgan Chase & Co.’s trading desk said the rotation out of the technology sector might be “mostly done” and the market is “getting close” to a tactical opportunity to buy the dip.

    Elsewhere in the Asian region, Australia’s central bank on Tuesday is expected to hold its cash rate at 4.35% for a sixth straight meeting, economists predict. The nation is poised to stay near the back of the global easing cycle as local inflation — while cooling — remains elevated requiring the Reserve Bank to keep its key interest rate at a 12-year high.

    Oil rose from a seven-month low early Tuesday as the halting of production from Libya’s biggest field refocused attention on the Middle East.

    Corporate Highlights:

    • Palantir Technologies Inc. raised its annual outlook, citing continuing demand for its artificial-intelligence software.

    • A federal judge on Monday ruled that Google has illegally monopolized the search market, hading the government an epic win in its first major antitrust case against a tech giant in more than two decades.

    • Nvidia Corp.’s upcoming artificial intelligence chips will be delayed due to design flaws, The Information reported, citing two unidentified people who help produce the chip and its server hardware.

    • Dell Technologies Inc. is cutting jobs as part of a reorganization of its sales teams that includes a new group focused on artificial intelligence products and services.

    • Tyson Foods Inc. shares surged, bucking a broad retreat in equity markets, as quarterly earnings beat the highest of analyst estimates on a rebound in chicken profits.

    Key events this week:

    • Australia rate decision, Tuesday

    • Eurozone retail sales, Tuesday

    • China trade, forex reserves, Wednesday

    • US consumer credit, Wednesday

    • Germany industrial production, Thursday

    • US initial jobless claims, Thursday

    • Fed’s Thomas Barkin speaks, Thursday

    • China PPI, CPI, Friday

    Some of the main moves in markets:

    Stocks

    • S&P 500 futures rose 0.9% at 8:08 a.m. in Tokyo; the S&P 500 fell 3%

    • Nikkei 225 futures rose 6.3%

    • Hang Seng futures rose 0.2%

    • S&P/ASX 200 futures fell 0.4%

    Currencies

    • The Bloomberg Dollar Spot Index was little changed

    • The euro was little changed against the dollar

    • The Japanese yen fell 0.7% to 145.23 per dollar

    Cryptocurrencies

    • Bitcoin rose 0.8% to $54,831.63

    • Ether rose 0.9% to $2,461.61

    Bonds

    Commodities

    This story was produced with the assistance of Bloomberg Automation.

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    ©2024 Bloomberg L.P.

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  • S&P 500 Has Its Worst Jobs Day Since October 2022: Markets Wrap

    S&P 500 Has Its Worst Jobs Day Since October 2022: Markets Wrap

    (Bloomberg) — The selloff in stocks intensified and bond yields tumbled as a weak jobs report fueled worries that the Federal Reserve’s decision to hold rates at a two-decade high is risking a deeper economic slowdown.

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    Those fears roiled trading around the globe, spurring a massive surge in volatility and a flight away from the riskier corners of the market. The S&P 500 saw its worst reaction to jobs data in almost two years. A plunge in key technology companies sent the Nasdaq 100 down over 10% from its peak, passing the threshold that meets the definition of a correction. A rally in Treasuries extended into a seventh straight day, with traders projecting the Fed will cut rates by more than a full percentage point in 2024.

    The rout in equities follows a torrid advance partly driven by bets on a “soft economic landing” that would keep driving Corporate America. While the Fed has been able to successfully bring down inflation, the latest jobs figures may give officials some reason to believe their policies are cooling the labor market too much.

    “Bad news is no longer good news for stocks,” said John Lynch at Comerica Wealth Management. “Of course, we’re in a period of seasonal weakness, but sentiment is fragile given economic, political, and geopolitical developments. Pressure will escalate on the Federal Reserve.”

    Wall Street giants like Citigroup Inc. and JPMorgan Chase & Co. are now calling for more aggressive Fed action. Speaking on Bloomberg Television, Chicago Fed President Austan Goolsbee said officials won’t overreact to any one piece of data, echoing comments by Jerome Powell on Wednesday.

    “The Fed almost always waits too long to cut rates,” said Matt Maley at Miller Tabak + Co. “Then, as investors come to realize that the rate cuts are coming more due to a slowdown in growth — rather than a drop in inflation — the situation on the stock market tends to get ugly.”

    The S&P 500 slid 1.8%. The Nasdaq 100 sank 2.4%. The Russell 2000 tumbled 3.5%. Wall Street’s “fear gauge” — the VIX — hit the highest since March 2023. Intel Corp. plunged 26% on a grim growth forecast. Treasury 10-year yields slipped 18 basis points to 3.8%. The dollar fell 0.7%.

    “Oh dear, has the Fed made a policy mistake?” said Seema Shah at Principal Asset Management. “The labor market’s slowdown is now materializing with more clarity. A September rate cut is in the bag and the Fed will be hoping that they haven’t, once again, been too slow to act.”

    To Scott Wren at Wells Fargo Investment Institute, markets have turned attention from “when and how much will the Fed ease” to a mindset of “growth looks like it is plunging and the Fed is behind the curve.”

    “After the big equity run higher, investors are taking money off the table and booking profits,” Wren said. “Expect the near-term volatility to continue.”

    Nonfarm payrolls rose by 114,000 — one of the weakest prints since the pandemic — and job growth was revised lower in the prior two months. The unemployment rate unexpectedly climbed for a fourth month to 4.3%, triggering a closely watched recession indicator.

    How much should investors worry about a slowdown?

    “This marks an official ‘growth scare’ and one that the Fed will have to pay close attention to,” said George Mateyo at Key Wealth. “To be true, the economy is still expanding and jobs are still being added, so calls that a recession is upon us are overstated in our view. But the economic environment is changing quickly and the Fed should be attentive to downside risks.”

    “The big question is: are we sliding right into a recession? Or is the economy simply hitting a rough spot?” said Ryan Detrick at Carson Group. “We’d side with we will still avoid a recession — but the risks are rising.”

    At Evercore, Krishna Guha says he doesn’t think the evidence overall suggests the labor market is “cracking” — but it is clearly softening and may weaken further — so there is “ample cause for the Fed to pull forward cuts.”

    To Lara Castleton at Janus Henderson Investors, the “soft landing narrative” is now shifting to “worries about a hard landing.” While fears of a policy mistake are rising, she thinks one negative miss shouldn’t lead to overreaction given that other data points that still show economic resilience.

    “Equities selling off should be seen as a normal reaction, especially considering the high valuations in many pockets of the market,” she said. “It’s a good reminder for investors to focus on the earnings of companies going forward.”

    With just three meetings left, swap pricing reflects the growing perception that the Fed will need to make an unusually large half-point move at one of the gatherings or act between its scheduled meetings — moving rapidly to bolster growth.

    Still, large policy moves with an aggressive response could imply an emergency, triggering even more jitters among traders.

    To Chris Low at FHN Financial, the market is “probably right” to think the Fed should cut by 50 basis points, but psychology is as important as data at turning points.

    “FOMC participants are more likely to take it slowly with a quarter-point cut at first, if for no other reason than to project calm and control,” he said.

    “From a Fed perspective, this does not translate into making hasty policy decisions, but it should help them remove the rose-tinted glasses when assessing policy decisions at the next meeting,” said Charlie Ripley at Allianz Investment Management.

    Stocks are likely to fall when the Fed delivers its first rate cut because the pivot will come as data signal a hard — rather than soft — landing for the US economy, according to Bank of America Corp.’s Michael Hartnett.

    In the history of the start to Fed easing since 1970, cuts in response to a downturn have proved negative for stocks and positive for bonds, the BofA strategist wrote in a note, citing seven examples that demonstrated this pattern. “One very important difference in 2024 is extreme degree to which risk assets have front-run Fed cuts,” Hartnett said.

    Some of the main moves in markets:

    Stocks

    • The S&P 500 fell 1.8% as of 4 p.m. New York time

    • The Nasdaq 100 fell 2.4%

    • The Dow Jones Industrial Average fell 1.5%

    • The MSCI World Index fell 2%

    • The Russell 2000 Index fell 3.5%

    Currencies

    • The Bloomberg Dollar Spot Index fell 0.7%

    • The euro rose 1.1% to $1.0912

    • The British pound rose 0.5% to $1.2809

    • The Japanese yen rose 1.9% to 146.59 per dollar

    Cryptocurrencies

    • Bitcoin fell 3.2% to $62,592.26

    • Ether fell 4.9% to $3,011.61

    Bonds

    • The yield on 10-year Treasuries declined 18 basis points to 3.80%

    • Germany’s 10-year yield declined seven basis points to 2.17%

    • Britain’s 10-year yield declined five basis points to 3.83%

    Commodities

    • West Texas Intermediate crude fell 3.1% to $73.97 a barrel

    • Spot gold fell 0.4% to $2,436.77 an ounce

    This story was produced with the assistance of Bloomberg Automation.

    –With assistance from Andre Janse van Vuuren, Lynn Thomasson and Lu Wang.

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    ©2024 Bloomberg L.P.

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  • Euro Rises After French Vote, China Shares Slip: Markets Wrap

    Euro Rises After French Vote, China Shares Slip: Markets Wrap

    (Bloomberg) — The euro climbed with European stock-index futures on speculation Marine Le Pen’s far-right party will struggle to win an outright majority in French elections, easing investor concern that Europe’s second-largest economy was headed for a more radical policy shift.

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    Futures on French government bonds edged higher, while those on German bunds dropped after the first round of voting showed Le Pen’s National Rally in front of President Emmanuel Macron’s centrist alliance, albeit less comfortably than some polls projected. A very strong showing for her party would have increased the odds of expansive fiscal policy in France, whose deficit already exceeds what’s allowed under European Union rules.

    Most Asian shares rose, with Japanese and South Korean benchmarks both gaining. Chinese equities slipped after a report showed factory activity contracted for a second month in June. While data showed the Caixin manufacturing gauge edged up last month, Bloomberg Economics said the marginal improvement did little to counter the worrisome message from official surveys. Hong Kong financial markets are shut for a holiday.

    “We are starting off in Asia with that sense of relief that the far-right parties did not get the kind of majority that was feared,” Charu Chanana, a market strategist for Saxo Capital Markets in Singapore, told Bloomberg Television’s David Ingles and Stephen Engle.

    In addition to French politics, investors will be looking to the European Central Bank for clues, she said, adding that “there’s been some sense of stability for the euro zone economy after that first rate cut, but we certainly don’t look like we’re out of the woods yet.”

    France’s second round of voting will be held on July 7. The French political world is now embarking on a period of horse-trading. In constituencies where three people qualified for the runoffs, the third-placed candidate can withdraw to boost the chances of another mainstream party defeating the far right.

    Japan Confidence

    Confidence among Japan’s large manufacturers rose, data on Monday showed, leaving the door open for the central bank to consider an interest-rate increase later this month. The yield for the nation’s 10-year bond rose 2 basis points to 1.07%.

    One in three economists surveyed by Bloomberg predicts a rate hike at the BOJ’s next gathering. The yen dropped to the lowest level since 1986 last week, prompting some analysts to flag a heightened risk of a rate move as Governor Kazuo Ueda has pledged to watch the yen’s impact on inflation closely.

    A swath of data indicated the US biggest economy is cooling without lasting damage to consumers. US consumer sentiment declined by less than initially estimated on expectations inflationary pressures will moderate and the Fed’s preferred inflation gauge marked its smallest advance in six months. Ten-year treasuries were little changed on Monday.

    “Going into the second half, there’s a lot of election election uncertainty and we think the dollar will be the best risk-off hedge,” Alex Loo, foreign exchange and macro strategist at TD Securities, told Annabelle Droulers and Shery Ahn on Bloomberg Television. “We do like its appeal as a safe-haven currency.”

    In commodities, oil was little changed as traders weighed China’s economic outlook and geopolitical risks in Europe and the Middle East. Gold was also little changed.

    Key events this week:

    • Eurozone S&P Global Eurozone Manufacturing PMI, Monday

    • Indonesia CPI, Monday

    • India HSBC Manufacturing PMI, Monday

    • UK S&P Global / CIPS UK Manufacturing PMI, Monday

    • US construction spending, ISM Manufacturing, Monday

    • ECB President Christine Lagarde speaks, Monday

    • Bundesbank President Joachim Nagel speaks, Monday

    • RBA issues minutes of June policy meeting, Tuesday

    • South Korea CPI, Tuesday

    • Eurozone CPI, unemployment, Tuesday

    • Fed Chair Jerome Powell speaks, Tuesday

    • ECB President Christine Lagarde speaks, Tuesday

    • Australia retail sales, Wednesday

    • China Caixin services PMI, Wednesday

    • Eurozone S&P Global Eurozone Services PMI, PPI, Wednesday

    • Poland rate decision, Wednesday

    • US FOMC minutes, ISM Services, factory orders, trade, initial jobless claims, durable goods, Wednesday

    • ECB President Christine Lagarde speaks, Wednesday

    • New York Fed President John Williams speaks, Wednesday

    • Sweden’s Riksbank issues minutes of June meeting, Wednesday

    • Australia trade, Thursday

    • Brazil trade, Thursday

    • UK general election, Thursday

    • European Union provisional tariffs on China EVs set to be introduced, Thursday

    • ECB publishes account of June’s policy meeting, Thursday

    • US Independence Day holiday, Thursday

    • Philippines CPI, Friday

    • Taiwan CPI, Friday

    • Thailand CPI, international reserves, Friday

    • Eurozone retail sales, Friday

    • France trade, industrial production, Friday

    • Germany industrial production, Friday

    • ECB President Christine Lagarde speaks, Friday

    • Canada unemployment, Friday

    • US unemployment, nonfarm payrolls, Friday

    • New York Fed President John Williams speaks, Friday

    Some of the main moves in markets:

    Stocks

    • S&P 500 futures rose 0.3% as of 12:50 p.m. Tokyo time

    • Hang Seng futures fell 0.4%

    • Nikkei 225 futures (OSE) rose 0.1%

    • Japan’s Topix rose 0.4%

    • Australia’s S&P/ASX 200 fell 0.3%

    • The Shanghai Composite rose 0.3%

    • Euro Stoxx 50 futures rose 1.1%

    Currencies

    • The Bloomberg Dollar Spot Index was little changed

    • The euro rose 0.4% to $1.0752

    • The Japanese yen was little changed at 161.04 per dollar

    • The offshore yuan was little changed at 7.3016 per dollar

    Cryptocurrencies

    • Bitcoin rose 2.4% to $63,373.65

    • Ether rose 2.3% to $3,495.2

    Bonds

    • The yield on 10-year Treasuries was little changed at 4.39%

    • Japan’s 10-year yield advanced two basis points to 1.070%

    • Australia’s 10-year yield advanced seven basis points to 4.38%

    Commodities

    This story was produced with the assistance of Bloomberg Automation.

    –With assistance from Matthew Burgess.

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    ©2024 Bloomberg L.P.

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  • Asian Stocks Rise on Reports of Chinese Bond Sale: Markets Wrap

    Asian Stocks Rise on Reports of Chinese Bond Sale: Markets Wrap

    (Bloomberg) — Asian stocks clawed back earlier losses as reports of a planned China ultra-long bond sale boosted optimism the funds raised will bolster the economy.

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    Hong Kong’s equity benchmark climbed to the highest since August after the news, while mainland-listed shares trimmed declines. China’s 1 trillion yuan ($138 billion) ultra-long special bond issuance program will start Friday and eventually include 20-year debt, 30-year notes and 50-year securities, according to people familiar with the matter.

    News of the planned debt issuance boosted sentiment toward regional equities after weak Chinese data published over the weekend had led to initial stock losses. The specter of further US-China trade tensions also intensified with a report on how much President Biden is set to increase tariffs on Chinese electric vehicles.

    “You are looking at a slightly muddied growth outlook” for China, Sonal Desai, chief investment officer at Franklin Templeton said in an interview on Bloomberg Television before news of the debt sale was published. Regardless of who gets elected in the US election in November, we are going to see an escalation of US-China trade tensions, he said.

    Bloomberg’s dollar index and benchmark 10-year Treasuries were both little changed. Japanese bonds fell after the central bank offered to purchase a smaller amount of government debt than at a previous auction.

    Investors are scrutinizing comments by US officials for signs of how long the Federal Reserve will keep interest rates at elevated levels. Fed Bank of Dallas President Lorie Logan said last week it’s still too early to think about lowering borrowing costs, while Governor Michelle Bowman said she doesn’t expect it will be appropriate for the Fed to cut rates in 2024.

    Potential major catalysts for markets this week include a policy rate decision from China on Wednesday and a US April inflation print the same day.

    “There is growing confidence in the Chinese market, even though the economic indicators do not fully support this optimism,” said Tareck Horchani, head of prime brokerage dealing at Maybank Securities Pte. “The movement seems to be driven more by technical factors than fundamental ones.”

    Read more: High-Risk Options Bet on Bond Rally at Risk of Losing Millions

    The weak Chinese data weighed on oil Monday, with commodity traders also looking ahead to an OPEC+ meeting on supply policy.

    Iraqi Oil Minister Hayyan Abdul Ghani initially said at the weekend that Baghdad had cut production enough and wouldn’t agree to more. But later, he said that any decision was a matter for OPEC, and it would stick to whatever the group decided. OPEC+ meets June 1.

    Elsewhere this week, the euro area is set to report inflation and growth figures while a swath of Federal Reserve officials are due to speak including Chair Jerome Powell.

    US and European stock futures were little changed.

    Some key events this week:

    • Australia business confidence, Monday

    • New Zealand food prices, inflation expectations, Monday

    • India trade, CPI, Monday

    • Euro-area finance ministers meet in Brussels, Monday

    • Australia 2024-25 budget, Tuesday

    • Japan PPI, Tuesday

    • Germany CPI, ZEW survey expectations, Tuesday

    • UK jobless claims, unemployment, Tuesday

    • US PPI, Tuesday

    • Fed Chair Jerome Powell and ECB Governing Council member Klaas Knot speak, Tuesday

    • China rate decision, Wednesday

    • Eurozone industrial production, GDP, Wednesday

    • US CPI, retail sales, business inventories, empire manufacturing, Wednesday

    • Australia unemployment, Thursday

    • Japan GDP, industrial production, Thursday

    • China property prices, retail sales, industrial production, Friday

    • Eurozone CPI, Friday

    Stocks

    • S&P 500 futures were little changed as of 12:18 p.m. Tokyo time

    • Nikkei 225 futures (OSE) fell 0.1%

    • Japan’s Topix was little changed

    • Australia’s S&P/ASX 200 fell 0.3%

    • Hong Kong’s Hang Seng rose 0.4%

    • The Shanghai Composite fell 0.3%

    • Euro Stoxx 50 futures were little changed

    Currencies

    • The Bloomberg Dollar Spot Index was little changed

    • The euro was little changed at $1.0770

    • The Japanese yen was little changed at 155.80 per dollar

    • The offshore yuan was little changed at 7.2397 per dollar

    Cryptocurrencies

    • Bitcoin fell 0.8% to $60,812.87

    • Ether fell 1.8% to $2,870.18

    Bonds

    Commodities

    • West Texas Intermediate crude fell 0.2% to $78.07 a barrel

    • Spot gold fell 0.2% to $2,356.90 an ounce

    This story was produced with the assistance of Bloomberg Automation.

    –With assistance from Ishika Mookerjee.

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    ©2024 Bloomberg L.P.

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  • Nvidia CEO Says Nations Seeking Own AI Systems Will Raise Demand

    Nvidia CEO Says Nations Seeking Own AI Systems Will Raise Demand


    (Bloomberg) — Nvidia Corp. Chief Executive Officer Jensen Huang said countries around the world aiming to build and run their own artificial intelligence infrastructure at home will drive up demand for his company’s products.

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    Nations including India, Japan, France and Canada are talking about the importance of investing in “sovereign AI capabilities,” Huang said in an interview Thursday with Bloomberg Television. “Their natural resource – data – should be refined and produced for their country. The recognition of sovereign AI capabilities is global.”

    At the time of the interview, Huang was in Canada, which itself is home to a number of academic institutions that have significantly contributed to breakthroughs in the type of generative AI systems that power tools such as OpenAI’s popular ChatGPT. The country now finds itself with a growing need for the supercomputers necessary to capitalize on the work of its academics, he said.

    Huang, who co-founded the chip designer Nvidia, has been talking for months about the need for countries and their companies to keep precious data and the intelligence that can be extracted from it local. Such a national approach to the AI boom stands to drive an expansion of data centers that would need Nvidia’s know-how and hardware.

    The world’s most valuable chipmaker is estimated to have doubled its sales in the fiscal year, driven by the AI spending of its biggest customers such as Microsoft Corp. Meta Platforms Inc., Amazon.com Inc. and Alphabet Inc. Huang now wants to expand his customer base by persuading corporations and government agencies to build their own infrastructure.

    “The vast majority of the computing market has been in the US, and to a much smaller degree, China,” he said. “For the very first time, because of generative AI computer technology, it’s going to impact literally every single country. So some of the markets will be quite large and global.”

    Nvidia, which has become Wall Street’s favorite bet on AI, has managed to exceed analysts’ expectations for the past few quarters of earnings, and it may need to find new markets to maintain that streak. Other tech companies that have been associated with the AI boom over the past year, such as chip-making rival Advanced Micro Device Inc., have posted earnings and outlooks this quarter that disappointed investors.

    Nvidia may prove the exception. It’s arguably the only tech company that has demonstrated significant revenue growth from AI that has already transformed the chip supplier from a niche player to the biggest beneficiary of the AI boom. Analysts are projecting that the surge in demand for Nvidia’s products will turn it into the biggest company by revenue in the chip industry as early as 2025.

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  • China Woes Cast Markets Shadow as New Year Starts: Markets Wrap

    China Woes Cast Markets Shadow as New Year Starts: Markets Wrap

    (Bloomberg) — Chinese shares dragged down Asian equities on the first trading day of the year following weaker-than-expected factory data and a speech from President Xi Jinping that flagged the headwinds facing the economy. Crude oil rose.

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    Hong Kong’s benchmark share gauge slid as much as 1.7%, while its peers in the mainland and Taiwan also dropped. The losses drove a regional equity benchmark toward its first decline in seven days.

    Chinese factory activity shrank in December to the lowest level in six months, data published Sunday showed, while a private gauge of manufacturing released Tuesday showed a slight gain. Sluggish activity in the world’s second-largest economy also contributed to a slump in factories across Asia.

    President Xi in his annual new year address televised Sunday pledged to strengthen economic momentum and job creation, while conceding some “enterprises had a tough time” and “people had difficulty finding jobs and meeting basic needs.”

    China’s economy may face another tough year in 2024, said Mark Matthews, head of Asia research at Julius Baer. “President Xi has made it very clear that on the economic front, his priority is bringing down the size of the property sector and its importance in the economy,” he said on Bloomberg Television. “That process is painful.”

    Crude Gains

    Oil gained after Iran dispatched a warship to the Red Sea in response to the destruction of three Houthi boats by the US Navy over the weekend, a move that risks ratcheting up tensions and complicating Washington’s goal of securing a waterway that’s vital to global trade.

    Sentiment in Asia was also dented after people familiar said ASML Holding NV, which makes semiconductor manufacturing equipment, canceled shipments of some of its machines to China at the request of US President Joe Biden’s administration.

    US stock futures were little changed. The yen weakened against most of its Group-of-10 peers in thin trading as investors monitored conditions after an earthquake in Japan on Monday. US 10-year note futures dropped, while cash Treasuries are shut in Asia for a holiday in Japan. Australian bonds slipped.

    Bitcoin climbed above $45,000 for the first time in nearly two years as anticipation of an approval of an exchange-traded fund investing directly in the biggest token intensified.

    Rising Risks

    Signs of exhaustion have emerged after a more than $8 trillion surge in the S&P 500 last year. Traders have looked past Federal Reserve uncertainty, recession angst and geopolitical risks. And many who came into 2023 dreading all that have ended up scrambling to chase the rally.

    “With an especially rare S&P nine-week winning streak already in the books, the index into resistance near the 4,800 level, and daily and weekly overbought readings, too, these factors combine to say we should expect some type of a consolidation, correction, or pullback – something,” John Roque, technical analyst at 22V Research, wrote in a note.

    Meanwhile, despite the persisting weakness in China, some investors consider a slump of almost 60% is a signal to buy Chinese stocks. Almost a third of 417 respondents to Bloomberg’s latest Markets Live Pulse survey say they will increase their China investments over the next 12 months. That compares with just 19% in a similar August survey and is higher than the 25% who planned to boost exposure in March.

    Key events this week:

    • Eurozone S&P Global Eurozone Manufacturing PMI, Tuesday

    • UK S&P Global UK Manufacturing PMI, Tuesday

    • Germany unemployment, Wednesday

    • US FOMC minutes, ISM Manufacturing, job openings, light vehicle sales, Wednesday

    • Richmond Fed President Tom Barkin — an FOMC voter in 2024 — speaks, Wednesday

    • China Caixin services PMI, Thursday

    • Eurozone S&P Global Eurozone Services PMI, Thursday

    • US initial jobless claims, ADP employment, Thursday

    • Eurozone CPI, PPI, Friday

    • US nonfarm payrolls/unemployment, factory orders, ISM services index, Friday

    • Richmond Fed President Tom Barkin — an FOMC voter in 2024 — speaks, Friday

    Some of the main moves in markets:

    Stocks

    • S&P 500 futures were little changed as of 2:14 p.m. Tokyo time. The S&P 500 fell 0.3% on Friday

    • Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.4%

    • Hong Kong’s Hang Seng Index fell 1.4%

    • China’s Shanghai Composite Index fell 0.1%

    • Australia’s S&P/ASX 200 Index rose 0.5%

    Currencies

    • The Bloomberg Dollar Spot Index rose 0.1%

    • The euro fell 0.2% to $1.1025

    • The Japanese yen fell 0.4% to 141.46 per dollar

    • The offshore yuan was little changed at 7.1290 per dollar

    • The Australian dollar rose 0.2% to $0.6828

    Cryptocurrencies

    • Bitcoin rose 4% to $45,353.99

    • Ether rose 2.2% to $2,390.83

    Bonds

    Commodities

    • West Texas Intermediate crude rose 1.7% to $72.85 a barrel

    • Spot gold rose 0.4% to $2,071.68 an ounce

    This story was produced with the assistance of Bloomberg Automation.

    –With assistance from Joanna Ossinger.

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  • Bonds Retreat as Doubts Over Rate Cuts Creep In: Markets Wrap

    Bonds Retreat as Doubts Over Rate Cuts Creep In: Markets Wrap

    (Bloomberg) — Stocks and bonds retreated as traders pause after November’s blockbluster rally and debate the case for interest rate cuts. Bitcoin surged past $41,000, while gold briefly touched an all time high.

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    The 10-year Treasury yield added four basis points to 4.24%, while European stocks and US futures posted modest losses. Gold surpassed $2,130 an ounce before giving up gains for the day.

    A slew of economic reports this week are expected to shed light on the state of the US labor market and whether markets are prematurely excited that softer economic conditions can open the door to Federal Reserve rate cuts.

    “Rates seem to price more the positive news than not,” Mauro Valle, head of fixed income at Generali Investments Partners, wrote in a note. “It’s unlikely to see another movement for lower yields in the final weeks of the year.”

    The latest reading on US job openings (or JOLTS) for October is due to be published tomorrow, followed by ADP’s National Employment Report on Wednesday and non-farm payrolls on Friday.

    Gold slid from its intraday high, trading around $2,063 an ounce. Bitcoin climbed past the $41,000 level to the highest since April 2022.

    “As long as those rate conditions stay where they are, gold will remain supported over the next three to four weeks,” Eric Robertsen, global head of research and chief strategist at Standard Chartered Bank, said on Bloomberg Television.

    Indian equities were headed for a fresh record after Prime Minister Narendra Modi’s victories in three key state elections boosted expectations of policy continuity.

    Shares of distressed developer China Evergrande Group surged as much as 22% after a Hong Kong court again postponed a decision on whether the world’s most-indebted property developer should be wound up.

    Key events this week:

    • Riskbank November meeting minutes released, Monday

    • US factory orders, durable goods, Monday

    • Reserve Bank of Australia rate decision, Tuesday

    • Japan’s Tokyo CPI, Tuesday

    • China Caixin services PMI, Tuesday

    • South Korea CPI, GDP, Tuesday

    • Eurozone PMIs, Tuesday

    • Australia GDP, Wednesday

    • Eurozone retail sales, Wednesday

    • Bank of Canada rate decision, Wednesday

    • China trade, FX reserves, Thursday

    • Eurozone GDP, Thursday

    • Germany industrial production, Thursday

    • US wholesale inventories, initial jobless claims, Thursday

    • Japan household spending, GDP, Friday

    • US non-farm payrolls, University of Michigan consumer sentiment, Friday

    Some of the main moves in markets:

    Stocks

    • The Stoxx Europe 600 fell 0.2% as of 9:45 a.m. London time

    • S&P 500 futures fell 0.3%

    • Nasdaq 100 futures fell 0.3%

    • Futures on the Dow Jones Industrial Average fell 0.2%

    • The MSCI Asia Pacific Index was little changed

    • The MSCI Emerging Markets Index was little changed

    Currencies

    • The Bloomberg Dollar Spot Index rose 0.1%

    • The euro was little changed at $1.0878

    • The Japanese yen rose 0.1% to 146.66 per dollar

    • The offshore yuan fell 0.2% to 7.1401 per dollar

    • The British pound fell 0.2% to $1.2680

    Cryptocurrencies

    • Bitcoin rose 4.9% to $41,687.05

    • Ether rose 3.5% to $2,259.54

    Bonds

    • The yield on 10-year Treasuries advanced four basis points to 4.24%

    • Germany’s 10-year yield was little changed at 2.37%

    • Britain’s 10-year yield advanced four basis points to 4.18%

    Commodities

    This story was produced with the assistance of Bloomberg Automation.

    –With assistance from Alex Nicholson.

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  • Asian Stocks Fall as China Profit Growth Slows: Markets Wrap

    Asian Stocks Fall as China Profit Growth Slows: Markets Wrap

    (Bloomberg) — Asian stocks swung to a loss and US equity futures fell as slowing Chinese industrial profit growth sapped optimism after last week’s equity rally. The yen strengthened against all its Group-of-10 peers.

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    China shares led declines as data showed profits at the nation’s industrial companies climbed at a slower pace, suggesting the economic recovery remains uncertain. The Hang Seng China Enterprises Index dropped as much as 1.4% while CSI 300 Index closed 1.2% lower in Monday’s morning session. Benchmarks also fell in Australia and Japan.

    Equities trimmed some of last week’s gains amid uncertainty before the next installment of key global economic data this week including euro-zone inflation data, China PMIs and US personal consumption numbers on Thursday, and US, European and Chinese PMIs on Friday. Asian markets had little direction from the US following the holiday shortened post-Thanksgiving session Friday.

    “We’ve seen US bond yields gap higher at the open, and that has weighed on equity market sentiment to send US futures down alongside Chinese markets that are already under pressure from weak industrial profits,” said Matt Simpson, a senior market strategist at City Index Inc.

    US stock futures dropped in Asia after the S&P 500 capped a fourth week of gains Friday, when the VIX — Wall Street’s “fear gauge” and a measure of equity volatility — fell to its lowest level since January 2020.

    The subdued growth at Chinese industrial companies will likely keep firms cautious about expanding or hiring more, which in turn could add more pressure on prices. Profits increased just 2.7% in October from a year ago, down from September’s 11.9% gain.

    “The profit numbers show that current recovery momentum is still fairly fragile,” Dong Chen, head of Asia macroeconomic research at Pictet Wealth Management, said in an interview with Bloomberg Television. “We still have a long way to go to get out of the woods.”

    This week, investors will be looking especially closely at Chinese activity data to gauge the health of the world’s second largest economy. Traders will be assessing shadow banking stocks after Chinese authorities said they recently opened criminal investigations into the money management business of Zhongzhi Enterprise Group Co.

    In Hong Kong, the one-month interbank offered rate jumped to the highest since 2007 as the supply of cash tightened toward year-end.

    ‘Remain Heavy’

    Treasury 10-year yields climbed as much as five basis points to 4.51%, the highest in more than a week.

    The dollar was mixed in Asian trade after Bloomberg’s index of the greenback slipped 0.5% last week.

    The US currency may “remain heavy” for most of the week as fund managers adjust hedges and cash heads into developing economies, Commonwealth Bank of Australia strategists including Joseph Capurso wrote in a note to clients. “The backdrop of low volatility and expectations for a soft landing in the US economy supports portfolio capital flows into emerging markets,” they said.

    In earnings due this week, Crowdstrike Holdings Inc. will underscore how businesses are prioritizing cybersecurity after recent high-profile corporate hacks, while Salesforce Inc. and Dell Technologies Inc. are expected to post slower sales growth as overall corporate expenditure tightens.

    Traders will also be keeping an eye on gold and oil after Israel and Hamas signaled that a temporary cease-fire in Gaza could be extended beyond Monday to allow for the release of more hostages and prisoners. Oil fell for a fourth day as traders looked ahead to this week’s delayed OPEC+ meeting and wider financial markets carried a risk-off tone.

    Key events this week:

    • European Central Bank President Christine Lagarde appears in parliamentary committee, Monday

    • Australia retail sales, Tuesday

    • NATO foreign ministers meet, Tuesday

    • US Conf. Board consumer confidence, Tuesday

    • Fed Governor Chris Waller, Chicago Fed President Austan Goolsbee speak at different events, Tuesday

    • Australia CPI, Wednesday

    • Reserve Bank of New Zealand policy decision, Wednesday

    • Eurozone economic confidence, consumer confidence, Wednesday

    • Bank of England Governor Andrew Bailey speaks, Wednesday

    • US wholesale inventories, GDP, Wednesday

    • Fed releases its Beige Book of regional economic activity, Wednesday

    • Cleveland Fed President Loretta Mester speaks, Wednesday

    • China non-manufacturing and manufacturing PMIs, Thursday

    • Eurozone CPI, Thursday

    • US PCE deflator, Thursday

    • OPEC+ meeting, focused on finalizing output levels for 2024, Thursday

    • China Caixin manufacturing PMI, Friday

    • Eurozone manufacturing PMI, Friday

    • UK S&P Global/CIPS Manufacturing PMI, Friday

    • US construction spending, ISM Manufacturing, light vehicle sales, Friday

    • Fed Chair Jerome Powell, Chicago Fed President Austan Goolsbee speak at separate events, Friday

    Some key moves in markets:

    Stocks

    • S&P 500 futures fell 0.3% as of 1:59 p.m. Tokyo time. The S&P 500 was little changed on Friday

    • Nasdaq 100 futures fell 0.5%. The Nasdaq 100 fell 0.1%

    • Japan’s Topix fell 0.3%

    • Australia’s S&P/ASX 200 fell 0.7%

    • Hong Kong’s Hang Seng fell 1%

    • The Shanghai Composite fell 0.8%

    • Euro Stoxx 50 futures fell 0.4%

    Currencies

    • The Bloomberg Dollar Spot Index was little changed

    • The euro was little changed at $1.0947

    • The Japanese yen rose 0.3% to 149.01 per dollar

    • The offshore yuan fell 0.2% to 7.1617 per dollar

    • The Australian dollar fell 0.2% to $0.6574

    • The British pound was little changed at $1.2607

    Cryptocurrencies

    • Bitcoin fell 0.6% to $37,391.56

    • Ether fell 1.1% to $2,052.62

    Bonds

    • The yield on 10-year Treasuries advanced two basis points to 4.49%

    • Japan’s 10-year yield advanced one basis point to 0.780%

    • Australia’s 10-year yield was little changed at 4.55%

    Commodities

    • West Texas Intermediate crude fell 1% to $74.78 a barrel

    • Spot gold rose 0.6% to $2,013.16 an ounce

    This story was produced with the assistance of Bloomberg Automation.

    –With assistance from Matthew Burgess.

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  • Sam Altman Returns as OpenAI CEO in Chaotic Win for Microsoft

    Sam Altman Returns as OpenAI CEO in Chaotic Win for Microsoft

    (Bloomberg) — OpenAI will bring back Sam Altman and overhaul its board with new directors, a stunning reversal in a drama that’s transfixed Silicon Valley and the global AI industry.

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    Altman is returning as chief executive officer and the initial board will be led by Bret Taylor, a former co-CEO of Salesforce Inc. and director at Twitter before it was acquired by Elon Musk. The other directors are Larry Summers, the US Treasury Secretary under President Bill Clinton, and existing member Adam D’Angelo, the co-founder and CEO of Quora Inc. OpenAI is now working “to figure out the details,” the company said in a post on X, formerly Twitter.

    The reworked board will not be final: its main priority is to select up to nine new directors, said a person familiar with the negotiations who asked not to be identified. Board composition proved to be a major sticking point in negotiations for Altman’s return after his shocking ouster on Friday.

    The decision to restore him to the world’s best-known AI startup marks a victory for biggest backer Microsoft Corp., which worked with fellow investors to reverse Altman’s firing. The two new board members also hold appeal for Wall Street and the Silicon Valley crowd. Summers, a Harvard academic and paid contributor to Bloomberg Television, sits on the board of several startups, including Jack Dorsey’s Block Inc. Taylor is a director at Shopify Inc. and helped steer the sale of Twitter to Musk last year, acting as a calming force.

    Parties are still determining which members — beside D’Angelo, who has been appointed — will stay on the new OpenAI board.

    Altman agreed not to take a board seat initially in order to get the deal done, said the person. It’s likely he’ll join the board eventually. He also agreed to an internal investigation into the conduct that led to his dismissal, another person said.

    OpenAI’s biggest backer celebrated Altman’s return to the helm, after briefly agreeing to hire him on Sunday to start a new in-house research group. Microsoft, whose AI strategy hinges on the startup’s technology, will likely have representation on the new board, certainly as an observer and possibly with one or more seats, one of the people said.

    OpenAI’s earlier board members included D’Angelo, OpenAI co-founder and chief scientist Ilya Sutskever, Tasha McCauley of GeoSim Systems, and Helen Toner, director at Georgetown’s Center for Security and Emerging Technology.

    Read more: OpenAI Negotiations to Reinstate Altman Snag Over Board Role

    The agreement followed four days of high-stakes negotiations, after nearly all of its employees threatened to quit if Altman was not reinstated. Much of the drama played out on X as notable financiers, Silicon Valley honchos and key players from Nadella to Altman himself posted declarations, exchanged messages, liked each others’ posts and otherwise advocated their position. Altman’s rehiring triggered swift congratulations on X from main characters in the saga, including former president Greg Brockman — who said he too is returning to the company — and Chief Technology Officer Mira Murati.

    In a statement Friday that triggered the furor, OpenAI said Altman was dismissed after an internal review by the board found the chief executive “was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities.”

    Negotiations for his return reached an impasse on Sunday in part over pressure from Altman and others for existing board members to resign, according to people familiar with the matter. Instead, the board named a new leader — former Twitch CEO Emmett Shear.

    Within hours, most of OpenAI’s 770 employees signed a letter to the board saying they might quit and join Microsoft unless all directors resigned and Altman was reinstated. Among the many who signed the letter was Murati, who had been named interim CEO on Friday, and Sutskever.

    The quick reversal could appease investors and reduce the threat of employees fleeing. But it also raises questions about the path ahead for the ChatGPT maker and other AI startups, which have tried to balance developing artificial intelligence responsibly alongside the need to raise vast amounts of capital from investors to support the expensive computing infrastructure required to build these tools.

    Investors were blindsided by Altman’s removal. Microsoft, which backed the startup with a more than $10 billion stake, had only a few minutes’ advance notice about Altman’s firing. The software giant began working with investors including Thrive Capital and Tiger Global Management to bring him back, according to people familiar with the matter who asked to remain anonymous discussing private information.

    Read More: OpenAI Leaders Tell Staff ‘Get Back to Shipping’ Amid Tumult

    More than any other figure, Altman, 38, emerged as the face of a new era of artificial intelligence technology, thanks to the viral success of ChatGPT. Altman was at the center of the industry’s efforts this year to work with regulators and he met regularly with world leaders, including US President Joe Biden and UK Prime Minister Rishi Sunak. On Thursday, he appeared on a panel at the Asia-Pacific Economic Cooperation conference, attended by other executives and world leaders, to discuss the future of AI and its risks.

    Behind the scenes, however, Altman clashed with members of his board, especially Sutskever, over how quickly to develop generative AI, how to commercialize products and the steps needed to lessen their potential harms to the public, people with knowledge of the matter have said.

    Alongside rifts over strategy, board members also contended with Altman’s entrepreneurial ambitions.

    He has been looking to raise tens of billions of dollars from Middle Eastern sovereign wealth funds to create an AI chip startup to compete with AI accelerators made by Nvidia Corp., according to a person with knowledge of the investment proposal. Altman was courting SoftBank Group Corp. chairman Masayoshi Son for a multibillion-dollar investment in a new business to make AI-oriented hardware in partnership with former Apple Inc. designer Jony Ive.

    The boardroom drama carried echoes of other coups in Silicon Valley history. Apple co-founder Steve Jobs was fired as CEO in 1985 only to return more than a decade later. Twitter co-founder Dorsey was pushed out in 2008 and came back as CEO seven years later.

    –With assistance from Dina Bass, Ashlee Vance, Ed Ludlow and Anne VanderMey.

    (Updates with board deliberations from the second paragraph. A previous version of this story was corrected to reflect Summers’ tenure.)

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  • Asian Equities Climb After Wall Street Tech Rally: Markets Wrap

    Asian Equities Climb After Wall Street Tech Rally: Markets Wrap

    (Bloomberg) — Shares in Asia were mostly higher following a tech-driven rally Friday on Wall Street, as investors look ahead to crucial US inflation data due Tuesday.

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    Stocks rose in Japan and South Korea, along with Hong Kong futures, while Australian shares were slightly lower in early trading Monday. The moves followed a 2.3% gain Friday for the tech-heavy Nasdaq 100, helped along by a record high for Microsoft Corp. The S&P 500 rose 1.6%. US stock futures slid in Asia early Monday.

    Markets are closed in Singapore and Malaysia for a holiday.

    Australian and New Zealand government bonds edged lower after short-dated Treasuries sold off on Friday. Those declines failed to weigh on the long end of the curve. The 30-year yield was left largely unchanged while the 10-year yield rose three basis points.

    Both Treasuries and the dollar were steady early Monday.

    “We are going to see a change in policy in Japan and that is going to make the yen attractive,” Sonal Desai, chief investment officer for fixed income at Franklin Templeton, said in an interview with Bloomberg Television. “The BOJ will ultimately be pushed towards changing its own interest rate stance which will bring money back.”

    Japanese producer prices declined in October from the prior month. India will release its latest inflation report Monday and new loan and money supply figures for China could also be released.

    In the US, inflation is anticipated to have declined to a year-over-year rate of 3.3% in October, down from 3.7% recorded in the prior month, when the data is released Tuesday. Many bond investors are convinced a sustained rally in Treasuries will fail to occur without a clear economic slowdown. US President Joe Biden and his Chinese counterpart Xi Jinping meet Wednesday.

    ANZ Group Holdings Ltd. shares fell after the bank’s chief executive officer warned of a challenging economic environment ahead in its latest earnings results. Profits for the group were buoyed by higher interest rates.

    Other companies set to report Monday include Apple supplier Hon Hai Precision Industry, also known as Foxconn, Chinese tech giants JD.com Inc and Tencent Holdings Ltd., Japanese financial heavyweights Mitsubishi UFJ Financial Group and Mizuho Financial Group, Walmart Inc. and Siemens.

    Australia is grappling with the fallout of a cyberattack on port operator DP World Plc as the holiday season approaches. Operations at its largest ports are slowly resuming, the Freight & Trade Alliance said Monday.

    JD.com and Alibaba Group Holding reported a pickup in sales for Singles’ Day, following steep discounts offered by the e-commerce groups.

    Elsewhere, oil trimmed gains from Friday against the backdrop of concerns over global demand. Gold was little changed. Bitcoin hovered near $37,000 — around the highest price in 18 months.

    Events coming up this week:

    • Japan PPI, Monday

    • ECB Vice President Luis de Guindos speaks, Monday

    • US CPI, Tuesday

    • UK jobless claims, Tuesday

    • Chicago Fed President Austan Goolsbee speaks, Tuesday

    • China retail sales, Wednesday

    • UK CPI, Wednesday

    • US retail sales, PPI, Wednesday

    • China new home prices, Thursday

    • US initial jobless claims, Thursday

    • New York Fed President John Williams, Thursday

    • US housing starts, Friday

    • ECB President Christine Lagarde speaks, Friday

    • Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins, San Francisco Fed President Mary Daly all speak, Friday

    Some of the main moves in markets:

    Stocks

    • S&P 500 futures fell 0.2% as of 9:08 a.m. Tokyo time

    • Nasdaq 100 futures fell 0.2%

    • Hang Seng futures rose 0.5%

    • Japan’s Topix rose 0.6%

    • Australia’s S&P/ASX 200 fell 0.2%

    Currencies

    • The Bloomberg Dollar Spot Index was little changed

    • The euro was little changed at $1.0689

    • The Japanese yen was little changed at 151.46 per dollar

    • The offshore yuan was little changed at 7.3045 per dollar

    Cryptocurrencies

    • Bitcoin fell 0.4% to $37,051.83

    • Ether fell 0.8% to $2,044.03

    Bonds

    • The yield on 10-year Treasuries was little changed at 4.64%

    • Japan’s 10-year yield advanced two basis points to 0.850%

    • Australia’s 10-year yield advanced four basis points to 4.66%

    Commodities

    This story was produced with the assistance of Bloomberg Automation.

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