Ten Stories Moving the Market

Applied Materials forecast $10.3 billion in fiscal fourth-quarter revenue compared to Wall Street’s expectation for $9.62 billion; Chief Executive Officer Gary Dickerson said customers are asking the company to increase its output so that they can get machinery more quickly – Bloomberg. (Why you should care – the comments point to the resilient demand strength for AI infrastructure components)

Chicago Federal Reserve Bank President Austan Goolsbee on Thursday said the latest U.S. inflation data ​has been a "little better," and he is hopeful that as ‌the effects of tariffs and higher oil prices from the Iran war fade, inflation can continue to improve – Reuters. (Why you should care – while Goolsbee is not a voter this year, the comments are slightly more dovish than those he made a few days ago)

OpenAI is on track to generate annualized revenue of more than $40 billion based on its current performance; The ChatGPT maker’s revenue has accelerated in recent months, driven in part by the growth of its AI coding software – Bloomberg. (Why you should care – the current revenue run rate has doubled since the end of last year)

Anthropic investors expect the AI start-up to float at a valuation of $2 trillion or more in October, a dizzying figure that would eclipse SpaceX and make the AI lab’s debut the largest ever initial public offering – FT. (Why you should care – annualized revenue is expected to hit a run rate of as much as $120 billion by the end of 2026, up almost 10-fold over the course of the year)

Private equity firm Silver ‌Lake is in talks to acquire Workday in a deal that would rank among the largest software buyouts in history; Silver Lake and the human-resources and financial management software company are said to have held discussions about a ​potential deal in recent months – Reuters. (Why you should care – a private-equity takeout would likely support higher software sector valuations)

The Securities and Exchange Commission canceled a Friday meeting where the agency was expected to unveil new plans for digital assets as landmark crypto legislation remains stalled in Congress – Bloomberg. (Why you should care – a procedural vote in the Senate on the Clarity Act has been set up for late September)

Cleveland Federal Reserve Bank President Beth Hammack reiterated her view that the ‌U.S. central bank should raise rates immediately to bring down too-high inflation and restrain business growth and investment – Reuters. (Why you should care – Hammack is the biggest hawk on the rate-setting FOMC, repeatedly calling for rate hikes)

Europe is having a difficult time building enough natural gas reserves for heating and energy supply ahead of the winter; worries about near-term shortages have repeatedly pushed summer gas prices above those of winter contracts, eroding the incentive for traders to store fuel – Bloomberg. (Why you should care – a resolution to the Iran conflict would likely lead to an inventory boost)

U.S. producer prices were unchanged in July as goods prices fell and the cost of services increased marginally; the PPI increased 4.7% in the 12 months ending in July after advancing 5.5% in June – Reuters. (Why you should care – this data coupled with CPI earlier this week supports the Fed leaving interest rates unchanged at the September FOMC meeting)

Hedge fund investors are starting to return to carry trades funded by the yen, according to JPMorgan Private Bank and State Street Bank & Trust; investors can borrow the low-yielding yen and use the money to buy higher-yielding assets – Bloomberg. (Why you should care – the yen carry trade has been a popular vehicle in the past for borrowing to invest in stocks)

Economic Calendar:

Switzerland – GDP for Q2 (3 a.m.)

Eurozone – GDP for Q2 (5 a.m.)

Eurozone – Exports, Imports for June (5 a.m.)

U.S. – Retail Sales for July (8:30 a.m.)

U.S. – Business Inventories for June (10 a.m.)

U.S. – University of Michigan Consumer Sentiment (Preliminary) for August (10 a.m.)

U.S. - Baker Hughes Rig Count (1 p.m.)

U.S. - CFTC’s Commitment of Traders Report (3:30 p.m.)

Fed Releases Balance Sheet Updates on Commercial Banks (4:15 p.m.)