Daily Market Report 08-31-2023

Daily Market Report

As of 11:00 A.M. EST


Stock Traders Hold Back on Big Bets Before Jobs: Markets Wrap – Bloomberg, 8/31/2023

  • Stocks, bonds and the dollar posted small moves after mixed economic data, with traders bracing for Friday’s jobs report for clues on the outlook for Federal Reserve policy.
  • The S&P 500 rose for a fifth straight day, while still heading toward its worst month since February.
  • The S&P 500 rose 0.4%. The Nasdaq 100 rose 0.7%. The Dow Jones Industrial Average rose 0.3%.
  • Trading volume was 20% below the average of the past month.
  • Treasury two-year yields were little changed.
  • The dollar halted a three-day slide.
  • Swap markets placed roughly even odds the Fed will boost its benchmark rate in November by a quarter point.
  • The Fed’s preferred measure of underlying inflation saw the smallest back-to-back increases since late 2020, encouraging consumer spending.
  • Wall Street is now eagerly awaiting Friday’s labor-market data, which will provide further insights on the Fed’s next steps. While the report is currently forecast to show the US added the fewest jobs since the end of 2020, that would still mark a healthy pace of payroll growth.
  • Fed Bank of Atlanta President Raphael Bostic said policymakers need to be cautious not to overtighten monetary policy and risk unnecessary harm to the US labor market.
  • Officials raised their benchmark rate last month to a 22-year high, after skipping a hike at their June meeting.
  • Salesforce climbed after giving a revenue and profit forecast for the current period that topped analysts’ estimates, signaling progress in the campaign to cut costs and quelling some anxiety about a sales slowdown.
  • CrowdStrike Holdings rose after the security software company issued forecast-beating second-quarter earnings and a guidance upgrade, prompting several analysts to raise their price targets on the stock.
  • Dollar General fell after cutting its profit forecast for the second straight quarter amid rising labor costs and “softer sales trends.”
  • The Stoxx Europe 600 rose 0.2%.
  • The Bloomberg Dollar Spot Index rose 0.3%.
  • The yield on 10-year Treasuries declined two basis points to 4.09%.
  • West Texas Intermediate crude rose 1.9% to $83.18 a barrel.
  • Gold futures fell 0.2% to $1,968.60 an ounce.

Salesforce shares pop on earnings beat and optimistic forecast – CNBC, 8/31/2023

  • Salesforce shares jumped in extended trading on Wednesday after the cloud software company announced quarterly results and guidance that surpassed Wall Street’s expectations.
  • Revenue: $8.60 billion, vs. $8.53 billion as expected by analysts, according to Refinitiv.
  • During the quarter Salesforce said AI enhancements to its Sales Cloud and Service Cloud applications were available for $50 per person per month on top of existing costs.
  • And it announced an AI Cloud that will encompass tools for marketing and data analysis.
  • Earnings: $2.12 per share, adjusted, vs. $1.90 per share as expected by analysts, according to Refinitiv.
  • For the current quarter, Salesforce called for $2.05 to $2.06 in adjusted earnings per share on $8.7 billion to $8.72 billion in revenue.
  • Analysts polled by Refinitiv had expected adjusted earnings of $1.83 per share and $8.66 billion in sales.
  • Salesforce lifted its full-year forecast. It now sees $8.04 to $8.06 in adjusted earnings per share on $34.7 billion to $34.8 billion in revenue, implying 11% revenue growth.
  • Analysts surveyed by Refinitiv had been looking for $7.45 per share in profit and $34.65 billion in revenue.
  • Neither AI nor a recent price hike will have a major impact on the full-year guidance, Weaver said.

Dollar General Sinks as Fizzling Sales Spur New Forecast Cut – Bloomberg, 8/31/2023

  • Dollar General, already on track for its first annual share decline, plunged again after slashing its profit forecast for the second straight quarter.
  • Rising labor costs and efforts to tame inventory growth will crimp profit in the coming months, and annual earnings will tumble as much as 34% on a per-share basis, the discount retailer said Thursday as it reported financial results.
  • Dollar General had previously said the measure wouldn’t fall more than 8%, while Wall Street had been projecting a drop of about 6%.
  • Sales, bolstered by store openings, rose 3.9% to $9.8 billion.
  • Analysts had estimated $9.9 billion.
  • Dollar General said customer traffic fell.
  • In the latest quarter, Dollar General’s comparable sales edged down 0.1%, while Dollar Tree’s and Walmart’s US operations reported gains of more than 6%.
  • Total merchandise inventories climbed 8.7% from a year earlier, after a jump of 20% in the previous quarter.

CrowdStrike Raises Forecasts as Earnings Top Estimates – Barron’s, 8/31/2023

  • CrowdStrike Holdings reported better-than-expected financial results and inched up its outlook for the full fiscal year, but the security software company’s stock was little changed in late trading.
  • For the fiscal second quarter ended July 31, the company posted revenue of $731.6 million, up 37% from a year ago.
  • That was above both the company’s guidance range of $717.2 million to $727.4 million and the Wall Street consensus forecast of$724.1 million.
  • Annual recurring revenue was $2.93 billion, up 37%. Free cash flow was $188.7 million, up from $135.8 million in the comparable year-earlier quarter.
  • On an adjusted basis, CrowdStrike earned 74 cents a share, ahead of both the company’s guidance range of 54 to 57 cents a share and the Street consensus of 56 cents.
  • For the third quarter, Crowdstrike expects revenue of $775.4 million to $778 million, with adjusted profits of 74 cents a share.
  • The Wall Street consensus had called for $774 million in revenue and 60 cents a share in adjusted profits.
  • Crowdstrike now sees revenue for the January 2024 fiscal year of $3.03 billion to $3.04 billion, with profits on an adjusted basis of $2.80 to $2.84 a share.
  • The company’s previous forecast called for revenue of $3 billion to $3.04 billion, and profits of $2.32 to $2.43 a share.

Okta hikes annual earnings guidance by about a third after weakness doesn’t materialize, stock rallies nearly 10% – Market Watch, 8/31/2023

  • Total revenue rose to $556 million, an increase of 23% over last year’s $452 million. Analysts had forecast 22 cents a share on revenue of $534.7 million.
  • After adjusting for stock-based compensation expenses and other items, the company reported earnings of 31 cents a share, versus a loss of 10 cents a share a year before. Revenue rose to $518 million from $414.9 million in the year-ago quarter.
  • Okta late Wednesday hiked its annual earnings outlook by about a third after the identity-management software company’s worst-case scenario of weak business spending never materialized.
  • Okta said sees adjusted third-quarter earnings of 29 cents to 30 cents a share on revenue of $558 million to $560 million, while analysts had forecast 29 cents a share on revenue of $552.9 million,
  • For the year, Okta expects $1.17 to $1.20 a share on revenue of $2.21 billion to $2.22 billion, while analysts surveyed by FactSet expected 91 cents a share on revenue of $2.18 billion.
  • Okta last had forecast earnings of 88 cents to 93 cents a share on revenue of $2.18 billion to $2.19 billion.

Campbell Soup stock gains ground after profit matches expectations while sales top, as prices jump 10% – Market Watch, 8/31/2023

  • Shares of Campbell Soup tacked in premarket trading Thursday, after the canned soup, foods and snacks company reported fiscal fourth-quarter profit that matched expectation and sales that topped, as a 10% increase in prices offset a 5% decline in volume and mix.
  • Sales grew 4.1% to $2.068 billion, above the FactSet consensus of $2.056 billion, as meals and beverages sales inched up 0.1% to $936 million and snacks sales increased 7.6% to $1.13 billion.
  • Price increased 6% in meals and beverages and rose 13% in snacks, while volume fell 5% in both segments.
  • Excluding nonrecurring items, adjusted earnings per share of 50 cents was the same as the FactSet consensus.
  • For fiscal 2024, the company expects adjusted EPS of $3.09 to $3.15, compared with the FactSet consensus of $3.09, and sees sales growth of negative 5% to positive 1.5% while the current FactSet sales consensus of $9.47 billion implies 1.2% growth.

Arm, Instacart, Klaviyo Prep for Their IPOs—With Caution – Wall Street Journal, 8/31/2023

  • The IPO market is perking up, and companies looking to go public are proceeding with caution.
  • British chip designer Arm, grocery delivery company Instacart and marketing-automation platform Klaviyo are aiming to collectively raise billions of dollars in stock offerings in September.
  • These three marquee initial public offerings mark a reawakening from the historical quiet that befell the new-issue market for the last 18 months.
  • The stakes are high: If these three IPOs trade well, awarding the companies and their selling shareholders with gains, it will encourage other companies to list their stocks in the coming months, many bankers, lawyers and investors say.
  • If they stumble, the IPO doldrums might continue.
  • Instacart has lined up large investors including Norges Bank, Sequoia Capital and Valiant Capital Management to buy up to $400 million in stock in its IPO, the company revealed in a regulatory filing last week.
  • That could be around half, or more, of the total shares sold in the offering, according to people familiar with the matter.
  • Klaviyo is also in talks with possible financial-anchor investors for its offering, according to people familiar with the matter.

Fed Ramps Up Demands for Corrective Actions by Regional Banks – Bloomberg, 8/31/2023

  • US regulators are quietly demanding that regional lenders shore up their liquidity planning, part of a ramp-up in efforts to tighten supervision in the wake of three bank failures earlier this year.
  • The Federal Reserve has issued a slew of private warnings to lenders with assets of $100 billion to $250 billion, including Citizens Financial Group, Fifth Third Bancorp and M&T Bank, according to people with knowledge of the matter.
  • The wide-ranging notices have touched on everything from lenders’ capital and liquidity to their technology and compliance, the people said, asking not to be identified discussing confidential supervisory information.
  • The onslaught of such warnings — known as matters requiring attention and matters requiring immediate attention, or MRAs and MRIAs — comes as examiners look for other signs of stress in a system already strained by the collapse of First Republic Bank, Silicon Valley Bank and Signature Bank this year.
  • It’s part of a wider increase in scrutiny impacting banks of all sizes after Michael Barr, the Fed’s vice chair for supervision, vowed to “improve the speed, force and agility” of oversight earlier this year.

Musk Says X Will Offer Video and Audio Calls in Move Toward Super-App – Bloomberg, 8/31/2023

  • Users of X, the social network formerly known as Twitter, will be able to make video and audio calls through the platform without having to share their phone number, owner Elon Musk said in a post Thursday, in the latest expansion of services as he seeks to create an “everything app.”
  • Musk wants X to become more like Tencent Holdings’s WeChat, a messaging service turned super-app that offers everything from social media and video games to fintech.
  • X Chief Executive Officer Linda Yaccarino has said X will include features such as payments and banking.
  • The announcement came after the platform updated its privacy policy to include the collection of biometric data.

Kylie Jenner Has Explored Buying Back Coty’s $600 Million Stake in Her Makeup Brand – Bloomberg, 8/31/2023

  • Kylie Jenner has explored taking back ownership of the cosmetics line she sold to Coty three years ago, according to people familiar with the matter, a sign of how the relationship between one of the world’s largest beauty companies and one of entertainment’s most famous families has become strained.
  • In recent months, Jenner has had informal discussions about trying to buy back the 51% stake in Kylie Cosmetics that Coty bought for $600 million in 2020, the people said, asking not be identified because the matter is private.
  • There have been disagreements over price and valuation, according to the people.
  • Jenner’s half-sister Kim Kardashian is also in talks to buy back the 20% stake in her skincare line, SKKN by Kim, that Coty agreed to buy for $200 million the same year.
  • Both women have expressed frustration with how Coty has managed their brands, two people familiar with their thinking said, though it’s not clear exactly which aspects of the company’s oversight they oppose.


Fed’s Preferred Inflation Gauges Rise Modestly, Spending Jumps – Bloomberg, 8/31/2023

  • The Federal Reserve’s preferred measure of underlying inflation posted the smallest back-to-back increases since late 2020, encouraging a burst of consumer spending and feeding growing expectations that the economy can avert a recession.
  • The core personal consumption expenditures price index, which strips out the volatile food and energy components, rose 0.2% in July for a second month.
  • The overall PCE price index also increased 0.2%, Bureau of Economic Analysis data showed Thursday.

  • Inflation-adjusted consumer spending increased 0.6% last month on the heels of a solid gain in June.
  • One worrisome figure in the report was a measure of services costs closely watched by Fed officials.
  • The gauge that tracks services inflation excluding housing and energy jumped 0.5% in July, the biggest advance since the start of the year, according to Bloomberg calculations.
  • The figure was distorted by an outsize increase in portfolio management and investment advice.
  • Excluding that category, the so-called supercore services inflation measure rose 0.25% from a month earlier.
  • While wages and salaries rose in July, real disposable income, the main support to consumer spending, fell 0.2% on a decline in government transfer receipts.
  • Inflation-adjusted outlays for goods increased 0.9%, the most since January, boosted by robust spending on a range of goods in the month.
  • Services spending advanced 0.4%, an acceleration from the prior month and reflecting outlays for meals out and utility usage due to unusually warm temperatures in the month.
  • The saving rate decreased to 3.5%, the lowest since November, suggesting the recent pace of spending may not be sustained in coming months.

U.S. jobless claims fall to lowest level in four weeks – Market Watch, 8/31/2023

  • Initial jobless claims fell by 4,000 to 228,000 in the week ended Aug. 26, the Labor Department said Thursday.
  • Economists polled by The Wall Street Journal had estimated new claims would rise 5,000 to 230,000.
  • Last week claims fell a revised 8,0000 to 232,000.
  • The number of people already collecting jobless benefits rose by 28,000 to 1.73 million in the week ending Aug. 19.
  • On an unadjusted basis, claims fell 6,970 to 192,467 in the week ended Aug. 26.

Fed’s Bostic Urges Caution to Avoid Inflicting Unnecessary Pain – Bloomberg, 8/31/2023

  • Federal Reserve Bank of Atlanta President Raphael Bostic said policymakers need to be cautious not to overtighten monetary policy and risk unnecessary harm to the US labor market.
  • “Based on current dynamics in the macroeconomy, I feel policy is appropriately restrictive,” Bostic said in remarks prepared for delivery at the South African Reserve Bank’s Biennial Research Conference.
  • “I think we should be cautious and patient and let the restrictive policy continue to influence the economy, lest we risk tightening too much and inflicting unnecessary economic pain.”
  • “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” he said.
  • “Should conditions not play out the way I anticipate, and inflation or inflation expectations abruptly reverse course and start climbing, then I would certainly support doing what would be necessary to put the US economy back on a path toward price stability,” he said.
  • “That does not mean I am for easing policy any time soon,” he said.
  • “Inflation in the United States is still too high. The battle against inflation has seen significant progress. Inflation is well off the very elevated levels we saw in the last year, but it’s essential that it be brought all the way back to our target.”
  • Given that, “underlying inflation may well be close to our target already,” Bostic said.
  • Bostic described the employment market as being in a period of “measured cooling” and noted that revisions could lower past reported payroll gains.
  • “The job market may be cooling even faster than the headline numbers suggest, as growth in total hours worked has slowed more than growth in employment because of recent increases in part-time work,” Bostic said.

Job-cut announcements triple in August: Challenger – Market Watch, 8/31/2023

  • U.S.-based employers announced 75,151 cuts in August, a 217% increase from the 23,697 cuts announced in July, according to Challenger, Gray & Christmas.
  • It is 267% higher than the 20,485 cuts announced in the same month in 2022, the report said.
  • Warehousing led all industries in August with 32,123, primarily on the bankruptcy of Yellow.

DOJ, SEC Investigate Tesla Over Secret Glass House Project – Wall Street Journal, 8/31/2023

  • Manhattan federal prosecutors are investigating Tesla’s use of company funds on a secret project that had been described internally as a house for Chief Executive Elon Musk, people familiar with the matter said.
  • The U.S. Attorney’s Office for the Southern District of New York has sought information about personal benefits paid to Musk, how much Tesla spent on the project—which called for a spacious glass structure to be built in the Austin, Texas, area—and what it was for, the people said.
  • The Wall Street Journal was the first to report in July that Tesla board members had investigated whether company resources were misused on the secret effort, known internally as “Project 42,” and whether Musk was personally involved. The outcome of Tesla’s internal investigation couldn’t be learned.
  • The Securities and Exchange Commission has also opened a civil investigation into Project 42 and is seeking similar information from the company, one of the people said.

Idalia Lashes the Carolinas as a Tropical Storm – Wall Street Journal, 8/31/2023

  • Idalia was striking the Carolinas as a tropical storm Thursday morning after making landfall a day earlier in Florida as a dangerous major hurricane.
  • The National Hurricane Center said Idalia’s eye was off the coast of the Carolinas early Thursday and should move further into the Atlantic Ocean during the day.
  • Still, the weakened storm was lashing eastern North Carolina with more of the heavy rain and life-threatening flash floods it generated in Florida, Georgia and South Carolina.
  • Idalia has moved quickly since coming ashore in northern Florida as a Category 3 storm, flooding small towns and downing power lines.
  • Crews in the damage zone have been busy rescuing people from flooded homes.
  • Nearly 150,000 customers remain without power in the state, according to PowerOutage.us.
  • Florida Gov. Ron DeSantis said Wednesday that the state hadn’t yet confirmed any storm-related deaths. Still, there have been reports of deaths during the storm.
  • Forecasters said Idalia wouldn’t lose much strength Thursday but would likely weaken in the coming days.
  • The storm in the morning was packing maximum sustained winds around 60 miles an hour, compared with 125 mph when it made landfall.

Mitch McConnell Freezes a Second Time During Kentucky Press Conference – Wall Street Journal, 8/31/2023

  • Senate Minority Leader Mitch McConnell froze and fell silent during an appearance before the press Wednesday, the second such incident this summer, prompting new concerns about whether the Kentucky Republican can continue to lead his party in the wake of a fall earlier in the year.
  • The latest incident occurred as McConnell, 81 years old, was taking questions from reporters in his home state.
  • When he was asked if he planned to run for re-election in 2026, he stood motionless for about 30 seconds.
  • McConnell’s office said the senator paused because he felt momentarily lightheaded.
  • An aide said that McConnell “feels fine” and “as a prudential measure, the Leader will be consulting a physician.” McConnell made a round of calls to Senate allies following the incident, and his office didn’t release any other details on his condition.


UBS Flags Cost Cuts After $29 Billion Credit Suisse Windfall – Bloomberg, 8/31/2023

  • UBS Group outlined major targets for its integration of former rival Credit Suisse including 3,000 domestic job cuts and more than $10 billion in cost savings, as it posted the biggest ever quarterly profit for a bank on the back of the bargain acquisition that closed in June.
  • The Zurich-based lender reported a $29 billion profit before tax in the second quarter, a result of the accounting difference between the $3.8 billion price UBS paid for Credit Suisse and the value of the acquired lender’s balance sheet.
  • Underlying profit for the first combined UBS-Credit Suisse quarter came in at $1.1 billion.
  • UBS saw net new money inflows of $16 billion in the quarter
  • Credit Suisse outflows slowed to 39 billion Swiss francs ($44.4 billion)
  • Bank sees pick-up in client activity, expects new asset inflows to continue
  • In a concrete sign of job reduction plans, Ermotti said that UBS will remove some 1,000 positions in Switzerland as a result of overlaps in the domestic banking businesses.
  • UBS said that the wind-down unit, which houses businesses brought over from Credit Suisse that are not compatible with its strategy, had approximately $55 billion of risk-weighted assets at the end of the quarter.
  • Some $8 billion in positions had been exited during the quarter.

Polestar second-quarter loss widens as it ramps up EV deliveries – CNBC, 8/31/2023

  • Swedish electric vehicle maker Polestar on Thursday reiterated that it still expects to deliver at least 60,000 EVs in 2023, with a positive gross margin – and confirmed that its next two new models are still on track to go into production as expected.
  • Revenue for the second quarter jumped to $685.2 million from $589.1 million during the same quarter last year.
  • Polestar delivered 15,765 vehicles in the second quarter, up 36% from a year earlier, and a total of 27,841 vehicles in the first half of 2023.
  • On an adjusted basis, it had a loss of $334.4 million.
  • The company reiterated the guidance it provided in May, saying that it still expects to produce between 60,000 and 70,000 vehicles in 2023, with a gross margin of 4% for the year.
  • Polestar’s gross margin was 1.4% in the first half of 2023 and 4.9% in 2022.
  • The automaker delivered 51,491 vehicles in 2022.

China Eases Down Payments, Mortgage Rates in Fresh Stimulus Move – Bloomberg, 8/31/2023

  • China unveiled reductions in down-payment requirements for homebuyers and will allow lenders to lower rates on existing mortgages, taking major new steps to a halt a slump in the country’s residential property market.
  • The minimum down payment will be 20% for first-time buyers and 30% for second-time buyers, according to a joint statement from People’s Bank of China and National Administration of Financial Regulation on Thursday.
  • The new rules pave way for potentially substantial reductions to minimum down-payment rules in bigger cities.
  • Chinese banks have traditionally required higher down-payment rates than in developed economies.
  • While China has reduced benchmark interest rates, most Chinese households haven’t seen a benefit, as banks don’t typically reprice existing loans until the beginning of the year.

Microsoft to Unbundle Teams Software in Europe – Wall Street Journal, 8/31/2023

  • Microsoft says it will change the way it sells its Teams videoconferencing service to business customers in Europe in a push to address concerns raised in a European Union antitrust investigation.
  • The software giant said Thursday that it plans to offer business customers the chance to buy a lower-priced version of its productivity suites that doesn’t include the videoconferencing app.
  • New customers would still have the option of purchasing Teams separately if they want the service.
  • “We believe this is a constructive step that can start to lead to immediate and meaningful changes in the market,” said Nanna-Louise Linde, Microsoft’s vice president for European government affairs.

ASML Says It Can Ship Restricted Chip-Making Gear Until Year End – Bloomberg, 8/31/2023

  • ASML Holding said it has licenses to ship restricted chip-making machines to China until the end of the year, even as export curbs kick in from September.
  • Europe’s most valuable tech company doesn’t expect to get export licenses to ship three advanced immersion deep ultraviolet lithography, or DUV, models to China from January, an ASML spokesperson said on Thursday.
  • Those restrictions are set to take effect from Sept. 1.
  • ASML is already restricted from selling extreme ultraviolet machines, its most advanced systems, to the Asian country.
  • The four-month period starting September is meant to enable ASML to fulfill contractual obligations with Chinese customers, the spokesperson said.

Ukrainian Counteroffensive Pierces Main Russian Defensive Line in Southeast – Wall Street Journal, 8/31/2023

  • Ukrainian forces have penetrated the main Russian defensive line in their country’s southeast, raising hopes of a breakthrough that would reinvigorate the slow-moving counteroffensive.
  • Ukrainian paratroopers are fighting through entrenched Russian positions on the edge of the village of Verbove, a Ukrainian officer in the area said.
  • Ukrainian forces have also reached the main defensive line to the south of nearby Robotyne village, he said.
  • Ukraine’s military confirmed advances toward Verbove and south of Robotyne, without giving details.
  • Ukrainian forces are now working to expand the cracks in the line to create a hole large enough for Western-provided armored vehicles to push through with sufficient logistical support.

Services Sector Fuels India’s Growth to Fastest in a Year – Bloomberg, 8/31/2023

  • India’s economy shined in its latest report card on strong services growth and a modest pick up in manufacturing despite still-high interest rates.
  • Gross domestic product rose 7.8% in the three months to June from a year ago, according to government data released Thursday.
  • It matched the median estimate in a Bloomberg survey and marks the fastest pace in a year.
  • Steady growth in the Asia’s third largest economy gives room for the financial authorities to fight inflation ahead of several state polls this year.
  • The central bank kept rates unchanged for a third meeting and ordered banks to mop up excess liquidity while the government imposed export restrictions on some food staples.
  • Companies in the information technology, hotels and transport industries are expanding and could bring more business to the services sector, which contributes to more than half of GDP.
  • Double-digit credit growth in the financial services sector is also helping.
  • Agriculture rose 3.5%, mining was up 5.8%, manufacturing increased 4.7% from the last fiscal year.
  • Electricity +2.9%; construction +7.9%; trade, hotels and transport +9.2%.
  • Financial services +12.2%; public administration +7.9%.
  • Government spending fell 0.72%, consumption was up 6%.
  • Gross fixed capital formation, a proxy for investment, increased 7.95%.
  • Gross value added, a key measure of economic productivity, rose 7.8% in April-June from a year ago.

Japan Looks to Boost Defense Budget by 13% and Add New Missiles – Wall Street Journal, 8/31/2023

  • Japan’s Defense Ministry on Thursday asked for a $53 billion budget for next fiscal year, a 13% increase, adding antimissile systems and boosting maintenance for a military that long skimped on basic functions.
  • In yen terms, the ¥7.74 trillion budget request is a record, reflecting rising tensions between the U.S. and China. Prime Minister Fumio Kishida has pledged to lift the defense budget to 2% of Japan’s gross domestic product by fiscal 2027, after many years in which the figure, calculated slightly differently, was around 1%.
  • In the footsteps of the late former Prime Minister Shinzo Abe, Kishida has eased away from Tokyo’s traditional defense-only posture to take a more active role in regional security in support of the country’s main ally, the U.S.
  • The country has scrapped its self-imposed ban on the possession of offensive weapons by moving to acquire longer-range missiles that reach enemy territory. On Monday, the U.S. approved the potential sale to Japan of up to 50 extended-range air-to-surface missiles for an estimated cost of $104 million.

Factmonster – TODAY in HISTORY

  • Thomas Edison received a patent for his “Kinetoscope,” and moving pictures were born. – 1887
  • Mary Ann Nicholls, considered to be Jack the Ripper’s first victim, was found murdered in London. – 1888
  • Trinidad and Tobago gained independence from Great Britain. – 1962
  • Poland’s Solidarity labor movement had its beginnings when an agreement ending a 17-day strike was signed in Gdansk. – 1980
  • Russia officially ended its military presence in the former East Germany and the Baltic states. – 1994
  • Princess Diana and her companion Dodi al-Fayed were killed in a car accident in Paris. – 1997
  • Armenia severed diplomatic relations with Hungary, after the pardoning of Ramil Safarov. In 2004, Safarov was convicted of killing an Armenian soldier. – 2012

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