Tensions in the Middle East cause oil prices to rise

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Dow records record, technology stocks lag behind
The Dow Jones Industrial Average closed at a record high as investors exited technology stocks. The 30-stock index rose 0.16%, while the S&P 500 and Nasdaq Composite fell 0.32% and 0.85%, respectively. Nvidia tumbled 2.25% ahead of its earnings report on Wednesday. Other chip stocks such as Broadcom and Micron fell 4% and 3.8%, respectively. Meanwhile, the yield on the 10-year U.S. Treasury note rose slightly after Federal Reserve Chairman Jerome Powell signaled plans to cut interest rates.

New CFO at Apple
Apple announced that CFO Luca Maestri will step down on Jan. 1. His successor will be longtime Apple insider Kevan Parekh. Maestri, who has served as CFO since 2014, will continue to lead the IT, security and real estate development teams. Parekh, currently vice president of financial planning and analysis, has been a key member of Apple’s financial leadership. Under Maestri’s tenure, Apple’s revenue has more than doubled and the company’s stock price has risen over 800%. Separately, the company plans a press conference at its headquarters on Sept. 9, where it is expected to unveil new iPhones and Apple Watch models.

Oil price rises
US crude oil prices rose 3.5% on production halts in Libya and escalating tensions between Israel and Hezbollah. The government in eastern Libya halted oil production and exports amid a political dispute over who should run the central bank, potentially affecting global markets. At the same time, heavy shelling between Israel and Hezbollah has been taking place. Ongoing tensions in the Middle East, including recent assassinations of militant leaders, are keeping the region on edge.

Endurance
Exxon Mobil expects that oil and natural gas will account for over 50% of global energy consumption by 2050, despite efforts to reduce dependence on fossil fuels. Oil demand will stagnate but remain above 100 million barrels per day through 2050. This sustained demand challenges global climate goals to achieve net-zero carbon emissions by 2050. While gasoline demand is expected to decline, oil will continue to be critical for manufacturing, chemical production and heavy transportation.

“Orange pilled”
Former President Donald Trump’s newfound support for Bitcoin appears to have been influenced by a small group of cryptocurrency advocates, particularly a trio of individuals from Puerto Rico. Along with others in Trump’s inner circle, they worked behind the scenes to change his perspective on Bitcoin, a process known in the Bitcoin community as being “orange-pilled.” This term is borrowed from the concept of the “Red Pill” in the movie “The Matrix” and symbolizes a conversion to Bitcoin ideology. Trump’s support appears to be tied to possible financial support from the crypto community. CNBC’s MacKenzie Sigalos has the backstory.

(PRO) Nvidia Security
Bank of America warns that “investors may be underestimating the risk of disappointment” in Nvidia’s earnings, which could lead to a broader sell-off. This is what the investment bank suggests is a way to hedge against the risk.

Boeing’s space ambitions may be in jeopardy as speculation grows that the aerospace giant may sell its struggling space business following problems with the Starliner spacecraft that left two astronauts stranded on the International Space Station.

According to Reuters, Boeing and Lockheed Martin are already in talks to sell their rocket launch joint venture, United Launch Alliance, to Sierra Space for an estimated $2 billion to $3 billion. The potential sale comes at a time when Boeing’s dominance in space exploration is increasingly being challenged by younger, more agile competitors.

Boeing, once the backbone of NASA’s Apollo missions, now stands in the shadow of Elon Musk’s SpaceX, which has quickly become the partner of choice for human space missions. Boeing is not alone in facing these challenges. Like Intel, which has fallen behind rivals like Nvidia, Broadcom and AMD in the AI ​​and smartphone markets, Boeing is grappling with the reality of being overtaken in an industry where it was once a leader.

“This incident could negatively impact Boeing’s reputation with NASA, and it is unclear if and when the company will have another opportunity to launch astronauts into space,” Bank of America analyst Ronald Epstein said in a statement. “We would not be surprised if Boeing were to exit the manned space flight business.”

But Epstein’s criticism went further. He pointed to gaps in Boeing’s engineering workforce and suggested that the company may have strayed from its engineering roots – a possible reason for the recent setbacks.

These challenges represent another issue for Boeing’s new CEO, Robert Ortberg, who is tasked with steering the company through the numerous safety issues facing its commercial aircraft.

Boeing shares fell 0.85 percent to $173, but Epstein is maintaining his 12-month price target of $200, representing a 15 percent increase from Monday’s closing price.

As for the broader market, the Dow closed at a record high. And although there is a rotation out of technology stocks, the weight of the sector pushed the S&P 500 lower.

While UBS acknowledges the volatility that has impacted technology stocks recently, it remains convinced that AI’s long-term growth potential will benefit the broader market.

“We see room for further gains in U.S. equities in a constructive environment driven by Fed rate cuts, the artificial intelligence growth story and healthy earnings growth,” UBS wrote in a note on Monday, reiterating its year-end target for the S&P 500 of 5,900, which would represent a 5% increase from current levels.