Global Market Reactions to Latest Corporate, Economic, and Political Developments

1

Tesla Inc. reported a fourth consecutive quarter of profit misses. CEO Elon Musk stated that good times are still a way off for the company. The highly anticipated robotaxi product will debut on October 10 but only as a prototype. A low-cost new car that could boost sales might not start production until next year. The planned new factory in Mexico will be paused until after the US presidential election on November 5. Additionally, the humanoid robot Musk claims will elevate Teslas valuation won't be ready soon.

Analysis:

Impact on FX:Negative earnings report could weaken the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:

US Market: Negative impact on Tesla and related automotive stocks.

Companies:Tesla (TSLA)

2

Elon Musk polled his followers on his social media platform X about whether Tesla should invest $5 billion into his AI startup xAI, indicating he is “testing the waters” for a potential deal. This question came after Tesla reported its fourth consecutive quarter of missed profits. On the earnings call, Musk was asked if Tesla might invest in xAI or integrate the Grok chatbot into Tesla software. Musk faces criticism for potential conflicts of interest as he manages six companies.

Analysis:

Impact on FX:Increased speculation could strengthen the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:

US Market: Mixed impact depending on market reception.

Companies:Tesla (TSLA), xAI

3

Google parent Alphabet Inc. reported second-quarter earnings that exceeded analyst expectations, driven by demand for cloud services and search engine advertising. The company stated that Q2 sales (excluding partner payments) were $71.36 billion, compared to the expected $70.7 billion. Net income was $1.89 per share, surpassing the $1.84 per share forecast. Alphabet's CIO Ruth Porat said the company is looking for acquisition targets, with AI competition driving cloud demand.

Analysis:

Impact on FX:Strong earnings could strengthen the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:

US Market: Positive impact on technology and advertising stocks.

Companies:Alphabet Inc. (GOOGL)

4

Vice President Kamala Harris, in her first campaign rally for president, criticized Republican Donald Trump, framing the election as a choice between two distinct economic agendas. In the swing state of Wisconsin, Harris highlighted the choice between “a vision of the future and a vision of the past.” She aims to reintroduce herself to voters and persuade them she can challenge Trump in the November election. Harris emphasized building the middle class as her “defining goal.”

Analysis:

Impact on FX:Increased political stability could strengthen the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:

US Market: Positive impact on market sentiment.

Companies:General Market Indices

5

Indian Prime Minister Narendra Modi‘s new government prioritized unemployed voters in its budget, especially those who voted against him. The budget allocates significant funds to political allies and supports job creation projects. This budget is the clearest acknowledgment yet that India’s political landscape has changed following last month's tough election losses. Finance Minister Nirmala Sitharaman announced a $239 billion investment to create new jobs and enhance youth skills, addressing voters' top concerns.

Analysis:

Impact on FX:Increased government spending could strengthen the INR.

FX Pair:USD/INR, EUR/INR, GBP/INR

Impact on Shares:

Indian Market: Positive impact on consumer and employment sector stocks.

Companies:Reliance Industries (RELIANCE.NS), Tata Consultancy Services (TCS.NS)

6

Singapore's local agricultural development faces setbacks. The nation's local food movement encountered difficulties halfway through, with high costs and government red tape hindering agricultural startups. Karthik Rajan's farm in northern Singapore, supplying spinach, lettuce, and other Asian greens since 2022, became profitable in March but might close by year-end.

Analysis:

Impact on FX:Economic setbacks could weaken the SGD.

FX Pair:USD/SGD, EUR/SGD, GBP/SGD

Impact on Shares:

Singapore Market: Negative impact on agricultural and startup sector stocks.

Companies:Local agricultural companies

7

Typhoon Gaemi struck Manila and headed towards Taipei, prompting the Philippines and Taiwan to close financial markets, schools, and offices on Wednesday. Floodwaters in parts of Manila reached knee-deep, trapping cars and morning commuters. The Philippine Stock Exchange announced on X platform that trading would be suspended, and the central bank stated that currency trading and operations would halt, though fixed income trading would continue.

Analysis:

Impact on FX:Natural disaster response could weaken the PHP and TWD.

FX Pair:USD/PHP, USD/TWD, EUR/PHP

Impact on Shares:

Philippines and Taiwan Markets: Negative impact on financial and public sector stocks.

Companies:General Market Indices

8

Boeing announced the resumption of deliveries of its crucial 737 Max aircraft to Chinese airlines, providing a much-needed boost to the troubled manufacturer and its strained finances. The delivery resumption follows a roughly two-month pause by Chinese aviation regulators, who needed additional information on the batteries used in Boeing's cockpit voice recorders.

Analysis:

Impact on FX:Positive corporate news could strengthen the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:

US Aerospace Market: Positive impact on Boeing and related aerospace stocks.

Companies:Boeing (BA)

9

Citi has upgraded Coinbase's stock rating from neutral to buy due to optimism about the regulatory environment for cryptocurrencies. Citi analyst Peter Christiansen said the digital asset industry, especially Coinbase, could face a more favorable regulatory environment, changing his outlook on the company. As a result, Coinbase Global Inc.'s stock has surged this year, with Citi's upgrade further boosting the trend.

Analysis:

Impact on FX:Positive regulatory sentiment could strengthen the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:

US Cryptocurrency Market: Positive impact on Coinbase and related stocks.

Companies:Coinbase Global Inc. (COIN)

10

A report by Redfin indicates that US home transaction cancellations in June hit a record high due to affordability pressures. Nearly 56,000 home purchase agreements were canceled last month, accounting for about 15% of all signed deals, the highest June cancellation rate since the company began tracking in 2017. High home prices and nearly 7% mortgage rates made buyers hesitant, leading to more price cuts and longer market times for listed homes.

Analysis:

Impact on FX:Housing market struggles could weaken the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:

US Real Estate Market: Negative impact on real estate and financial sector stocks.

Companies:Redfin (RDFN), Zillow (Z)

11

Despite China's rapid adoption of autonomous driving technology, analysts' optimism for Baidu remains tempered. After announcing the launch of a fully autonomous vehicle fleet in Wuhan for ride-hailing, Baidu's stock gains in Hong Kong were nearly erased. Analysts have lowered their average 12-month price target to the lowest ever, noting that the potential of robotaxis is not yet priced into Baidu's stock.

Analysis:

Impact on FX:Limited impact on CNY due to tempered market expectations.

FX Pair:USD/CNY, EUR/CNY, GBP/CNY

Impact on Shares:

Chinese Market: Negative impact on Baidu and related technology stocks.

Companies:Baidu Inc. (BIDU)

12

The US is on track to run one of its largest federal deficits in history, surpassed only by the COVID-19 pandemic, the global financial crisis, and World War II. The massive deficit has fueled election-year finger-pointing, with Republicans blaming Democratic spending and Democrats pointing to Republican tax cuts. According to the Office of Management and Budget's forecast, the deficit for the fiscal year ending September 30 will reach nearly $1.9 trillion, or 6.6% of GDP. The nonpartisan Congressional Budget Office estimates even higher at 6.7%.

Analysis:

Impact on FX:High federal deficit could weaken the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:

US Market: Negative impact on market sentiment and financial sector stocks.

Companies:General Market Indices

13

After years of capital outflows, Malaysia's stock market is regaining global investor interest. This year, international funds have become net buyers as Prime Minister Anwar Ibrahim's policies promote foreign investment in the semiconductor and AI data center sectors. Bloomberg data shows foreign investors sold about $11.5 billion in Malaysian stocks over the past six years. This year, IPOs have surged, raising $723 million. With policies in place, earnings growth is accelerating, attracting more stock investors.

Analysis:

Impact on FX:Increased foreign investment could strengthen the MYR.

FX Pair:USD/MYR, EUR/MYR, GBP/MYR

Impact on Shares:

Malaysian Market: Positive impact on technology and investment sector stocks.

Companies:Tenaga Nasional (5347.KL), Public Bank (1295.KL)

14

Visa Inc. reported quarterly revenue slightly below Wall Street expectations, leading to a decline in after-hours trading. As the world's largest payment network, Visa missing expectations is rare. Visa reported Q3 net income of $8.9 billion, about $60 million or 0.6% below the average analyst estimate. Adjusted net income rose 9% year-over-year to $4.9 billion, with earnings per share at $2.42, slightly below the expected $2.43.

Analysis:

Impact on FX:Missed earnings could weaken the USD.

FX Pair:USD/JPY, EUR/USD, GBP/USD

Impact on Shares:

US Financial Market: Negative impact on payment processing and financial sector stocks.

Companies:Visa Inc. (V)

15

Taiwan's Foxconn (Hon Hai Precision Industry Co., Ltd.) announced plans to invest RMB 1 billion ($137.5 million) to establish a new business headquarters in Zhengzhou, China. Foxconn signed the project contract with the Henan provincial government, planning to develop a project spanning about 700 acres (283 hectares). Foxconn is the world's largest contract electronics manufacturer and Apple's biggest iPhone assembler.

Analysis:

Impact on FX:Increased investment could strengthen the CNY.

FX Pair:USD/CNY, EUR/CNY, GBP/CNY

Impact on Shares:

Chinese Market: Positive impact on technology and manufacturing sector stocks.

Companies:Foxconn (2317.TW), Apple Inc. (AAPL)