Equity Market Updates
Market Daily
29/09/2025
Macro Update:
US core PCE matches expectations
Core Personal Consumption Expenditures (PCE), the Fed's preferred measure of inflation, rose 2.9% year on year in August, in line with consensus forecasts. Meanwhile, US personal spending saw a third solid lift in a row in August, while the final reading of University of Michigan's consumer sentiment fell to lowest level in four months. We expect the Fed to be on track for two more rate cuts this year (in October and December).
This week, market will focus on any clarification on Trump's sector-specific tariffs and US non-farm payroll data (our estimate is 60k growth and a steady unemployment rate in September) released this Friday. However, there is also a potential US government shutdown beginning on 1 October, as federal funding expires on 30 September. If prolonged, this can result in a delayed payrolls' release and mild downside economic risks. Market will also closely watch the Japanese LDP presidential election on Saturday (4 October).
Main Upcoming Macro Indicators
US EQUITIES
US equities advanced on Friday, as investors appeared undeterred by inflation data and the announcement of new tariffs from President Trump. Major indices recovered from a three-day slide to close the session higher.
EUROPE EQUITIES
European stocks rebounded Friday from three-week lows, driven by financials and industrials, finishing the week largely flat after investors processed the latest US macro data.
We remain positive on European equities in the medium term.
HK EQUITIES
Hong Kong stocks fell on Friday after the Trump administration unveiled fresh steep tariffs on drugs, trucks and furniture.
Meta (META US)
Meta launched on Friday a paid advertisement-free service for British users of popular social-media sites Facebook and Instagram.
Most of the world's billions of users of Facebook and Instagram currently see advertisements, constituting Meta's main revenue driver at more than USD150bln annually.
UK users will be offered the option to pay GBP3.99 monthly on iOS and Android mobile devices, or GBP2.99 for web, to use their main accounts without seeing ads.
The move matches an ad-free service that Meta launched in the European Union in 2023. The company cut the cost of that model last year in response to EU regulators' demand that social-media service providers should be able to access services with less personalised ads based off less user data.
MARKET CONSENSUS: 72 BUYS, 8 HOLDS, 1 SELL, AVERAGE TP USD869.56
Electronic Arts (EA US)
Videogame maker Electronic Arts is reportedly on Friday in advanced talks to go private in a roughly USD50bln deal, likely be the largest leveraged buyout of all time.
A group of investors including private-equity firm Silver Lake, Saudi Arabia's Public Investment Fund and Jared Kushner's investment firm Affinity Partners could unveil a deal for EA as soon as next week.
The take-private offer comes at a crucial time for EA, which is heavily relying on its core sports portfolio and action shooter intellectual property to navigate a sluggish videogame industry as gamers get increasingly selective with their spending.
The deal would also mark further consolidation within the industry after acquisitions of titans such as Activision Blizzard and Zynga, further shrinking the pool of publicly listed videogame companies.
MARKET CONSENSUS: 16 BUYS, 15 HOLDS, 1 SELL, AVERAGE TP USD175.51
Honeywell (HON US)
Honeywell announced on Friday that the Board of Directors approved a rise in the conglomerate's regular annual cash dividend from USD4.52 to USD4.76 per share.
The 5.3% increase will become effective in 4Q25, along with the same quarter's dividend of USD1.19 per share, payable on December 5 of the current year.
Honeywell’s decision to raise the dividend reflects both the company’s focus on value creation and its confidence in the future. Honeywell said it has now raised its annual dividend 16 times in the past 15 years.
MARKET CONSENSUS: 16 BUYS, 11 HOLDS, AVERAGE TP USD251.88
Nucor Corporation (NUE US)
The Nuclear Company said on Friday that it has signed a strategic agreement with US steelmaker Nucor to boost the country's nuclear power supply chain and support domestic manufacturing.
TNC, a US nuclear deployment company, said the companies will assess the use of NQA-1 steel and related infrastructure for gigawatt-scale nuclear reactors as per the American Society of Mechanical Engineers' certification standards.
The partnership supports executive orders from Trump targeting 400 gigawatts of nuclear capacity by 2050, including construction of 10 large-scale reactors in the next five years.
The US has launched an effort to speed development of power plants and transmission lines after Trump on his first day back in office in January issued an order declaring an energy emergency as AI, data centers, and electric vehicles are boosting power demand for the first time in two decades.
MARKET CONSENSUS: 13 BUYS, 3 HOLDS, AVERAGE TP USD158.57
Mercedes-Benz (MBG GR)
Mercedes-Benz on Friday spun out into a new company a team of chip experts in Silicon Valley that is working on creating a new generation of computing brains for self-driving cars, drones and other vehicles.
Athos Silicon, based in Santa Clara, California, will house a group of engineers who for five years worked at Mercedes-Benz Research & Development North America to develop the new chips, which aim to be safe enough for use in cars while using less energy.
As part of the spinout, Athos is receiving intellectual property developed by the group and a "significant" investment from Mercedes-Benz, though neither companies disclosed the value of the transaction.
MARKET CONSENSUS: 11 BUYS, 12 HOLDS, 6 SELLS, AVERAGE TP EUR56.31
Earnings Announcements
US Market
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European Market
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HK - China Market
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Global Indices Changes (%)
Fixed Income Market Updates
US PCE data was in line with expectations, and the US Treasury yield curve reaction was muted. We noticed that some IG corporate bonds can provide competitive spread levels to financials, such as Oracle's new issue from last week. For those who want to diversify from financials, corporate paper is worth another look. As mentioned, investors should continue to lock in fixed income with the Fed rate cut cycle commencing.
European Bank Coco (AT1)
Closing AT1 between -0.125 and -25c across currencies, with rates curves pushing higher on hotter data.. Real money selling was consistent across the asset class. Bonds are still able to find a home. We continue to like At1 bonds of belly duration.
Asia Investment Grade (IG)
Flows were balanced two-way with spreads either side of unchanged. With rates back up to the wider end of the range we are seeing spreads grinding another 1-2 bps (basis points) tighter. In China TMT (Tech, Media and Telecom) still remains firm despite there are more talks in equities about switching out from tech and go into auto/telecom etc.
Asia High Yield (HY)
In HY, closing at lows but stable. Theme wise it's been focused on de-risking, with majority of the sell flows in duration and high beta. Benchmark across regions trading -0.25 to -0.5pt generically. Flow wise fast money are quiet overall and looking at idiosyncratic situations like HK property while real money have been better sellers overall on benchmark risk. Nickel Industries has traded off its highs of 102 to trade down at 101.25 with some profit taking. Vedanta said it is looking at a new 7yr. The 29-30s are down about 1-1.25 points from the levels last week, and the 33s are down about 1.5-2points. Big picture 9-9.5% is hard to find but without a new pool of investors it just feels like its stuck in a range based on macro. We favor Macau gaming in the HY space.
Forex Market Updates
The Dollar gave back some of its gains from the week but still ended strong as markets digest the stronger-than-expected data.
USD
The US Dollar fell but was still on course to notch a second straight week of gains against major peers on Friday after data continued to show U.S. economic resilience, potentially complicating the Federal Reserve's efforts to cut interest rates. U.S. consumer spending, which accounts for more than two-thirds of economic activity, rose 0.6% in August, slightly higher than the 0.5% estimated by economists. Richmond Fed President Thomas Barkin said he sees limited risks of a big rise in either unemployment or inflation, letting the Fed balance its two goals as it debates further interest rate cuts. Fed Vice-chair for Supervision Michelle Bowman said the central bank is near to achieving its 2% inflation target and that she believes decisive interest rate cuts are needed to ward off rising trouble in the job market. Traders are pricing in an 88% chance of a 25 basis-point rate cut at the Fed's next meeting, down from nearly 92% probability a week ago, according to CME's FedWatch tool.
The path of least resistance in the Dollar Index remains to the downside, with immediate support around 96.22.
CAD
The Canadian Dollar steadied against its U.S. counterpart on Friday as domestic data showed the economy growing faster than expected in July, but the currency still posted a steep weekly decline. The pressure on the CAD stems from the broader rise in the USD, wider US-Canada spreads and softer risk appetite. The Canadian 2-year yield was trading 114 basis points below the equivalent U.S. rate, with the spread widening from 92 basis points toward the end of August. Investors tend to favor the higher-yielding currency. Canada's monthly gross domestic product rebounded from three months of contraction to grow by 0.2% in July, eclipsing forecasts for a gain of 0.1%, as mining, manufacturing and wholesale trade boosted growth. An advance estimate for August was less upbeat, showing that GDP was essentially unchanged.
The Loonie should see some consolidation during this weaker level, with USDCAD finding some resistance at the 1.4000 handle.
GBP
The British pound headed for its biggest weekly decline in a month on Friday, under pressure from mounting concerns about the outlook for Britain's long-term finances and from a resurgent dollar, which got a lift from surprisingly strong U.S. growth data the previous day. A shock increase in Britain's public borrowing earlier in the week, coupled with evidence of slowing momentum for both British factories and services, and a weak auction of government debt had already created a negative backdrop for the pound and gilts. Highlighting the concern among investors about the bigger picture for British financial health was Thursday's sharp rise in gilt yields, as that on the benchmark 10-year rose 8.7 basis points to 4.775%, the most in a day since early July, while the pound tumbled. Rising bond yields would normally support a currency, as investors jump on the possibility of securing higher returns. Rising yields and a falling currency tend to reflect crumbling confidence in the economy and the ability of the government to keep its finances on track.
Mounting UK fiscal worries could see Sterling bears target the 1.3140 level moving forward.
XAU
Gold gained on Friday after U.S. inflation data came in line with expectations, reinforcing bets that the Federal Reserve may continue with interest rate cuts later this year. Investors now see an 88% probability of a rate cut in October and a 65% chance of another in December, according to the FedWatch tool. Gold, a traditional safe haven, typically benefits from lower interest rates. Analysts and traders note that silver and platinum are gaining momentum amid elevated gold prices, with investors turning to more affordable alternatives. Chinese President Xi's pledge to cut net Chinese carbon emissions by 7-10% by 2035 has also spurred buying of silver which is used in solar cells.
The precious metal may have found its peak for now, with some profit-taking likely at the 3800 level.
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https://wealthmanagement.bnpparibas/asia/en/disclaimer1.html
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https://wealthmanagement.bnpparibas/ch/en/disclaimer.html
