Cryptocurrency bitcoin hit a three-month high in early Asia trading on Monday and the dollar looked set to extend its gains in markets counting down to the U.S. presidential election in two weeks.

 

Election polls show rising odds of former President Donald Trump winning the Nov. 5 election and are boosting the dollar, since his proposed tariff and tax policies are seen as likely to keep U.S. interest rates high and undermine currencies of trading partners.

 

Currency moves in major markets last week were driven by the European Central Bank's dovish rate cut and strong U.S. data that pushed out expectations for how fast U.S. rates can fall, particularly if Trump wins the presidency.

 

The yen was down 0.1% at 149.32 per dollar, staying on the stronger side of 150 per dollar, having breached that level briefly last week for the first time since early August.

 

The dollar index measure against major rivals was at 103.45. It fell 0.3% on Friday as risk appetite picked up broadly across markets after China announced more details of its broad stimulus package, but logged 0.55% gains for the week. The euro stood flat at $1.0866 and sterling was also flat around $1.3045.

 

Bitcoin got a lift from Trump's improving prospects since his administration is seen as taking a softer line on cryptocurrency regulation. It was last up 0.8% at $69,400 BTC=, and has risen 18% since Oct. 10.

 

With no major economic events due this week, market focus will be on corporate earnings and U.S. election risk, and possibly a rise in costs to hedge dollar and other portfolio risks, Chris Weston, head of research at Australian online broker Pepperstone, said in a note.

 

"With just 15 days to go until the U.S. election, traders need to decide if now is the right time to start placing election trades with greater conviction," Weston said.

 

The clearest way to express the Trump tariff risk was to be long dollars versus the euro, Swiss franc and Mexican peso, he said.

 

Brad Bechtel, global head of FX at Jefferies, also noted that rising real interest rates were helping the dollar along, particularly against those three currencies.

 

"We expect this trend to continue straight into the election and if Trump wins, likely well after the election as well," Bechtel wrote.

 

Last week, the yen fell 0.3%, the euro 0.6%, sterling was flat and the dollar index climbed 0.55%. The Mexican peso fell 3%.

 

The euro is down more than 3% in three weeks and has fallen through its 200-day moving average, and is parked near a 2-1/2 month low.

Oil prices steadied in early trading on Monday, following a more than 7% drop last week on worries about demand in China, the world's top oil importer, and an easing of concerns about potential supply disruptions in the Middle East.

 

Brent crude futures rose 8 cents, or 0.11%, to $73.14 a barrel by 0120 GMT. U.S. West Texas Intermediate crude futures gained 10 cents, or 0.14% to $69.32 a barrel.

 

Brent had settled down more than 7% lower last week, while WTI lost around 8%.

 

That marked the contracts' biggest weekly declines since Sept. 2, on slowing economic growth in China and falling risk premiums in the Middle East. U.S. President Joe Biden said on Friday there was an opportunity to "deal with Israel and Iran in a way that ends the conflict for a while".

 

The conflict in the Middle East however intensified over the weekend as Israel on Sunday said it was preparing to attack sites in the Lebanese capital of Beirut linked to Hezbollah's financial operations.

 

China on Monday morning cut benchmark lending rates as anticipated, part of a broader package of stimulus measures to revive the economy.

 

Data on Friday had shown that China's economy grew at the slowest pace since early 2023 in the third quarter, fueling growing concerns about oil demand.

 

On the supply side, last week, U.S. energy firms cut the number of oil and natural gas rigs operating for the fourth time in five weeks, according to a closely watched report by energy services firm Baker Hughes on Friday. The rig count dropped by one to 585.

Gold rose to a fresh high on Monday, extending its blazing rally amid uncertainties surrounding the U.S. election, simmering Middle East tensions and rate cuts by major central banks, while silver scaled a near 12-year peak.

 

Spot gold was up 0.4% at $2,731.79 per ounce, as of 0331 GMT, after hitting an all-time high of $2,732.73 earlier. U.S. gold futures were 0.6% higher at $2,746.80.

 

Helped by bullion's rally, spot silver rose 1.3% to $34.08 per ounce, its highest since late 2012.

 

"The current market environment consists of interest rates moving south combined with heightened geopolitical risks — a scenario which suits gold on both fronts," said Tim Waterer, chief market analyst at KCM Trade.

 

Investors also digested news that China cut its benchmark lending rates following reductions to other policy rates last month as part of a package of stimulus measures to revive the economy.

 

Gold demand in top consumer China has taken a hit amid high prices and an economic slowdown.

 

Elsewhere, traders are pricing in a 99% chance of a U.S. Federal Reserve interest rate cut in November. The European Central Bank cut interest rates by a quarter point last week.

 

Lower rates generally enhance gold's allure, as bullion yields no interest. Gold is also considered a safe investment during times of economic and political turmoil.

 

The 2024 U.S. presidential race between former President Donald Trump and Vice President Kamala Harris is neck and neck in the seven battleground states that will decide the Nov. 5 election.

 

In the Middle East, hundreds of Beirut residents fled their homes late Sunday, with multiple explosions heard, as Israel prepared to attack sites linked to the financial operations of Hezbollah group.

 

For gold, "$2,800 looks to be a viable year-end target... There will be temptation to lock in some profits, which could slow the immediate upside," Waterer said.

 

He, however, said he expected buyers would be waiting on the sidelines for better entry points should any pullback occur.

 

Platinum rose 0.7% to $1,020.95 per ounce, its highest since mid-July. Palladium gained 0.8% to $1,087.87.

European markets were mixed on Monday as investors awaited key corporate earnings and monitored elevated Middle East tensions.

 

The pan-European Stoxx 600 traded flat at around 9:30 a.m. London time, with sectors and major bourses pointing in opposite directions. Oil and gas stocks led the gains, up 1.1%, while insurance stocks dipped 0.5%.

 

Regional markets had ended last week on a high note after the European Central Bank announced its third interest rate cut of the year. The ECB on Thursday lowered the deposit rate by another 25 basis points as inflation risks in the European Union are seen to be easing faster than anticipated.

 

German software company SAP will report its highly anticipated third-quarter earnings on Monday evening. The results come shortly after a report from the Dutch semiconductor firm ASML last week triggered a rout in tech market stocks.

 

Elsewhere, Asia-Pacific markets were mixed on Monday as traders assessed China's loan prime rate announcement, with focus also on Japan's general election at the end of the week.

 

Stateside, stock futures ticked higher after the Dow Jones Industrial Average and S&P 500 notched their best weekly win streaks of 2024.

 

Shares of Danish shipping group Moller-Maersk rose 3% on Monday morning.

 

It comes shortly after the company said it had stopped all booking acceptance to and from crisis-stricken Haiti "effective immediately" in light of the ongoing political situation.

— Sam Meredith

 

Dutch coffee and tea group JDE Peet's rose to the top of the European benchmark on Monday morning.

 

Shares of JDE Peet's jumped 14% after the company announced the appointment of Rafael Oliveira as its chief executive officer and investment holding company JAB said it would acquire Mondelez's 86 million shares in the firm.

 

Meanwhile, Swiss inspection services firm SGS fell 2.6% after RBC cut its target price for the stock, Reuters reported.

— Sam Meredith

 

European markets opened slightly lower on Monday.

 

The pan-European Stoxx 600 traded down 0.1% shortly after the opening bell, with most sectors in negative territory.

— Sam Meredith

 

The fundamental backdrop is "quite good" for gold prices at the moment, according to one analyst, with the yellow metal thought to be on track to hit $3,000 per ounce over the coming months.

 

Spot gold prices traded 0.3% higher at $2,727.26 per ounce at around 7:50 a.m. London time, paring gains after hitting a fresh all-time high of $2,732.73 earlier in the session.

 

Asking prices for British homes rose only marginally in October as more properties came onto the market, according a survey on Monday that also suggested some buyers were waiting for clarity on tax changes in the new government's upcoming budget.

 

Asking prices rose by just 0.3% in October, well below their average for a 1.3% monthly increase for the month, property website Rightmove said.

 

The number of homes available for sale was 12% higher than the same time period last year, and was the highest per real estate agent since 2014.

 

Overall activity in the property market remained strong, with buyer demand rising.

 

Prices were 1.0% higher than a year earlier.

— Reuters

 

China's stimulus measures need to tackle structural problems in its crisis-hit property sector to restore confidence in the world's second-largest economy, according to one strategist.

 

It comes as optimism over a raft of economic measures implemented by Beijing since late September appears to have faded in recent days.

 

"I think the fundamental point is, for all of the measures that have been taken, I think where the disappointment at least for an observer comes in is measures for the property market," Daniel Morris, chief market strategist at BNP Paribas Asset Management, told CNBC's "Squawk Box Europe" on Monday.

 

"The fundamental issue, or one of many fundamental issues, is that you can cut interest rates, but people aren't necessarily going to react if confidence isn't there [and] confidence isn't there because of weakness in the property market," Morris said.

 

"And so, you need to start with that fundamental issue before you get the chain effect that you want," he added.

— Sam Meredith

 

European markets are expected to open in mixed territory Monday.

 

The U.K.'s FTSE 100 index is expected to open 17 points higher at 8,373, Germany's DAX down 12 points at 19,644, France's CAC up 1 point at 7,611 and Italy's FTSE MIB up 55 points at 35,087, according to data from IG.

 

Bitcoin surged to its highest level in three months after election polls showed higher odds of winning for Republican presidential nominee Donald Trump.

 

The cryptocurrency surged to a high of $69,487 on Monday, its highest level since July.

 

Wall Street analysts have raised their bets on three stocks ahead of their quarterly earnings reports over the past week.

 

One of the stocks, a Big Tech AI firm, has rallied 64% this year, with analysts predicting more momentum ahead.

 

As investors attempt to navigate volatile global markets, Morgan Stanley is reiterating its recommendation to buy dividend stocks.

 

Investors are increasingly turning to exchange-traded funds (ETFs) that focus on companies revitalizing or boosting production within the U.S., leveraging governmental incentives.

 

This year alone, around $2.25 billion has been invested in a select group of ETFs spotlighting the 'reshoring' concept, pushing their total assets to a record $9.67 billion by the end of August.

 

"Companies cite reshoring as a significant long-term growth factor. Our objective is to identify the frontrunners or enablers of this trend before it becomes mainstream," remarked Chris Semenuk, head of the actively managed Tema American Reshoring ETF (RSHO.P), launched last year.

 

The assets under RSHO.P have soared from $6 million in May 2023 to $101.5 million by the end of August. The fund has seen a nearly 16% year-to-date increase, compared to the S&P 500's 17.7% gain.

 

Many manufacturers are relocating production to the U.S. to mitigate supply chain issues and sidestep tensions between Washington and Beijing, which are curbing investments in China.

 

In late 2021, Congress authorized over $1 trillion for new infrastructure projects, followed by a bill that allocates another $200 billion for chip manufacturing the subsequent summer.

 

A few significant corporate moves have spurred further interest, such as Taiwan Semiconductor Manufacturing Co's (TSMC) decision to amplify its investment in new Arizona plants to $65 billion, and the federal government's $500 million grant to Century Aluminum (CENX.O) to establish the first aluminum smelter in the U.S. in 45 years.

 

BlackRock is the latest major ETF provider vying for investor funds, as the reshoring theme gains traction due to its prominent role in the U.S. presidential race's focus on economic growth and job creation. BlackRock launched the iShares U.S. Manufacturing ETF (MADE.P) in July.

 

"These stocks could benefit regardless of the election outcome," stated Jay Jacobs, head of thematic and active ETFs at BlackRock, during the latest episode of "Inside ETFs." "It’s an uncommon area of bipartisan agreement."

 

The shares of the ETF have ascended 3.5% over the past 30 days, in comparison with the S&P 500's approximately 0.9% gain, according to LSEG. The new BlackRock fund currently holds nearly $6 million in assets.

 

Prominent performers in the U.S. manufacturing sector include Caterpillar (CAT.N) and Eaton Corp. (ETN.N), which have risen 16.4% and 27.6% year-to-date, respectively. The S&P 500 industrials sector, which includes many companies held by these ETFs, has increased 13.5% this year.

 

Nonetheless, recent weaker-than-expected economic data, including a drop in U.S. manufacturing construction spending, has sparked concerns that U.S. economic growth may be slowing. The Federal Reserve is anticipated to cut interest rates for the first time in years during its September 17-18 meeting to ease monetary policy ahead of any potential slowdown.

 

Simultaneously, some stocks have become more expensive as the broader market has rallied. For instance, the industrial sector is trading at a forward price-to-earnings ratio of 26.7, compared to 19.2 a year ago.

 

"Attractively priced opportunities are sparse; the valuations we saw in early 2020 are no longer present," noted Jeff Muhlenkamp, manager of the $249 million Muhlenkamp Fund, a mutual fund.

 

He also cautioned that reshoring does not guarantee superior returns, pointing out that companies bringing manufacturing back to the U.S. might face higher labor and raw material costs.

 

Whether this will impact the robust growth these funds have seen this year remains uncertain. According to Morningstar, the $1.5 billion First Trust RBA American Industrial Renaissance ETF (AIRR.O), which debuted in 2014, has tripled its assets over the last 12 months. Similarly, the $8.04 billion Global X U.S. Infrastructure Development ETF (PAVE.Z), launched in 2017, has grown by 50% over the same period.

 

The Federal Reserve is in focus next week, as uncertainty swirls over how much the U.S. central bank will cut interest rates at its monetary policy meeting and the pace at which it will reduce borrowing costs in coming months.

 

The S&P 500 index (.SPX), opens new tab is just one percent shy of its July record high despite weeks of market swings sparked by worries over the economy and seesawing bets on the size of the cut at the Fed's September 17-18 meeting.

 

After fluctuating sharply throughout the week, Fed funds futures on Friday showed traders pricing an almost equal chance of a 25 basis point cut and a 50 basis point reduction, according to CME Fedwatch. The shifting bets reflect one of the key questions facing markets today: whether the Fed will head off weakening in the labor market with aggressive cuts, rather than take a slower wait-and-see approach.

 

"The market wants to see the Fed portray a level of confidence that growth is slowing but not falling off a cliff," said Anthony Saglimbene, chief market strategist at Ameriprise Financial. "They want to see ... that there's still this ability to gradually normalize monetary policy."

 

Investors will focus on the Fed's fresh economic projections and interest rate outlook. Markets are pricing in one hundred fifteen basis points of cuts by the end of 2024, according to LSEG data late on Friday. The Fed's June forecast, by comparison, penciled in one 25-basis point cut for the year.

 

Walter Todd, chief investment officer at Greenwood Capital, said the central bank should opt for fifty basis points on Wednesday. He pointed to the gap between the 2-year Treasury yield, last around 3.6 percent, and the Fed funds rate of 5.25%-5.5%.

 

That gap is "a signal that the Fed is really tight relative to where the market is," Todd said. "They are late in starting this cutting cycle and they need to catch up."

 

Aggressive rate cut bets have helped fuel a Treasury rally, with the 10-year yield down some eighty basis points since the start of July to around 3.65 percent, near its lowest level since June 2023.

 

But if the Fed continues to project significantly less easing than the market does for this year, bonds will have to reprice, pushing yields higher, said Mike Mullaney, director of global markets research at Boston Partners.

 

Rising yields could pressure stock valuations, Mullaney said, which are already high relative to history. The S&P 500 (.SPX), opens new tab was last trading at a forward price-to-earnings ratio of twenty-one times expected 12-month earnings, compared to its long-term average of 15.7, according to LSEG Datastream.

 

"I find it implausible that you're going to get P/E multiple expansion between now and year-end in a rising (yield) environment," Mullaney said.

 

With the S&P 500 up about eighteen percent so far this year, it may not take much to disappoint investors with next week's Fed meeting.

 

Focus has turned to the employment market as inflation has moderated, with job growth coming in less robust than expected in the past two monthly reports.

 

The unemployment rate jumped to 4.2 percent in August, one month after the Fed projected it reaching that level only in 2025, said Oscar Munoz, chief US macro strategist at TD Securities. That indicates the central bank may need to show it will move aggressively to bring down rates to their "neutral" level, he added.

 

"If the (forecast) disappoints, meaning they turn more conservative and they don't ease as much ... I think the market might not take it well," Munoz said.

U.S. consumer sentiment increased to a four-month peak in September amid expectations that inflation will continue to moderate over the next year and household incomes will improve, though views on the labor market weakened against the backdrop of slower job gains.

 

The improving inflation outlook was supported by other data on Friday showing import prices dropped by the most in eight months in August, driven by a widespread decline in the costs of goods. Government data this week showed mild increases in producer and consumer prices in August.

 

Decreasing price pressures provide the Federal Reserve ample room to focus on the labor market, which has notably slowed from last year's robust job growth. The U.S. central bank is expected to begin its long-anticipated policy easing cycle next Wednesday, with a 25-basis-point interest rate cut almost guaranteed.

 

"Our assumption is that expectations of lower interest rates as well as slowing inflation results are making people feel more optimistic about the economic outlook," said Carl Weinberg, chief economist at High Frequency Economics.

 

The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 69.0 this month, the highest level since May, compared to a final reading of 67.9 in August. Economists surveyed by Reuters had forecast a preliminary reading of 68.5.

 

Sentiment improved due to better buying conditions for long-lasting manufactured goods as consumers perceived prices to be favorable. Consumers' expectations for personal finances and the economy over the next 12 months also brightened, though their views of the labor market softened.

 

The share of consumers expecting the unemployment rate to rise over the next year increased to a 16-month peak of 39% from 37% in August. The rise in sentiment was on party lines.

 

"An increasing share of both Republicans and Democrats now anticipate a Harris win," said Surveys of Consumers Director Joanne Hsu. "Consistent with their divergent views of the implications of a Harris presidency for the economy, partisan gaps in sentiment slightly increased."

 

The survey was conducted before Tuesday's debate where Republican candidate Donald Trump went head-to-head against Vice President Kamala Harris, the Democratic Party's nominee for the November 5 election.

 

The survey's reading of one-year inflation expectations fell for the fourth consecutive month to 2.7%, the lowest level since December 2020, from 2.8% in August. Its five-year inflation outlook slightly rose to 3.1% from 3.0% in the prior month.

 

The elevated long-term inflation expectations, labor market stability, and still-strong core inflation readings argue against financial market hopes for a half-percentage-point reduction.

 

Financial markets saw a roughly 43% chance of a 50 basis points rate cut at the Fed's September 17-18 policy meeting, up from approximately 15% following the inflation data this week, CME Group's FedWatch Tool showed. The odds of a 25 basis point rate reduction are around 57%, down from 87% during the week.

 

Stocks on Wall Street were trading higher after former New York Fed President Bill Dudley said there was "a strong case" for a half-point rate reduction. The dollar weakened against a basket of currencies. U.S. Treasury yields declined.

September had a bumpy start for investors as volatility jolted markets in the first week, but dividend-paying stocks can help smooth the ride.

 

Investors with a long-term investment horizon can ignore short-term noise to focus on stocks that have the potential to enhance their total portfolio returns through a mix of dividends and share price appreciation.

 

To that end, the recommendations of top Wall Street analysts can help investors choose stocks with strong fundamentals and the ability to pay consistent dividends.

 

Here are three dividend stocks, highlighted by Wall Street's top pros on TipRanks, a platform that ranks analysts based on their past performance.

 

We start this week with MPLX (MPLX), a midstream energy player. The company's quarterly cash distribution was 85 cents per common unit ($3.40 on an annualized basis) for the second quarter of 2024. MPLX offers an attractive yield of nearly 8%.

 

Recently, RBC Capital analyst Elvira Scotto reiterated a buy rating on MPLX stock with a price target of $47. The analyst updated her model to reflect the company's solid second-quarter results, with adjusted earnings before interest, taxes, depreciation and amortization surpassing the Street's estimate by 3%.

 

Scotto raised her adjusted EBITDA estimates for 2024 and 2025 to reflect the strong performance of the Logistics & Storage segment in Q2 and some consolidation of joint venture interests. The analyst maintained her distribution per unit estimate of $3.57 for 2024 and $3.84 for 2025.

 

Scotto continues to view MPLX as "one of the most attractive income plays among large-cap MLP [master limited partnership]," thanks to its robust yield and rising free cash flow generation. The analyst thinks that MPLX's solid free cash flow will help the company to continue to grow its business and enhance shareholder returns through buybacks.

 

The analyst also highlighted that MPLX is expanding its natural gas and natural gas liquids assets across its integrated network via organic projects, joint venture interests and bolt-on acquisitions.

 

Scotto ranks No. 18 among more than 9,000 analysts tracked by TipRanks. Her ratings have been profitable 69% of the time, delivering an average return of 20.8%. 

 

We move to another dividend-paying energy stock, Chord Energy (CHRD). It is an independent oil and gas company operating in the Williston Basin. The company recently paid a base dividend of $1.25 per share of common stock and a variable dividend of $1.27 per share.

 

On Sept. 4, RBC Capital analyst Scott Hanold reaffirmed a buy rating on CHRD stock with a price target of $200. The analyst increased his earnings per share and cash flow per share estimates for 2024 and 2025 by nearly 3% to reflect modestly higher production and lower cash operating costs.

 

Hanold expects free cash flow of $1.2 billion and $1.4 billion in 2024 and 2025, respectively. The analyst anticipates that FCF will increase in the second half of 2024 due to the combination of the assets of Chord Energy and Enerplus, which the company acquired earlier this year.

 

Commenting on the Enerplus integration, the analyst said, "We remain optimistic the company is well-positioned to not just meet but potentially exceed the synergy target as operations are fully integrated."

 

Further, the analyst expects quarterly distribution of $4.50 to $5.00 per share in the second half of 2024, with dividends accounting for about 60% of the distributions and buybacks amounting to 40%.

 

Hanold ranks No. 27 among more than 9,000 analysts tracked by TipRanks. His ratings have been successful 63% of the time, delivering an average return of 25.4%. 

 

This week's third pick is fast-food chain McDonald's (MCD). MCD stock offers a dividend yield of 2.3%. McDonald's is a dividend aristocrat that has raised its dividends for 47 consecutive years.

 

On Sept. 3, Tigress Financial analyst Ivan Feinseth reiterated a buy rating on MCD stock and raised his price target to $360 from $355. Despite a challenging backdrop, the analyst continues to be bullish on McDonald's due to its ongoing technology initiatives, innovation and value focus. These factors support its resilient business model and long-term growth potential.

 

Feinseth noted that the company is focused on enhancing its value offerings to regain its competitive edge. The analyst highlighted several recent value deals introduced by McDonald's, including the $5 meal deal, which helped improve its image as a fast-food chain offering value and affordability.

 

Further, Feinseth pointed out MCD's competitive advantage, which is backed by its solid brand equity, loyalty program and digital initiatives. The company boasts a loyalty membership base of 166 million members. It is targeting 250 million active loyalty members by 2027.

 

The analyst also noted that McDonald's is making capital investments between $2 billion and $2.5 billion annually to expand its store footprint and improve its technology, including through enhancing its ordering capabilities through automated voice artificial intelligence. Overall, Feinseth is confident about MCD's long-term growth potential and its ability to boost shareholder returns through dividends and share repurchases. In fact, he expects MCD to announce a dividend hike in October, similar to the 10% rise announced last year.

 

Feinseth ranks No. 210 among more than 9,000 analysts tracked by TipRanks. His ratings have been profitable 60% of the time, delivering an average return of 11.9%. 

The stock market is experiencing another bout of volatility.

 

US indexes fell on Wednesday, with the Dow dropping by as much as 600 points in the early morning as traders processed mixed inflation data.

 

The consumer price index for August indicated that prices increased by 2.5% annually, according to the Bureau of Labor Statistics. This marks the lowest headline inflation rate since early 2021. However, core inflation, which excludes the volatile food and energy sectors, exceeded expectations by rising 0.3% for the month, compared to the projected 0.2% increase.

 

Investors are concerned about this unexpected rise in core inflation, as it suggests that inflation remains persistent enough to likely prevent a 50 basis-point rate cut at the Federal Reserve's next policy meeting, which some investors had been hoping for.

 

Following the CPI report, the market now sees an 83% chance that the Fed will opt for a 25 basis-point rate cut next week, an increase from the 56% odds a week ago, as indicated by the CME FedWatch tool.

 

"Another month, another slightly awkward data point," Julian Howard, the chief multi-asset investment strategist at GAM Investments, noted in a statement, adding that core and services inflation appeared "firmly unvanquished" in the latest figures.

 

"However, it does seem at least that a full 0.5% cut just became a little less convincing. Apart from anything else, the Fed's dual mandate means that it can't build its case for an aggressive or any cut solely around a weakening labor market," he added.

 

Although markets are disappointed about the reduced likelihood of a larger cut, a 50 basis-point move by the Fed would be a double-edged sword. Cutting rates by 50 basis points could have signaled to markets that the Fed is worried about a significant economic slowdown, analysts have noted in recent weeks. Conversely, a smaller 25 basis-point cut implies prolonged higher interest rates.

 

Investors are paying close attention to the job market for additional signs of weakness. Jobless claims on Thursday will be the next labor market indicator ahead of the Fed meeting next week.

 

"The job market will continue to be an influence," Gina Bolvin, president of Bolvin Wealth Management Group, said in a statement. "Today's inflation data solidified a 25 basis-point cut for next week; 50 basis points is off the table," she added.

 

Housing costs were a major factor in driving inflation higher, with the Labor Department noting that shelter inflation rose by another 0.5% in August.

 

Shelter costs may soon decline, as market rent growth is estimated to be around 2% year-over-year, according to Preston Caldwell, a US economist at Morningstar.

 

"As long as this remains in place, housing inflation will inevitably have to fall," he stated in a note.

 

Even after adjusting their expectations, markets still anticipate moderate rate cuts from the Fed by the end of the year. Investors are pricing in an 84% chance that the Fed will cut rates by 100 basis points or more by December, though future rate cuts will depend on jobs and inflation data.

 

"If the economy continues to slow—without plunging into a sudden recession—the Fed will be able to cut rates at a steady 25 basis points per meeting pace," Chris Zacarelli, chief investment officer of Independent Advisor Alliance, noted in a statement.

 

"Given the current situation, with the Fed cutting rates, unemployment near multi-decade lows, and an expanding (though slowing) economy, the market should be able to achieve all-time highs again, once we navigate through the volatility that usually comes before most presidential elections," he added.

Seven & i Holdings has turned down a takeover bid from Canadian convenience store operator Alimentation Couche-Tard, citing that the offer is "not in the best interest" of its shareholders and stakeholders.

 

According to a filing with the Tokyo Stock Exchange, the owner of 7-Eleven disclosed that Couche-Tard had proposed to buy all outstanding shares of Seven & i for $14.86 per share, which would value Seven & i at $38.55 billion based on LSEG data.

 

Stephen Dacus, chairman of the special committee formed by Seven & i to review Couche-Tard's proposal, described the proposal as "opportunistically timed and significantly undervalues our standalone strategy and the additional actionable paths we see to enhance shareholder value in the near to medium term."

 

In April, Seven & i announced a restructuring plan focused on expanding 7-Eleven's global footprint while divesting underperforming supermarket operations.

 

Dacus noted that even if Couche-Tard significantly raised its bid, the proposal fails to consider the "numerous and significant challenges" the acquisition would face from U.S. antitrust agencies.

 

"Beyond your simple claim that you do not believe a merger would negatively affect the competitive landscape and that you would 'consider' potential divestitures, you have provided no details on the extent of divestitures required or how they would be implemented," he wrote in a letter seemingly addressed to ACT Chair Alain Bouchard, which was included in the Tokyo Stock Exchange filing.

 

He also highlighted that the Couche-Tard proposal did not specify any timeline for overcoming regulatory obstacles or indicate if the company was "prepared to take all necessary actions for regulatory clearance, including litigation with the government."

 

Dacus affirmed that Seven & i is open to sincerely considering proposals that benefit its stakeholders and shareholders but will resist ones that "strip our shareholders of the company's intrinsic value or fail to address significant regulatory concerns."

 

Ben Herrick, associate portfolio manager at Artisan Partners, told CNBC's "Squawk Box Asia" shortly before the response was filed on Friday that the Couche-Tard offer "highlights that the current management team and the board have not fully utilized their potential to elevate the corporate value of this organization."

 

Artisan Partners, a U.S. fund holding just over a 1% stake in Seven & i, reportedly had urged Seven & i Holdings in August to "seriously consider" the buyout offer and solicit bids for the company's Japanese subsidiaries "as soon as possible."

 

Herrick elaborated that Artisan believes capital allocation abroad has been neglected and that Seven & i should consider the offer.

 

He mentioned that the Japanese convenience store segment of Seven & i needs little adjustment but identified a "huge opportunity" in international licensees operating outside the United States.

 

"You have over 50,000 stores generating about $100 million or just over $100 million in operating profit for the company, which indicates a significant discrepancy," he noted.

 

Herrick also believes that due to insufficient oversight and accounting, Seven & i has been slow to implement changes.

 

"The company needs to accelerate its plan implementation. [Seven and i President Ryuichi] Isaka introduced a 100-day plan to reform [general merchandise store] Ito-Yokado in 2016, and nearly 3,000 days later, progress is slow. A faster pace is needed," he asserted.

 

Conversely, Richard Kaye, portfolio manager at independent asset management group Comgest, expressed a different view in an interview on CNBC's "Squawk Box Asia" on Monday: "I don’t think a radical reform from a foreign acquirer is necessary."

 

He added that the company excels in logistics and product innovation and "it’s hard to imagine that it could be done significantly better."

Gold prices were trading below record peak levels on Wednesday following a surge driven by Western fund inflows and U.S. rate-cut expectations, as investors awaited the minutes of the Federal Reserve's latest meeting for clarity on the extent of cuts.

 

Spot gold was up 0.1% at $2,517.38 per ounce, as of 0238 GMT, after reaching an all-time high of $2,531.60 on Tuesday. U.S. gold futures rose 0.2% to $2,555.20.

 

Gold has increased by approximately $460, or 22%, so far this year, with geopolitical tensions and uncertainty surrounding the upcoming U.S. Presidential elections and potential rate cuts expected to drive the precious metal to even higher levels.

 

"Gold's impressive rally reflects markets anticipating substantial Fed cuts," said OCBC FX strategist Christopher Wong.

 

Traders have fully priced in a rate cut at the Fed's September meeting, with a 68% probability of a 25 basis points cut, according to the CME FedWatch tool.

 

The dollar dropped to its lowest level this year against the euro, while benchmark 10-year Treasury yields also fell, making non-yielding bullion more attractive for holders of other currencies.

 

Traders now anticipate the minutes from the Fed's July policy meeting, expected later today, and Fed Chair Jerome Powell's speech on the U.S. economic outlook this Friday at Jackson Hole.

 

"Given that markets have already anticipated significant cuts to some degree, Powell faces high expectations to exceed dovish market expectations. A minor reality check might be enough to trigger a short-term gold price pullback," Wong added.

 

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, reported a 0.20% decrease in its holdings on Tuesday from seven-month highs.

 

Spot silver rose 0.4% to $29.52 per ounce, platinum climbed 0.5% to $953.35, and palladium increased by 0.4% to $929.27.

 

China's latest export controls have unsettled insiders of the critical minerals industry, and some are concerned that Beijing will exploit its global supply chain dominance in unforeseen ways.

 

China's Ministry of Commerce announced Thursday that export controls on antimony would take effect Sept. 15. Antimony is used in bullets, nuclear weapons production, and lead-acid batteries. It can also strengthen other metals.

 

"Three months ago, there's no way [any] one would have thought they would have done this. It's quite confrontational in that regard," Lewis Black, CEO of Canada-based Almonty Industries, said in a phone interview. The company has said it's investing at least $125 million to reopen a tungsten mine in South Korea later this year.

 

Tungsten is nearly as hard as a diamond and is used in weapons, semiconductors, and industrial cutting machines. Both tungsten and antimony are on the U.S. critical minerals list, and less than 10 elements away from each other on the periodic table.

 

"My sector is now thinking this is getting much closer to home than graphite," Black said, referring to China's previous export controls. Last year, Beijing, the world's largest graphite producer, said it would enforce export permits for the crucial battery material amid scrutiny from foreign countries worried about its dominance.

 

"I can't explain this move, and I think that's what unsettled a lot of people in this sector, my customers, and they don't have a plan B, which China is very aware of. There hasn't been one for 30 years," he said.

 

"There's always been an equilibrium ... they were never weaponized because they could create this snowball of escalation," he said.

 

China accounted for 48% of global antimony mine production in 2023, while the U.S. did not mine any marketable antimony, according to the U.S. Geological Survey's latest annual report. The U.S. has not commercially mined tungsten since 2015, and China dominates global tungsten supply, the report said.

 

"I think it's the start of some export restrictions in a number of rare earths, minerals," Tony Adcock, executive chair of Tungsten Metals Group, said in a phone interview. He said he found it hard to believe that China would just restrict antimony.

 

“The way that the [Chinese Commerce Ministry] statement was written, we've extrapolated that to tungsten and other rare earths. It may not happen," Adcock said, noting that "tungsten is probably of the highest economic importance."

 

China's Ministry of Commerce did not respond to a request for comment.

 

The U.S. has sought to restrict China's access to high-end semiconductors, following which Beijing announced export controls on germanium and gallium, two metals used in chipmaking.

 

While tungsten is also used to make semiconductors, the metal, like antimony, is used in defense production.

 

"China has a declining tungsten production, but tungsten is absolutely vital, far more than antimony, in military applications," said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company.

 

He expects China will put export controls on tungsten by the end of the year, if not in the next month or two.

 

"During a situation where there's a bit of a race to secure metals in case there is some sort of flare-up in tensions, frankly we talk about the South China Sea or Taiwan, you want to have as much tungsten as you can," Ecclestone said. "But you also want people on the other side to have as least tungsten as you can engineer."

 

The U.S. is already keen to reduce its reliance on China for tungsten.

 

Starting in 2026, the U.S. REEShore Act prohibits the use of Chinese tungsten in military equipment. That refers to the Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022.

 

The House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party in June announced a new working group on the U.S. critical minerals policy.

 

Ecclestone said that last week, the niche market of antimony trading noticed that the U.S. price for buying the metal from Rotterdam was exponentially higher than the price for delivery out of Shanghai. That's after antimony prices kept rising even after pandemic-related shipping disruptions ended, he said.

 

"There's a suspicion that the Pentagon has been re-stuffing its reserves of certain metals, and most notably antimony because it needs antimony for munitions," said Ecclestone, who founded the mining strategy firm in 2003.

 

The U.S. Department of Defense did not immediately respond to a request for comment.

 

China is acting more in retaliation "against what it views as an intrusion into its national interests," Markus Herrmann Chen, co-founder and managing director of the China Macro Group, said in an email.

 

He pointed out that China's Third Plenum meeting of policymakers in July "put forward a completely new policy goal of better coordinating the entire minerals value chain, likely reflecting the further heightened supply importance of 'strategic mineral resources' for both business and geoeconomic interests."

 

As China seeks to ensure its national security, companies in the U.S. and elsewhere are looking to tap a nascent opportunity.

 

"Energy Fuels has been the largest supplier of uranium oxide to the U.S. for several years supporting domestic nuclear energy production," Mark Chalmers, president and CEO of Colorado-based Energy Fuels, said in a statement. He said the company is creating a U.S. rare earths product line.

 

"We recognized that our 40-year expertise working in naturally radioactive materials gives us a competitive advantage to duplicate China's success separating multiple [rare earth elements] from low-cost and plentiful monazite," Chalmers said, referring to a mineral from which the desired metals can be extracted.

 

It remains unclear whether China will follow through with a blanket implementation of the latest export controls.

 

"They don't want to acknowledge that this could escalate," Black said. "But I don't think China wants this to escalate either. The last thing you want to create is another boogeyman [at] the beginning of a U.S. election. Let's see in a week whether this is really a policy or not."