October IPO beckons for Anthropic as US jobs stoke rate bets

Artificial intelligence giant Anthropic has an October initial public offering in its sights, with reports that the Claude developer could file its papers in the coming weeks and complete a listing before the US mid-term elections in November.

Stronger than expected jobs growth in the US stoked bets that the Federal Reserve will hike its benchmark interest rate later this month, with the robust labour market providing scope for a move higher ahead of key inflation data this week.

Oil prices remained elevated heading into the weekend, with US and Iran trading strikes and US energy secretary Chris Wright saying tankers will need naval escorts through the Strait of Hormuz for some time yet.

With Wall Street closed on Monday on the Labor Day public holiday, markets are expected to be subdued in Australia and New Zealand with ASX futures pointing to a flat start to the week.  

Gaining pace

Anthropic is expected to start marketing its IPO targeting a valuation of as much as US$2 trillion in mid-October, with the Financial Times reporting the AI giant was close to tapping Morgan Stanley and Goldman Sachs to lead the offering. Paperwork could be filed as early as this week, with Reuters reporting that a listing could be completed before the US midterm elections on Nov 3.

Meanwhile, rival OpenAI said its agents took over wiki sites and used them as message boards, with the ChatGPT maker saying more transparency was needed about those types of incidents. Separately, the Seattle Times and Newsday sued OpenAI and Microsoft on Friday in the US, claiming the tech companies copied the news organisations’ copy to train their AI models without permission.

And Taiwan contract electronics maker Foxconn said AI-related demand continued to drive sales and was expected to deliver a better-than-expected third quarter result.

Chipmakers were among Wall Street’s gainers on Friday, with Nvidia and Intel both on the green side of the ledger in a broadly softer day to the US stock market.

Bureau of Labor Statistics figures on Friday showed the world’s biggest economy added 162,000 jobs last month, more than twice the 55,000 forecast by economists. The strong reading fuelled expectations that the Fed will have room to raise the federal funds rate later this month if this week’s inflation reading comes in hot, with the CME FedWatch tool showing markets pricing in a 59% chance of a hike.

“A better-than-expected US jobs report contributed to higher front-end Treasury yields while equities made modest losses as markets priced a higher chance the Federal Reserve will raise rates this month,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “The rebound looks more like payback after two weak months and the reversal of seasonal distortions than a sustained acceleration, with the three-month average still modest at 71,000.”

The yield on US 10-year treasuries rose 3 basis points to 4.79%, matching its New Zealand equivalent, while the kiwi dollar traded at 58.81 US cents at 7am in Auckland from 58.96 cents last week.

Portfolio management

Meanwhile, Norway’s US$2.4 trillion sovereign wealth fund proposed cutting its holding of government bonds to 50% of its benchmark bond index from 70% to diversify its sources of returns.

Stocks on Wall Street were broadly weaker, with Apple, Microsoft and Salesforce leading a 0.5% decline for the Dow Jones Industrial Average, while the S&P 500 dipped 0.4% and the tech-heavy Nasdaq Composite decreased 0.3%.

US markets are closed on Monday for Labor Day.

Brent crude oil futures rose 0.3% to US$95.83 a barrel heading into the long weekend, with more retaliatory strikes between the US and Iran on Saturday as the conflict remains elevated.

Meanwhile, US energy secretary Wright told CNN’s State of the Union programme that ships going through the Strait of Hormuz would need a naval escort for some time, with the region delivering about two-thirds of pre-conflict flow.

European stock markets were mixed on Friday, with the UK’s FTSE 100 fractionally weaker, while Germany’s DAX up 0.2% and France’s CAC 40 dipping 0.1%.

Ukraine President Volodymyr Zelenskyy said the war with Russia would likely drag on through the winter after talks with US negotiators seeking to broker a peace deal with Russia.

Australian futures are pointing to a 0.1% decline for the S&P/ASX 200 index when trading opens across the Tasman, with investors watching for any sign that the latest Middle East escalation would lift oil prices.

No local data is scheduled, while NZX-listed companies going ex-dividend include Michael Hill International, NZ Rural Land Co and Stride Property Group.

Reporting by Paul McBeth. Image from Planet Volumes on Unsplash.