Big money week

There’s still one day left, but the first four days of this week have been fat for Wall Street. A rally that’s already added more than $1.3 trillion to the S&P 500 since Monday powered ahead today, thanks in part to the seeming inevitability of a Federal Reserve rate cut later this month. Every major group in the US equity benchmark rose, with both mega and small caps outpacing the broader market. Swap contracts even priced in slightly higher odds of a half-point Fed reduction next week. The producer price index (PPI) picked up slightly in August after the previous month’s numbers were revised lower and categories that feed into the central bank’s preferred inflation gauge were muted. Separate data showed jobless claims ticked up. “Recognizing that the Fed can surprise ‘dovish’ right now whereas it cannot surprise ‘hawkish’, we think PPI sustains a lingering possibility of a starter 50, which would take less risk with the soft landing,” said Evercore’s Krishna Guha. Here’s your markets wrap. —David E. Rovella

Izzy Englander’s Millennium Management is looking to raise between $7 billion and $10 billion of new capital in a structure aimed at giving the hedge fund firm a more permanent source of capital. Millennium has, like many of its peers, been moving to lock up client cash for longer. The firm, which now manages about $69 billion, has more recently taken a page from private equity firms and started raising money that’s callable—rather than taking it in all at once like most hedge funds.

OpenAI is getting closer to releasing a new artificial intelligence model that is said to perform some human-like reasoning tasks. The timing is still unclear, but a release to a limited number of users could come as soon as this week. AI with the ability to reason is considered a major step in the development of the technology, both by proponents and those who consider it a grave threat. In this case, what it means is that OpenAI’s tools should be able to solve multi-step problems, including complicated math and coding questions.

Adobe fell in extended trading after giving a revenue forecast that missed Wall Street estimates, fueling investor impatience for the company’s AI tools to begin generating sales. Known for its software for creative professionals, Adobe has been adding AI features to its applications, such as embedding its proprietary AI model, Firefly, into products including Photoshop and Illustrator. But there’s been increasing anxiety on Wall Street in recent months that AI could ultimately do damage to the business of traditional software companies.

As Beijing struggles to contain a nationwide slump in property values, economists have been quick to draw parallels with Japan. Recent data show China recorded its first contraction in bank lending to businesses and households in nearly two decades, and this after several months of weak retail sales. It appeared to confirm that a Japan-style “balance-sheet recession” is underway, a situation in which consumers and companies prioritize paying down debt. There are other unsettling parallels, too, but what’s being lost in the noise is one very big difference.

An initial public offering by the home-loan unit of India’s largest shadow lender was oversubscribed by more than 60 times, highlighting continued investor exuberance over listings in the nation. Bajaj Housing Finance, which sought to raise 65.6 billion rupees ($781 million) in the nation’s biggest public offering of 2024, attracted bids for about $39 billion on the last day of the sale on Wednesday. That’s more than 1% of the country’s gross domestic product. India has been bustling with debuts, with $7.75 billion raised in listings so far this year. Investors have been chasing first-day gains, which have averaged about 30% this year.

Air Canada is asking Prime Minister Justin Trudeau’s government to intervene in contract negotiations with its pilots, seeking to avoid a shutdown of the airline next week. The company is set to begin winding down operations Sunday as talks with more than 5,000 unionized pilots appear at an impasse. Fifteen months of negotiations between Air Canada and the Air Line Pilots Association have stalled over wages, and the Montreal-based airline wants the government to request arbitration as soon as this weekend.

One of San Francisco’s most iconic buildings is celebrating its reopening after a four-year, $250 million makeover meant to symbolize the city’s renewal. The Transamerica Pyramid is to hold a splashy event featuring Mayor London Breed and famed architect Norman Foster, whose firm led the renovation. It’s a litmus test not only for a downtown that faces a record 37% office vacancy rate, but also for developer Michael Shvo. But there’s also a lawsuit by one of its key tenants to contend with.

With a presidential election looming, a rate cut in the wings and the typical market volatility of September and October underway, keeping emotions in check as an investor will be more challenging. But the four professionals sharing ideas with Bloomberg News are paid to do just that—to cut through that mental clutter and spot opportunities no matter how the market’s performing. Here’s where they say you should put your cash right now.

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