U.S. Stock Outlook | Three Major Index Futures Rise Together, U.S. August CPI Data Approaches

1. As of September 11 (Thursday) before the US stock market opens, the three major US stock index futures are all up. As of the time of writing, Dow futures are up 0.24%, S&P 500 futures are up 0.24%, and Nasdaq futures are up 0.29%.

1. As of the time of writing, the German DAX index is up 0.21%, the UK FTSE 100 index is up 0.47%, the French CAC40 index is up 0.84%, and the Euro Stoxx 50 index is up 0.38%.

1. As of the time of writing, WTI crude oil is down 1.12%, priced at $62.96 per barrel. Brent crude oil is down 0.98%, priced at $66.83 per barrel.

Market News

Tonight, the US August CPI data faces a major test, and the bond market bets on a significant change in the Federal Reserve's rate cut plans. Tonight, the US August CPI data will be released, and bond traders are preparing for it, which may weaken their bets on a series of significant rate cuts by the Federal Reserve starting this month and continuing until 2026. Weak employment data and moderate producer price data have led traders to believe that a 25 basis point rate cut at the Federal Reserve's meeting on September 16-17 is a done deal, with possibly two more such cuts by the end of the year. However, beyond that, the market's view on the balance of economic risks has changed, with current market positioning leaning towards the belief that officials will ultimately lower rates below what is considered a neutral level, so that policy will stimulate economic growth to avoid recession.

To expedite Stephen Milan's appointment to the Federal Reserve ahead of next week's FOMC meeting, Republicans are accelerating their efforts. The US Senate Banking Committee voted along party lines on Wednesday to support the nomination of Trump's advisor Stephen Milan for a short-term position as a Federal Reserve governor. Meanwhile, Republicans are speeding up their actions to ensure his appointment before next week's meeting. According to informed sources, the vote, which passed with 13 votes in favor and 11 against on Wednesday, means that Milan is expected to receive a confirmation vote from the full Senate on Monday. The Federal Open Market Committee (FOMC) will meet on September 16-17. Given the slowdown in employment growth momentum, the committee is expected to announce its first rate cut since last December. Milan, currently the chairman of the White House Council of Economic Advisers, told senators that he would join the Federal Reserve on an unpaid leave basis.

Rate cut expectations outweigh economic concerns! Surveys show that the US stock market is likely to end the year strongly. According to the latest Markets Pulse survey, the US stock market is expected to shake off the impacts of inflation risks and weak employment prospects, ending the year with upward momentumIn a survey conducted from September 5 to 10, two-thirds of the 116 respondents indicated that the S&P 500 index will continue to rise in 2025, with most expecting that signals of further interest rate cuts by the Federal Reserve before the end of the year will drive the index up. The non-farm payroll data released last week was significantly below expectations, catching traders off guard. This data has cast a shadow over the U.S. economy, prompting bets that the Federal Reserve will cut rates three times this year, starting from September 17. At the same time, the weak data has reignited discussions about the possibility of a further 50 basis point rate cut by the Federal Reserve next week.

Goldman Sachs CEO: U.S. economy is weakening, tariff chaos is dragging down growth. Goldman Sachs CEO David Solomon, along with other bank executives, has warned about the slowdown in the U.S. economy, stating that President Donald Trump's trade war is impacting economic growth prospects. In an interview on Wednesday, Solomon said, "There is no doubt that some recent employment data has shown signs of economic weakness, and this trend needs to be closely monitored." Despite the unexpected decline in wholesale inflation in August, Solomon noted that he still observes signs of persistently high prices. "Trade policy is still in a dynamic process of negotiation and implementation, and there is uncertainty about the ultimate direction," he emphasized, "In my view, this is undoubtedly having a negative impact on economic growth."

Goldman Sachs is "going crazy": The busiest IPO week in four years is coming, and the tech stock IPO feast is restarting. Goldman Sachs CEO David Solomon stated in an interview on Wednesday that the firm expects to see the busiest week for initial public offerings (IPOs) since July 2021. Earlier that day, Swedish "buy now, pay later" loan company Klarna completed its highly anticipated IPO in New York, laying the groundwork for more fintech companies to go public. Solomon emphasized, "This week we will see more IPOs, and Goldman Sachs' IPO activity will exceed any period since July 2021." With the stock market warming up and tech stocks soaring on their debut, investor confidence in new stocks has been restored—this confidence had previously plummeted in April due to the turmoil in global markets caused by the U.S. imposing large tariffs.

Individual Stock News

Rare merger in the retail industry: RaceTrac acquires Potbelly (PBPB.US) for $566 million, at a premium of up to 47%. Convenience store operator RaceTrac agreed on Wednesday to acquire sandwich chain Potbelly for approximately $566 million, a rare cross-industry acquisition in the sector. The family-owned RaceTrac operates convenience stores under the RaceTrac, RaceWay, and Gulf brands. According to a statement, the company will launch a tender offer to acquire all outstanding shares of Potbelly at a price of $17.12 per share. All directors and executives of Potbelly have agreed to sell their shares, which account for about 11% of Potbelly's issued common stock. Following the acquisition announcement, Potbelly's stock price rose 31.32% on Wednesday, closing at $16.98. The transaction price is 47% higher than the company's volume-weighted average price over the past 90 trading daysBarrick Gold (B.US) sells Canadian Hemlo gold mine for $1.09 billion. Barrick Gold will sell the Canadian Hemlo gold mine to Carcetti Capital for up to $1.09 billion. The total proceeds include $875 million in cash consideration, $50 million worth of HMC stock, and a cash payment structure linked to production and tiered gold prices starting in January 2027, with a maximum of $165 million. Barrick President and CEO Mark Bristow stated, "The sale of the Hemlo mine at an attractive valuation marks the end of a long and successful chapter for Barrick at this mine and highlights our rigorous focus on creating value through a premier gold and copper portfolio." The transaction is expected to be completed in the fourth quarter of 2025.

Starbucks (SBUX.US) plans to sell control of its China business, Carlyle leads a consortium in the final bidding war. Five insiders said that the global investment giant Carlyle Group and EQT, along with significant regional players HongShan Capital Group (HSG) and Boyu Capital, are preparing to submit final bids for control of Starbucks' China business. These insiders indicated that the final bids for Starbucks China are expected to be announced in early October, with Starbucks selling control of its China operations. Three of the insiders mentioned that Starbucks has asked them to submit binding bids in early October. One added that an agreement could be reached by the end of next month at the latest.

The US IPO market continues to heat up! Klarna (KLAR.US) surged 43% on its first day of trading. Financial services company Klarna Group (KLAR.US) saw its stock rise as much as 43% on its first day of trading, ultimately closing up 14.55% at $45.82. The stock was priced at $40 per share, above the market pricing range, and received double-digit oversubscription, with about half of potential subscribing investors going home empty-handed. The company and some of its investors raised $1.37 billion through the initial public offering (IPO), indicating that there is still room for growth in the new stock issuance market.

Important Economic Data and Event Forecasts

Beijing time 20:30: US August CPI year-on-year unadjusted (%), US initial jobless claims for the week ending September 6 (10,000).

Beijing time 20:15: European Central Bank announces interest rate decision.

Beijing time 20:45: European Central Bank President Lagarde holds a monetary policy press conference.

Earnings Forecast

Friday morning: Adobe (ADBE.US)