Kapital Market Brief | September 5 2025

Top news

·     In the U.S., August employment data reinforced expectations of a Federal Reserve rate cut.

·     President Donald Trump signed an executive order to lower tariffs on autos from Japan and other products from 27.5% to 15.0%.

·     Eurozone GDP grew 1.5% y/y in Q2 2025, according to final figures.

·     In Canada, the unemployment rate rose from 6.9% to 7.1% in August, a level not seen since May 2016 if the pandemic is excluded. Additionally, the economy lost 65,000 jobs.

Economic outlook

In the U.S., August employment data reinforced expectations of a Federal Reserve rate cut. Nonfarm payrolls grew by just 22,000 jobs in August 2025, well below the consensus forecast of 75,000. Additionally, job creation in June and July was revised down by a combined 21,000, with June showing a loss of 13,000 jobs. Meanwhile, the unemployment rate stood at 4.3% in August, in line with consensus expectations. Annual wage growth came in at 3.7% in August, matching market estimates but below July’s 3.9%. Overall, the labor market continues to show signs of weakness, bolstering expectations of a Fed rate cut. Following the release of this data, the 10-year Treasury yield fell from 4.15% to 4.08%, its lowest level since April 2025.

Markets and stocks

U.S. equity futures traded higher despite a weak August jobs report, which showed the creation of 22,000 jobs versus 75,000 expected and an unemployment rate of 4.3%, reinforcing expectations of a Federal Reserve rate cut at its September 17 meeting. In Europe, stocks advanced, supported by the prospect of U.S. rate cuts and despite a drop in Orsted shares after the company lowered its earnings guidance and confirmed a $9.4 billion capital increase. In Asia, markets closed higher, driven by relief from U.S. auto tariff cuts on Japan and expectations of new semiconductor investments in the U.S.

In commodities, oil extended its losses for a third straight session, pressured by an unexpected rise in U.S. inventories and the possibility that OPEC will increase production at its meeting this Sunday. Gold held around $3,580 per ounce, up 3% on the week and heading for its best performance in three months.

In fixed income, U.S. Treasury yields fell sharply after the jobs data, with the 10-year yield at 4.08% and the 2-year at 3.48%, both at multi-month lows.

OMA (Grupo Aeroportuario Centro Norte) reported that total passenger traffic at its 13 airports rose 7.4% in August 2025 compared to the same month last year. Domestic traffic increased 6.7%, while international traffic rose 11.6%.

Grupo Financiero Banorte announced that it signed a purchase agreement with Clearscope Holdings, a subsidiary of Klar Holdings, to sell all shares of Banco Bineo, its 100% digital bank. The transaction is subject to approval by financial and competition authorities in Mexico. With this deal, Banorte seeks to strengthen its strategic focus, while Klar will expand its presence in digital financial services in the country.

Corporate news

Broadcom shares jumped after reporting fiscal Q3 revenue and earnings above expectations and announcing a $10 billion order from a new client for its AI chips, reinforcing growth prospects in the segment.

Tesla unveiled a new compensation plan for Elon Musk valued at nearly $975 billion, which could grant him more than 423 million additional shares and expand his voting power. The proposal also includes a vote on a potential Tesla investment in AI firm xAI.

Lululemon shares dropped nearly 20% after sharply cutting its annual guidance, warning of a $240 million hit from tariffs. The company expects earnings below market forecasts and flagged weakness in its U.S. product portfolio, adding further pressure to margins.