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DAILY MARKET REPORTS

  • Today we remember the lives we lost 18 years ago in the September 11, 2001 terrorist attacks.
  • Thousands of people attended a ceremony at the Ground Zero memorial site in lower Manhattan. As with previous anniversaries at the 9/11 Memorial, the names of the nearly 3,000 victims killed in the attacks were read by family and friends.
  • U.S. stocks rose slightly on Wednesday as China’s move to ease trade tensions with the United States soothed investor nerves, while shares of Apple gained a day after the launch of its latest iPhones.
  • Apple rose 1.8% and provided the biggest boost to all three major indexes, a day after it unveiled new iPhones and rolled out a streaming TV service at a price that undercuts Disney and Netflix.
  • Adding to the positive momentum, China’s finance ministry exempted 16 types of U.S. goods from additional retaliatory tariffs, ahead of a planned meeting between trade negotiators.
  • U.S. President Donald Trump on Wednesday renewed his attacks on Fed Chairman Jerome Powell, saying that the central bank should get interest rates down to “ZERO, or less.”
  • GameStop tumbled 11% after reporting a loss for the most-recent quarter and giving a downbeat forecast for the full year.

US FINANCIAL MARKET

GameStop Grapples with Falling Sales as Competition Looms

  • Video game retailer GameStop reported a bigger-than-expected quarterly loss, as the current console cycle neared its end and consumers increasingly shifted to downloading games rather than physically buying them.
  • The videogame retailer on Tuesday reported sales in its fiscal second quarter of $1.29 billion, down 14% compared with a year earlier and less than the $1.34 billion that Wall Street analysts predicted.
  • Comparable-store sales at the company were down almost 12% in the quarter.
  • GameStop reported a 41% fall in new hardware sales for the second quarter, as users preferred to wait for the next generation of Microsoft’s Xbox consoles and Sony’s PlayStation scheduled in 2020.
  • GameStop also said its net loss expanded to $415.3 million, from a loss of $24.9 million last year.
  • GameStop forecast 2019 same-store sales to be down in the low teens, against its previous guidance range of a fall of 5% to 10%.

Apple reveals triple-camera iPhone; $5 monthly streaming TV undercuts Disney

  • Apple caught up with hardware rivals on Tuesday by revealing a triple-camera iPhone, and it rolled out a streaming TV service priced at $5 a month, undercutting Disney and Netflix.
  • The long-awaited Apple TV+ streaming television service will be available in over 100 countries, starting in November.
  • Buyers of an iPhone, iPad or Mac will get a free year of streaming TV, potentially drawing hundreds of millions of viewers to the service.
  • Apple said its new iPhone 11 will come with two back cameras, including an ultra wide-angle lens and the next generation of microchips, the A13. Prices start at $699, down from last year’s new iPhone that started at $749.
  • The more expensive iPhone 11 Pro will have three cameras on the back – wide angle, telephoto and ultra-wide and starts at $999.
  • The iPhone 11 Pro Max with a bigger screen starts at $1,099.
  • Apple also unveiled an updated watch, the Series 5, with an always-on display, starting at $399, while keeping the older Series 3 starting at $199.

Hong Kong Stock Exchange Bids Nearly $37 Billion for London Rival

  • Hong Kong’s stock exchange made an unsolicited $36.6 billion offer to acquire its London-based rival, a deal that would unite two of the world’s major trading hubs when both are under severe political pressure.
  • The Hong Kong exchange said its offer—valued at £29.6 billion in cash and stock—represents a 22.9% premium to the London exchange’s closing stock price on Tuesday.
  • A combination with the London Stock Exchange would create a global leader in capital flows and financial data by connecting developed and emerging markets in the East and West.
  • It would also thwart the LSE’s ambitions to transform itself from an exchange into a full-fledged data business by acquiring financial-information provider Refinitiv Holdings, which used to be part of Reuters, for $14.5 billion in stock.

California Senate passes bill to tighten ‘gig’ worker rule

  • The California State Senate voted on Tuesday to pass a bill that would make it much more difficult for gig economy companies like Uber Technologies and Lyft to classify workers as independent contractors rather than employees.
  • The bill, which was sponsored by California Assemblywoman Lorena Gonzalez and is backed by Governor Gavin Newsom, passed the state senate with 29 votes in favor and 11 votes against it.
  • The bill goes back to the Assembly for a final vote, known as a “concurrence vote” and then it moves on to Gov. Newsom.

GM recalls 3.5 million U.S. vehicles due to braking issue

  • General Motors said Wednesday it was recalling 3.46 million U.S. pickup trucks and SUVs to address a vacuum pump issue that could make braking more difficult and that has been linked to 113 accidents and 13 injuries.
  • The recall covers 2014-2018 model year vehicles, including some Cadillac Escalade, Chevrolet Silverado, Chevrolet Tahoe, GMC Sierra, Chevrolet Suburban and GMC Yukon vehicles.
  • Separately, GM is recalling 270,000 U.S. additional vehicles in three smaller recalls, including 177,000 2018 Chevrolet Malibu cars with 1.5L turbo engines because an error in the engine control software may result in the fuel injectors being disabled.

OPEC cuts 2020 oil demand forecast, urges effort to avert new glut

  • OPEC on Wednesday cut its forecast for growth in world oil demand in 2020 due to an economic slowdown, an outlook the producer group said highlighted the need for ongoing efforts to prevent a new glut of crude.
  • In a monthly report, the Organization of the Petroleum Exporting Countries said oil demand worldwide would expand by 1.08 million barrels per day, 60,000 bpd less than previously estimated, and indicated the market would be in surplus.
  • OPEC, in the report, lowered its forecast for world economic growth in 2020 to 3.1% from 3.2% and said next year’s increase in oil demand would be outpaced by “strong growth” in supply from rival producers such as the United States.
  • Demand for OPEC crude will average 29.40 million bpd in 2020, OPEC said, down 1.2 million bpd from this year.

Peloton sets IPO range between $26 and $29 per share, looks to raise as much as $1.2 billion

  • Peloton seeks to raise as much as $1.16 billion in its initial public offering, the company known for its connected at-home fitness equipment said in a regulatory filing.
  • Peloton plans to price its shares between $26 and $29.
  • The company is offering 40 million shares, which would value Peloton at $8.06 billion at the high end of the range.

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US ECONOMY & POLITICS

U.S. producer prices unexpectedly rise; Fed rate cut still expected

  • U.S. producer prices unexpectedly rose in August and underlying producer inflation rebounded, but the data did not change financial market expectations that the Federal Reserve will cut interest rates again next week to support a slowing economy.
  • The Labor Department said its producer price index for final demand edged up 0.1% last month as a jump in the cost of services offset the largest drop in the price of goods in seven months.
  • In the 12 months through August, the PPI advanced 1.8% after increasing 1.7% in July.
  • Economists had forecast the PPI would be unchanged in August and rise 1.7% on a year-on-year basis.
  • Excluding the volatile food, energy and trade services components, producer prices jumped 0.4% last month after dipping 0.1% in July, the first decline since October 2015.
  • The so-called core PPI climbed 1.9% in the 12 months through August after increasing 1.7% in July.

Trump Says Fed Should Reduce Rates to ‘Zero, or Less’

  • President Trump renewed his call for lower interest rates and his criticism of the Federal Reserve Wednesday, saying on Twitter that the Fed should reduce rates to “ZERO, or less.”
  • He said the U.S. should always be paying the lowest rate and complained that the “naivete” of Chairman Jerome Powell and the Fed means that this was a “once in a lifetime opportunity that we are missing because of ‘Boneheads.’”
  • A Fed spokeswoman declined to comment on the tweets.

American Businesses Say China’s Slowdown Is a Greater Threat Than the Trade War

  • American companies are downshifting in China as its economy slows and trade tensions with the U.S. persist, according to a new survey that highlights softening revenue, reduced investment and job cutbacks.
  • The annual survey, released Wednesday by the American Chamber of Commerce in Shanghai, showed that 51% of the business lobby’s responding members said U.S. and Chinese tariffs had hurt revenue.
  • However, Amcham members pointed to the interrelated issue of China’s economic weakening as the more pressing factor clouding their outlook.
  • More than three quarters of the 333 respondents to this year’s survey said they remained profitable in China last year, but only half forecast revenue growth in 2019, down sharply from 81% in 2018 and similar rates in recent years.

Drug Prices Get Washington’s Attention Ahead of 2020 Election

  • Concern over high drug prices is driving proposals this fall from both Republicans and Democrats on an issue likely to be near the top of the 2020 election agenda.
  • House Speaker Nancy Pelosi is preparing to reveal a bill likely to allow Medicare to negotiate hundreds of drug prices.
  • Senate Finance Committee Chairman Chuck Grassley (R., Iowa), meanwhile, is pushing a bipartisan drug-pricing bill that seeks to lower drug costs in Medicare and Medicaid.
  • President Trump has also promised more initiatives on drug prices, including an executive order linking the amount the U.S. pays for prescriptions to the prices in other nations.
  • The White House has also been in talks with Mrs. Pelosi and Mr. Grassley over their plans.
  • In a 2018 poll by the nonprofit Kaiser Family Foundation, 71% of registered voters said they would be more likely to support a candidate who backs lowering drug costs.

Republican Dan Bishop Wins North Carolina Congressional Seat with Trump’s Support

  • Voters in a conservative congressional district picked President Trump ally Republican Dan Bishop in Tuesday’s special election instead of a Democrat who had promised to seek compromise in Washington.
  • Mr. Bishop, a 55-year-old state senator who campaigned on a promise to be in lockstep with Mr. Trump, defeated Democrat Dan McCready in the Ninth Congressional District based in the suburbs of Charlotte.
  • Mr. Bishop won 51% of the vote to Mr. McCready’s 49%, winning by about 3,900 votes out of 350,000 cast.
  • Voter turnout was 26% in Tuesday’s special election compared with 53% in last year’s midterms.

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EUROPE & WORLD

U.K. Parliament Suspension Is Ruled Unlawful by Scottish Court

  • Boris Johnson ’s decision to suspend Parliament for several weeks has been ruled unlawful by Scotland’s highest civil court, setting the stage for an unusual showdown in the U.K.’s Supreme Court between the government and its opponents.
  • On Wednesday, a panel of judges in Scotland’s highest civil court ruled in favor of a group of 78 lawmakers and others who filed a complaint to block the suspension of Parliament after the move was announced in late August.
  • The ruling will now head to the U.K.’s highest court, with a decision expected Tuesday.
  • While awaiting the Supreme Court’s ruling, Parliament’s suspension until Oct. 14 stands.

China exempts some U.S. goods from retaliatory tariffs as fresh talks loom

  • China announced its first batch of tariff exemptions for 16 types of U.S. products, days ahead of a planned meeting between trade negotiators from the two countries to try and de-escalate their bruising tariff row.
  • The exemptions will apply to U.S. goods including some anti-cancer drugs and lubricants, as well as the animal feed ingredients whey and fish meal, the Ministry of Finance said in a statement on its website on Wednesday.
  • Wednesday’s announcement comes before Chinese trade deputies are expected to meet with their U.S. counterparts in mid-September in Washington.
  • That will be followed by highly-anticipated minister-level meetings in early October in the U.S. capital, involving Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

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TODAY in HISTORY

  • Alexander Hamilton was appointed the first Secretary of the Treasury. (1789)
  • President Franklin Delano Roosevelt dedicated Boulder Dam (now Hoover Dam) in Nevada. (1936)

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