【Overnight Heavyweight】

Federal Reserve Officials: Further Rate Cuts May Occur in the Coming Quarters

On the 14th local time, technology stocks propelled the market higher, with all three major U.S. stock indices rising, and the Dow and the S&P 500 index once again reaching new historical highs. By the close, the Dow Jones Industrial Average rose by 0.47%, closing above the 43,000 mark for the first time; the Nasdaq Composite rose by 0.87%, and the S&P 500 index rose by 0.77%.

According to Reuters, a batch of key corporate earnings reports will be disclosed this week, with an expected 41 S&P 500 companies to announce their performance. A substantial amount of data from the corporate sector will help investors assess the health of the U.S. economy and justify the reasonableness of stock market valuations.

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Meanwhile, Minneapolis Federal Reserve Bank President Kashkari stated today that as the 2% inflation target approaches, the Federal Reserve may further reduce interest rates. Speaking at a meeting held by the Central Bank of Argentina, Kashkari said, "In the coming quarters, we may need to further moderately lower the policy interest rate," adding, "The future direction of policy will ultimately be driven by actual economic, inflation, and labor market data." Kashkari also indicated that the current monetary policy stance with the federal funds rate between 4.75% and 5% still restricts economic growth, but the extent of this restriction is not yet clear.

In the market, most large-cap technology stocks rose, with Apple and Google gaining over 1%, Facebook and Microsoft slightly higher, Netflix down over 1%, and Amazon slightly lower.

Semiconductor stocks generally rose, with Nvidia closing at $138.07, breaking the previous high of $135.58 set on June 18th. The stock has risen nearly 180% this year and has soared more than nine times since the beginning of 2023; Qualcomm rose over 4%, ASML rose more than 3%, NXP Semiconductors rose over 2%, Micron Technology and Microchip Technology rose over 1%, TSMC and Broadcom slightly higher, AMD down over 1%, and Intel slightly lower.

Popular Chinese concept stocks generally fell, with the NASDAQ Golden Dragon China Index down 2.09%, Tiger Brokers down over 15%, XPeng Motors down about 10%, Kingsoft Cloud down about 9%, NIO down about 7%, Pinduoduo down about 6%, BOSS Zhipin down over 5%, and iQIYI, Weibo, Baidu, and Futu Holdings down over 4%.

OPEC Further Lowers Global Oil Demand ForecastInternational oil prices have plummeted significantly, with WTI November crude oil futures closing down by $1.73, a decrease of 2.29%, at $73.83 per barrel; Brent December crude oil futures closed down by $1.58, a decrease of 2.00%, at $77.46 per barrel. As of press time, the decline in WTI crude oil has expanded to over 4%.

On the local date of the 14th, OPEC (Organization of the Petroleum Exporting Countries) released its monthly oil market report, downgrading the global oil demand growth forecast for 2024 and 2025. This marks the third consecutive month that the organization has revised down its global oil demand growth projections.

According to Reuters, OPEC revised the global daily oil demand growth forecast for 2024 from 2.03 million barrels to 1.93 million barrels compared to the previous year, with the adjusted annual average daily oil demand forecasted to be around 104 million barrels. At the same time, OPEC revised the global daily oil demand growth forecast for 2025 from 1.74 million barrels to 1.64 million barrels compared to the previous year, with the adjusted annual average daily oil demand forecasted to be around 106 million barrels.

OPEC stated that this adjustment was made based on the received data and expectations for oil demand in certain regions.

Bloomberg believes that with the third consecutive downgrade, OPEC is beginning to abandon its strong bullish forecasts since the beginning of the year. The actions of OPEC member countries themselves also indicate a lack of confidence in the outlook, delaying plans to resume suspended crude oil production.

The report indicates that, led by Saudi Arabia, OPEC+ (Organization of the Petroleum Exporting Countries and its allies) will gradually resume a daily production of 2.2 million barrels starting in December, two months later than originally planned. Despite crude oil prices being driven up by geopolitical factors, a price of around $77 per barrel is still considered too low for some OPEC countries. The organization is scheduled to hold a meeting on December 1st to review the output policy for 2025.

However, Citigroup's research department raised its "bull case" oil price forecasts for this quarter and the next on Monday, citing increased concerns about the possibility of supply losses due to escalating conflicts in the Middle East. The bank increased its forecasts for the fourth quarter of 2024 and the first quarter of 2025 from $80 per barrel to $120 per barrel.

India's Inflation Accelerates Faster Than Expected

Data released by the Indian Statistical Bureau on the local date of the 14th shows that the CPI in September rose by 5.49% year-on-year, higher than the expected 5.00% increase, and up from the previous value of a 3.65% increase.

According to Bloomberg, India's inflation accelerated faster than expected in September, justifying the country's central bank's cautious approach amidst growing calls for interest rate cuts.The Reserve Bank of India predicted last week that inflation would accelerate in September, primarily due to statistical reasons, and would keep the benchmark interest rate unchanged at 6.5%. It also eased its policy stance, opening the door for rate cuts in the coming months. However, the country's central bank governor, Shaktikanta Das, has repeatedly stated that he wishes to bring inflation down to the target level of 4% on a durable basis before considering policy easing.

Reports indicate that food prices, which account for about half of the consumer price basket, rose by 5.66% in August and increased by 9.24% year-on-year in September. Among these, vegetable prices surged by 36% year-on-year in September. Nevertheless, due to above-normal rainfall, India has experienced its best monsoon season in four years, laying the groundwork for the harvest of crops such as rice and boosting the economic outlook in rural areas.

Google Eyes Nuclear Power Supply

According to AFP, on the local time of the 14th, Google signed an agreement to purchase electricity from the small modular reactor developer Kairos Power to power artificial intelligence.

The two companies did not disclose the financial details of the agreement, nor did they reveal where the plant will be built. Reports suggest that the first small modular reactor developed in collaboration with Google by Kairos is expected to be online before 2030, and by 2035, more small reactors will be operational, with a total generation capacity of 500 megawatts.

Google's Senior Director of Energy and Climate stated in a briefing, "We believe that nuclear energy plays a key role in supporting clean growth and aiding the advancement of artificial intelligence." "The power grid requires these clean, reliable sources of energy to support the construction of technology."

Reports indicate that tech giants such as Microsoft, Amazon, and Google are rapidly expanding their data center capabilities to meet the computational demands of the artificial intelligence revolution, while also seeking power sources globally.

Nuclear energy is seen as a more stable source of energy compared to solar and wind power, and many tech companies are betting on the rapid development of nuclear energy to meet the power needs of artificial intelligence. Small modular reactors are more compact and potentially easier to deploy, with Microsoft founder Bill Gates also making significant investments in this field. However, the technology is still in its infancy, leading companies to seek existing nuclear power options.

Kairos co-founder and CEO Mike Laufer stated, "We believe this is a very significant partnership." Laufer added that the agreement allows the small modular reactor technology to "mature and learn continuously."