Morgan Stanley

CleanSpark, which operates AI data centers for Meta Platforms, is issuing its first junk bond to raise about $2.23 billion as it funds infrastructure buildout. According to people familiar with the matter, initial terms priced the five-year notes at a yield of about 8.5%, roughly 2 percentage points above the average for BB rated corporate bonds tracked by Bloomberg. The backdrop is that investors are demanding higher spreads for data center financing. The people said that as of the bond sale on the 17th, orders from investors were roughly equal to the deal size. Morgan Stanley is the lead manager, with Goldman Sachs Group and Wells Fargo also participating as underwriters, and terms are expected to be finalized on the 18th. According to a regulatory filing, proceeds will fund construction of a data center in Sandersville, Georgia. Bloomberg data show this is the first junk bond issuance tied to a Meta data center. According to CleanSpark's filings, the data center will be fully leased to Meta subsidiary Anbilan under a 20-year contract worth $6.6 billion in total. The data center is expected to begin operations in the October-December quarter of 2027, with Meta guaranteeing rent and operating costs. CleanSpark is rated junk, but its contract with Meta gives it a predictable revenue stream and allows it to borrow for the costly project. Bloomberg data show data center developers have issued about $39 billion of high-yield bonds so far this year, most of it backed by long-term leases with hyperscalers such as Oracle and Amazon.com. CleanSpark and Morgan Stanley did not immediately respond to requests for comment. Meta declined to comment. CleanSpark is a Las Vegas-based listed Bitcoin miner that is transforming into a data center operator supporting AI workloads. Its market capitalization is about $3.29 billion.

The dollar index traded in a narrow range ahead of the release of the US Federal Reserve's monetary policy meeting results tonight. As of 10:47 p.m. Thailand time, the dollar index was up 0.08% at 99.693, while the dollar rose 0.03% to 1.154 against the euro and weakened 0.07% to 154.97 yen. Markets are watching the meeting outcome, as well as remarks from Fed Chair Kevin Warsh, the policy rate projections known as the Dot Plot, and US economic forecasts including gross domestic product, the unemployment rate and the inflation rate. Most recently, the FedWatch Tool from CME Group indicated that investors assign a 92.7% probability that the Fed will raise interest rates by 0.25% to a range of 3.75-4% at today's meeting, and a 7.3% probability that the Fed will hold rates steady. If the Fed raises rates as expected today, it would be the first hike since July 2023, and since then the Fed has cut rates six times by a total of 1.75%. A month ago, investors assigned only a 36% probability that the Fed would raise rates at the September 16 meeting, as the market expected inflation figures to ease. However, after Kevin Warsh delivered a speech at the Fed's annual conference in Jackson Hole that pointed to tighter monetary policy, market expectations about the Fed's rate path began to shift. Meanwhile, economists at Morgan Stanley said the firm has changed its forecast from expecting no rate hikes this year to expecting two hikes, one on September 16 and another in December. Michael Gapen, chief economist at Morgan Stanley, said the most important reason is that the slowdown in inflation is still not happening fast enough to give the Fed confidence that inflation will return to 2%. Brent Wilsey, chief investment officer of Wilsey Asset Management, said that if the Fed holds rates steady today, it could surprise the stock market and could damage the Fed's credibility. Jonathan Pryor, co-head of foreign exchange trading at Marex, said the Fed is entering a new phase of monetary policy.

Wall Street stocks moved lower ahead of the US central bank's interest rate decision, which is expected to mark the start of a new rate-hiking cycle. As of 9:21 p.m. Thailand time, the Dow Jones Industrial Average was down 168.18 points, or 0.32%, at 51,924.93. The CME Group's FedWatch Tool indicates that investors are pricing in a 92.7% probability that the Fed will raise rates by 0.25% to a range of 3.75-4% at today's meeting, and a 7.3% probability that the Fed will hold rates steady. If the Fed raises rates as expected today, it would be the first hike since July 2023, and since then the Fed has cut rates six times, by a total of 1.75%. A month ago, investors assigned only a 36% probability to a Fed rate hike at the September 16 meeting. Economists at Morgan Stanley have revised their forecast from expecting no rate hikes this year to expecting two increases, one on September 16 and another in December. Michael Gapen, Morgan Stanley's chief economist, said inflation is still not slowing fast enough to give the Fed confidence that it can return to 2% within an appropriate timeframe.

Gold prices rebounded today, buoyed by falling oil prices and lower U.S. Treasury yields, while investors await the outcome of the U.S. Federal Reserve's monetary policy meeting tonight. As of 8:27 p.m. Thailand time, spot gold was up 61.47 dollars, or 1.43%, at 4,354.38 dollars per ounce, while COMEX December gold futures rose 62.80 dollars, or 1.45%, to 4,396.30 dollars per ounce. The yield on the 10-year U.S. Treasury note fell below 5% today, while West Texas Intermediate and Brent crude prices dropped more than 1% after the American Petroleum Institute reported that crude inventories rose by 7.1 million barrels last week, contrary to analysts' expectations of a 1.6 million-barrel decline. The market is watching the Fed's meeting outcome tonight, along with remarks by Fed Chair Kevin Warsh and the latest Dot Plot projections of the policy interest rate. The CME Group's FedWatch Tool indicates that investors assign a 92.7% probability to the Fed raising rates by 0.25% to a range of 3.75-4% at today's meeting, and a 7.3% probability to the Fed holding rates steady. If the Fed raises rates as expected today, it would be the first hike since July 2023, and since then the Fed has cut rates six times by a total of 1.75%. Meanwhile, economists at Morgan Stanley said in a report that the firm has changed its forecast from expecting no rate hikes this year to expecting two increases, one on September 16 and another in December.

Wall Street stock markets expect the US central bank to raise its policy interest rate at tonight's meeting to address inflation that remains above the 2% target. The CME Group's FedWatch Tool indicates that investors assign a 92.7% probability to the Fed raising rates by 0.25% to a range of 3.75-4%, and a 7.3% probability to holding rates steady. If this plays out as expected, it will be the first rate hike since July 2023, after which the Fed cut rates 6 times for a total of 1.75%. A month ago, investors assigned only a 36% probability that the Fed would raise rates at the September 16 meeting, but expectations shifted after Fed Chair Kevin Warsh signaled a tightening stance at the Jackson Hole meeting, alongside disappointing inflation data, a stronger labor market, and crude oil prices surging above 100 dollars per barrel. Meanwhile, Morgan Stanley economists revised their forecast from previously expecting no rate hike this year to expecting 2 hikes, one on September 16 and another in December. Michael Gapen, Morgan Stanley's chief economist, stated that inflation is still not slowing fast enough to give the Fed confidence that inflation will return to 2% within an appropriate timeframe.

JPMorgan co-president Doug Petno forecast that the firm's investment banking and trading fees for the third quarter will rise in the mid to high teens compared with a year earlier, sending JPMorgan stock more than 1% higher on Tuesday. Petno, who runs JPMorgan's commercial and investment bank, said clients are seeing through market volatility and the fog of uncertainty, speaking at a Barclays financial services conference in New York. The outlook places JPMorgan at the bullish end for quarterly Wall Street fees, as rivals offered more cautious views after an unusually strong first half. Morgan Stanley co-president Daniel Simkowitz said at the same conference that the third quarter is no second quarter, while Wells Fargo CFO Mike Santomassimo said investment banking fees and markets revenue should each rise roughly mid-single digits year over year. Citigroup CFO Gonzalo Luchetti said dealmaking fees are on pace for mid-single-digit growth and trading fees for low-single-digit growth, and Bank of America CEO Brian Moynihan said investment banking fees are on pace to reach $1.6 billion to $1.8 billion, down 10% to 20% from the $2 billion earned in last year's third quarter, with sales and trading flat. Petno also warned that the late-stage economy just feels too good, though he said large secular forces might make this cycle slightly different.

Vista Equity Partners is exploring strategic options for Finastra that could include a sale of the financial software provider. The private equity firm is working with bankers at Morgan Stanley on the review, which is in its early stages and could result in a sale of the company, Vista selling a stake in Finastra, or a combination with another industry player, according to a Reuters report citing people familiar with the matter. London-based Finastra has drawn initial interest from parties including other financial sponsors, with Blackstone among possible bidders looking at the firm. Vista, Finastra, Morgan Stanley and Blackstone all declined to comment to Reuters. One person familiar told Reuters Finastra could be worth as much as $12 billion in a sale, and the company is forecast to generate $650 million in EBITDA this year.

Morgan Stanley raised its price target on Target Hospitality to $25 from $22, reiterating an overweight rating, citing an accretive contract win in the lodging services provider's West Texas home territory. The new target reflects 8 times Morgan Stanley's fiscal year 2027 adjusted EBITDA estimate of $319 million, up from $287 million previously and 22% above the consensus of $261 million. The revision follows the company's late-August announcement of a 1,100-bed contract with a new customer, which arose after a data center accelerated construction ahead of schedule and the developer needed to house workers immediately. Morgan Stanley now models total revenue of $121 million for the third quarter of 2026, $438 million for full-year 2026 and $843 million for full-year 2027, up from prior estimates of $117 million, $418 million and $778 million, with adjusted EBITDA estimates for those periods of $30 million, $111 million and $319 million versus $34 million, $104 million and $287 million previously. The broker assumes 1,400 beds are converted from Target Hospitality's pipeline of more than 20,000 beds into revenue by 2027 at a $150 average daily rate, assumes a Lithium Americas mining contract is renewed beyond its initial term of September 2027, and estimates $30 million in additional run-rate variable revenue exiting 2027 that has been excluded from current guidance.

Morgan Stanley maintained its Equal-weight rating and $210 price target on Oracle after reviewing the company's fiscal 2027 first-quarter results, saying OCI delivers but gross margin is still to come. Oracle reported total revenue of $19.3 billion, up 30%, with cloud infrastructure revenue up 121% to $7.4 billion and total cloud revenue of $11.6 billion, up 62%. Remaining performance obligations reached $664 billion, up 46% year over year and $26 billion sequentially, and the company booked more than $30 billion in new AI cloud contracts in the quarter. Non-GAAP gross margin fell to 61.0%, down approximately 770 basis points year over year and just below consensus, which Morgan Stanley flagged as the key open question on when profitability will inflect. The firm pointed to diversified OCI capacity delivery, a 20% average renewal premium on GPUs, and the completion of a $20 billion at-the-market equity program at $19.9 billion as positives, and named the Oct. 28 Financial Analyst Day as the next major catalyst for reassessing the rating.

Morgan Stanley cut its price target on Chewy to $36 from $37 while maintaining an Overweight rating, calling the stock's 11% sell-off on earnings day an overreaction in a note titled Managing Through the Treat-cession. Chewy's Q2 fiscal 2026 net sales of $3.33 billion grew 7.3% year over year, but organic growth was 5.7% after stripping out contributions from the SmartPak and Modern Animal acquisitions, decelerating approximately 120 basis points from Q1. The EBITDA beat included roughly $15 million in one-time items, and excluding those, the midpoint of fiscal year 2026 EBITDA guidance decreased by approximately 6 basis points, while stock-based compensation jumped 17% quarter over quarter. Morgan Stanley sees weakness stabilizing at roughly 6% organic growth and views the redesigned Chewy+ membership program, launching very shortly, as the key catalyst that could drive fiscal 2027 top-line acceleration. The firm's DCF yields a $36 base case, a $55 bull case requiring 8% revenue growth and 13% margins, and a $14 bear case assuming 4% revenue growth.

Foreign capital continues to flow out of the Indian stock market, with foreign funds selling a net 25 billion dollars of Indian shares so far this year and shifting money into markets such as Taiwan and South Korea, which stand to benefit more from the investment wave in artificial intelligence, or AI. Foreign investors have also cut their holdings of companies listed on the National Stock Exchange of India to the lowest level in 17 years, while some fund managers have reduced their allocation to Indian stocks to 0%, citing weak earnings, elevated valuations, and the lack of a large AI investment theme. Bloomberg reported today that Reed Capital Partners exited its entire Indian equity portfolio about one month ago, while fund managers at Janus Henderson Investors and Vantage Point Asset Management also cut their India allocations to 0% over roughly the past year. Indian stocks also remain expensive relative to other emerging markets, with the Nifty 50 trading at about 17.6 times forward earnings estimates and a valuation premium of 77% over the MSCI Emerging Markets index, while India's weight in the MSCI Emerging Markets index has fallen to about 11% this year from 16% in 2025. Domestic investors have also helped absorb foreign selling, buying a net 60 billion dollars of shares this year, according to data from the Bombay Stock Exchange, while Morgan Stanley expects the BSE Sensex to rise 19% to 89,000 points by June 2027 under its base case, with a bull-case target of 100,000 points.

JPMorgan Chase & Co has terminated its prime brokerage lending relationship with Leopold Aschenbrenner's hedge fund, Situational Awareness, following record-setting losses tied to a broader downturn in artificial intelligence stocks, according to the Financial Times. The fund suffered the largest dollar loss in hedge fund industry history during a sharp July sell-off, losing 67% of its assets that month before offloading the bulk of its public market positions to Ken Griffin's Citadel, which left it up 80% on the year at the end of July. Aschenbrenner has since pivoted toward boutique prime broker Clear Street to rebuild market access, while Morgan Stanley held early discussions with the fund after its launch but ultimately declined to establish a banking relationship. In a letter to investors following the summer liquidation, Aschenbrenner vowed to reboot the hybrid public-private strategy under a more conservative risk model that limits leverage exposure. The fund is now deploying customized flex options on semiconductor manufacturers including AMD, Intel, SK Hynix, and SanDisk, alongside AI infrastructure providers like CoreWeave, allowing magnified equity exposure while capping downside to pre-paid premiums.

Tesla climbed approximately 0.7% to $365.865 on Friday as Morgan Stanley argued investors may be overlooking the earnings potential of the Semi's autonomous software. The firm estimates a fully autonomous Semi could command a Full Self-Driving subscription of $12,000 to $18,000 per month, far above the roughly $100 charged for consumer vehicles. Its 2040 scenario includes 82,000 Semis generating $17 billion in subscription revenue and $7.5 billion in earnings before interest and taxes, implying an EBIT margin of roughly 44%. Tesla began volume production in May and is targeting annual capacity of 50,000 trucks. Diesel prices nearing $6 a gallon sharpened the financial case for the electric truck, though Tesla must still deliver commercial heavy-truck autonomy to turn the vision into an actual business.

Morgan Stanley downgraded Novo Nordisk to Underweight from Equal-weight, sending the shares down 1.23% in premarket trading and 2% in Copenhagen, while keeping a 250 DKK target that implies more than 10% downside. Analysts led by Thibault Boutherin wrote that the valuation does not entirely reflect subdued mid-term growth or the implications of the semaglutide patent cliff on Novo's terminal value. Semaglutide, the ingredient in Ozempic and Wegovy, accounted for 75% of sales in 2026 and is modeled at 59% in 2031, when loss of exclusivity starts to bite across Europe and the US. The bank sees the oral obesity franchise reaching $10 billion by 2031, which it says won't offset pricing and competitive headwinds, and forecasts 2% to 3% revenue and EBIT growth in 2027 and a 4% compound annual rate through 2030, against 4% revenue and 7% EBIT growth for European pharma generally. A Morgan Stanley survey of 200 primary care physicians pointed to share losses to Eli Lilly over the next 18 months, including retatrutide expected in 2027.

OpenAI finalized a $122 billion capital raise at an $852 billion post-money valuation on March 31, 2026, a round the company frames as its transition from experimental model lab to foundational infrastructure utility. The headline figure is a hybrid assembly of vendor compute commitments, contingent capital, and traditional equity rather than simple cash: NVIDIA's $30 billion contribution is weighted toward hardware and compute access, while Amazon's $50 billion commitment acts as a ceiling tied to milestones such as AGI development or an IPO by year-end. Amazon joins NVIDIA and SoftBank as an anchor investor, reshaping the landscape alongside Microsoft, which remains a core partner with over $13 billion in prior cumulative investment. The round drew more than $3 billion in retail participation and inclusion in three ARK Invest ETFs, and is paired with a $4.7 billion revolving credit facility backed by an 11-bank syndicate including JPMorgan, Citi, and Goldman Sachs. OpenAI reports 900 million weekly active users and a $25 billion annualized run rate, up from $6 billion at the end of 2024, supported by the March 2026 launch of GPT-5.4; CFO Sarah Friar has shifted the IPO to 2027, and a confidential S-1 was filed on June 8, 2026 with Goldman Sachs and Morgan Stanley.

Morgan Stanley closed at $212.66, down 1.25% from the prior session, a steeper decline than the S&P 500's 0.59% loss, while the Dow fell 0.6% and the Nasdaq dropped 0.65%. The investment bank is scheduled to report earnings on October 14, 2026, with analysts projecting earnings per share of $3.01, a 7.5% increase from the same quarter last year, and revenue of $19.88 billion, up 9.07% year over year. For the full year, the Zacks Consensus Estimates call for earnings of $12.8 per share and revenue of $81.87 billion, representing year-over-year changes of +25.37% and +15.89%, respectively. Over the past month, the Zacks Consensus EPS estimate has risen 0.04%, and Morgan Stanley currently holds a Zacks Rank of #2 (Buy). The stock trades at a Forward P/E ratio of 16.83, a premium to its industry's 14.53, and carries a PEG ratio of 1.49 versus the Financial - Investment Bank industry average of 1.06.

Morgan Stanley initiated coverage of Coinbase at Equal Weight with a $250 price target, saying the crypto platform has broadened well beyond its exchange roots but remains tied to the volatile crypto cycle. Analyst Michael Cyprys said the target implies about 40% upside from current levels, but a wide $50-to-$400 range of potential outcomes justifies a neutral stance. Cyprys noted Coinbase has evolved from a Bitcoin-only venue into a full-stack platform spanning retail and institutional trading, custody, stablecoins, derivatives, staking, payments and onchain infrastructure, ending the second quarter with 7.6 million monthly transacting users and $246 billion of assets on the platform. He forecasts a cyclical reset in 2026, a sharp rebound in 2027 and normalization in 2028, when he expects about $3.0 billion of adjusted EBITDA, with his price target based on 21 times that estimate. Retail crypto trading, at about 40% of revenue, remains the key swing factor, and Cyprys said regulatory clarity, the company's Everything Exchange push into assets such as equities and prediction markets, and its stablecoin and Base infrastructure all expand its addressable market, though they also invite more competition and gradual pricing pressure.

U.S. producer prices increased 0.4% in August, in line with expectations, as energy costs rebounded, the Labor Department's Bureau of Labor Statistics said Thursday. The Producer Price Index for final demand followed an upwardly revised 0.1% gain in July, and in the 12 months through August the PPI advanced 5.4%, up from a 4.8% rise in July. Energy prices increased 4.2% over the month as renewed hostilities between the United States and Iran boosted oil prices, while wholesale food prices edged up 0.1% and services prices nudged up 0.1%. Beginning in August, the government is changing how it calculates prices for portfolio management and investment advice services, legal services, and computer software and accessories, and Morgan Stanley economists estimated the methodology revamp could revise the 12-month and six-month annualized rates of core PCE inflation through July down to roughly 3.1% and 3.2%, respectively, from 3.3% and 3.5% currently. Ahead of the PPI report, financial markets saw a roughly 62% chance of a 25-basis-point rate hike at the Fed's September 15-16 meeting, with the benchmark overnight interest rate currently in the 3.50%-3.75% range.

With long-term US Treasury yields at or near multi-year highs, invisible hedging trades are amplifying price moves. The US Treasury expanded its bond buybacks in an effort to curb borrowing costs, but upward pressure on rates from inflation concerns and a swelling fiscal deficit has outweighed that effect. Traders wary of further yield increases are hedging their portfolios through option purchases, and one recent notable trade was a large position betting that the 30-year yield would rise to about 5.7%, roughly half a percentage point above its current level. The sellers of these options must also sell futures or enter into swaps paying fixed rates to profit when rates rise, and trades known as convexity hedging and delta hedging can push swap rates higher and amplify market moves. Sean Zhou, a rates strategist at Morgan Stanley, noted that with yields at high levels, "some risks remain that are difficult for dealers to hedge," adding that "the response will likely be to keep delta hedging as rates rise." Convexity hedging is also taking place among mortgage investors and in the options market, and Zhou said "they are each reacting to the market environment as independent players, and both are of considerable size." In a rising rate environment, homeowners refinance less, so investors hold mortgage-backed securities longer than expected, and moves to sell bonds or enter swaps paying fixed rates to hedge this risk could add to upward pressure on benchmark Treasury yields. Because the Federal Reserve has reduced its holdings of mortgage-backed securities in recent years, "more convexity risk now sits with the private sector," Barclays strategists said in a report dated the 3rd. Meanwhile, a JPMorgan Chase survey of US Treasury clients published on the 9th showed that with yields near multi-year highs, bond investors are reducing short positions and shifting to a neutral stance, with the share of short positions falling 6 percentage points in the week through the 8th and neutral positioning rising by the same amount, leaving clients' net long positioning at its highest level since November 2025.

India's National Stock Exchange (NSE) is likely to price its initial public offering (IPO) at 1,700-1,785 rupees per share, lower than the previously planned range of 2,000-2,100 rupees, and may reduce the stake on offer from 6% to about 5.5% of total capital after some shareholders withdrew. If priced at the top of the range, the sale of a 5.5% stake would raise about 243 billion rupees, or $2.6 billion, lower than the record 279 billion rupees raised by Hyundai Motor India in 2024, and would give NSE a valuation of about 4.42 trillion rupees, down from the earlier target of 5.26 trillion rupees. The downsizing reflects concerns that India's primary market may not be able to handle multiple large deals at once, with Jio Platforms also preparing a large IPO. According to Bloomberg data, since the start of 2026, Indian companies have raised nearly $10 billion through IPOs, compared with over $20 billion per year in the previous two years. NSE is expected to announce the IPO price range within this week and open for subscription in the week starting September 14. All shares are an offer for sale (OFS), and SEBI approved the draft prospectus on September 4. Selling shareholders include Morgan Stanley, Temasek, State Bank of India, and others.