Tag Archives: US indices

Technology Stocks Push Indices Higher

Technology Stocks Push Indices Higher: Gains in significant technology stocks helped lift U.S. equity indices,
Investors brushed off weak economic data and focused instead
on expectations of interest rate cuts—just ahead of President Donald Trump’s planned tariffs.

In a highly volatile session, the S&P 500 recovered from a 1% drop caused by weak manufacturing and employment data,
Meanwhile, the Magnificent Seven index ended a four-day losing streak. 

 

Contents

Market Bets
Investor Caution

Trump Tariffs

Forecast Revisions

Bonds Back in Focus
Shift to Safety Amid Rising Risks

Conclusion

 

 

 

 

Market Bets Rise Amid Tariff Anticipation and Policy Shifts

In parallel, U.S. Treasury yields declined as investors increased
their bets that the Federal Reserve would ease monetary policy despite rising price indexes
Meanwhile, the Canadian dollar and Mexican peso rose following reports
of a “productive” phone call between the leaders of Canada and Mexico concerning trade relations.

With markets bracing for the upcoming tariffs expected from President Trump,
uncertainty continues to dominate the scene.
This has led some economists to downgrade their growth forecasts,
while central banks are beginning to factor in the potential inflationary effects of higher import costs.

Trump’s spokesperson confirmed that the broad tariffs
are set to take effect immediately upon their announcement on Wednesday.

 

Investor Caution Ahead of “Liberation Day”

Fawad Razaqzada of City Index and Forex.com said:
“Sentiment remains fragile ahead of the tariff day,”
noting that “with continued uncertainty around the scope of the measures,
Investors are expected to remain cautious.”
 He added that the short-term outlook for equities remains highly uncertain.

At the close of trading, the S&P 500 was up 0.4%,
the Nasdaq 100 rose by about 0.8%, and the Dow Jones Industrial Average experienced notable swings.

The yield on the 10-year U.S. Treasury fell by four basis points to 4.17%,
with little change observed in the U.S. dollar.

 

Trump’s Tariffs and the Return of Protectionism Debate

Trump is preparing to announce what he calls “reciprocal tariffs” on “Liberation Day.”
This move is expected to target a broader range of global trade than the historic Smoot-Hawley Tariffs of 1930.

These new tariffs are part of Trump’s broader effort to reshape the global trade order,
which he believes has been unfair to Americans.

However, analysts at HSBC, led by Max Kettner,
suggested that “Liberation Day” may not end the uncertainty surrounding tariffs.
It could deepen the ambiguity and exert further pressure on key market indices.

 

 

 

 

Forecast Revisions… But No Market Collapse

Three leading Wall Street analysts—Goldman Sachs, Société Générale, and Yardeni Research
have downgraded their year-end targets for the S&P 500.
However, they expect the index to close the year higher than its current level,
suggesting markets are not heading for a full-blown collapse.

Despite their warnings of a potential slowdown,
driven by Trump’s policies and effect on consumer confidence and growth,
all analysts tracked by Bloomberg still forecast gains for the S&P 500 by year-end.
 Technology stocks push indices higher again, as tech remains one of the few sectors maintaining investor confidence.

 

Bonds Back in Focus Amid Portfolio Shifts

Investors have started reshuffling their portfolios in
anticipation of a rebound in U.S. bonds following signs of slowing growth.
Yields on 10-year Treasuries have dropped by around half a percentage point from their January peak.

Barclays analysis shows that trend-following hedge funds recently shifted
into short positions in U.S. equities and long positions in bonds.
This move could gain momentum in the coming months.

PIMCO Asset Management believes that the risk of a U.S. recession is increasing,
making fixed-income assets more attractive, particularly in global markets.

 

A Shift Toward Safety as Risks Mount

PIMCO warns that Trump’s aggressive trade, spending cuts,
and immigration policies could deepen the U.S. economic slowdown and negatively affect the labor market,
pushing more investors toward safe-haven assets.

In an analytical note, Tiffany Wilding and Andrew Balls from PIMCO wrote:
 “There is a strong case for diversifying away from overvalued U.S.
equities toward a broader mix of high-quality global bonds.”

They added that the markets are in the early stages of a multi-year cycle
in which fixed-income instruments may outperform equities, offering investors a more balanced risk-reward profile.

 

Conclusion

Technology stocks push indices higher in the face of uncertainty,
showing continued resilience despite macroeconomic headwinds.
While other sectors face volatility and shifting forecasts,
tech remains a stronghold for investors navigating today’s complex market landscape.

 

 

Technology Stocks Push Indices Higher

U.S. Stocks Rise with Expectations of Significant Rate Cuts

U.S. Stocks Rise with Expectations of Significant Rate Cuts: U.S. stocks experienced a slight increase as traders analyzed the remarks of Federal Reserve policymakers
and anticipated further monetary easing following a half-point rate cut last week.

 

Contents

Performance of Indices and Stocks

Economic Data

Bolder Bets on Rate Cuts

Monetary Policy Decisions

Manufacturing Data in Europe

Asian Markets

 

 

 

 

Performance of Indices and Stocks

The S&P 500 index rose by 0.3%, nearing its all-time high recorded last week,
following statements from Federal Reserve officials regarding the central bank’s monetary policy.
As a sign that market gains may widen,
equal-weighted stocks within the benchmark index increased by 0.5%,
closing at a record level and granting companies like Bath & Body Works the same impact as Nvidia.
The Dow Jones Industrial Average also hit a record high,
while the Nasdaq 100 rose by 0.3%.
Intel’s shares jumped by 3.3% among individual companies
after reports of a multi-billion dollar investment offer from Apollo Global Management in the chipmaker.
Boeing’s shares increased by about 2% after presenting improved deal terms for striking workers.

 

Economic Data

Data showed that business activity in the U.S. remains strong despite slowing growth,
boosting confidence in the potential for a soft economic landing.
According to data released Monday,
business activity grew slightly slower in early September,
while expectations fell and the price index rose to its highest level in six months.
Adam Crisafulli from Vital Knowledge stated,
“This report is somewhat inconclusive and should not significantly alter the Fed’s expectations.
Preliminary purchasing manager indicators suggest
that the U.S. economy is in fairly good shape,
especially compared to Europe.”

 

Bolder Bets on Rate Cuts

Traders are betting on a monetary policy easing nearly three-quarters of a point by the end of the year,
indicating that at least one more significant rate cut is on the way.
Chicago Fed President Austan Goolsbee mentioned
that as inflation approaches the central bank’s target,
the focus should shift to the labor market,
likely resulting in more rate cuts next year.
Minneapolis Fed President Neel Kashkari noted the weakness in the labor market,
supporting another half-point rate cut by year-end.
In contrast, Atlanta Fed President Raphael Bostic took a more moderate stance,
stating that starting the cut cycle with a large step would help bring rates closer to neutral levels.
Still, officials should not commit to aggressive movements.

 

 

 

Monetary Policy Decisions

Later this week, investors will receive data on the Fed’s preferred price index and U.S. personal spending,
scheduled for release on Friday.
The yield on two-year Treasury bonds, influenced by monetary policy decisions,
declined to 3.58%, while little change occurred in long-term bonds.
U.S. government bonds were under pressure
as the Treasury Department prepared to issue $183 billion in short-term
offerings and new issuances of up to $25 billion in corporate bonds expected this week.
Chris Larkin from E*Trade, a Morgan Stanley affiliate, stated,
“With the first rate cut by the Fed since 2020 now on record,
many investors might wonder: ‘What now?’ This will keep the focus on economic growth,
especially in the labor market.”

 

Manufacturing Data in Europe

In Europe, the euro declined while European stocks
recorded slight gains following weak purchasing manager index data from France and Germany,
which showed that the private sector economy
in the Eurozone contracted for the first time since March.
The euro fell by up to 0.7% against the dollar amid
bets on bolder rate cuts from the European Central Bank.
Maria Vitman, Chief Multi-Asset Strategist at State Street,
stated on Bloomberg TV, “The market is almost demanding a more aggressive rate cut,
especially after what we’ve seen from the Fed.”
She added that the European Central Bank is “certainly behind the curve.”

 

Asian Markets

Elsewhere, Asian markets rose amid speculation that China
is on the verge of announcing a new stimulus package
following a short-term rate cut and a rare economic briefing scheduled for Tuesday.
Gold reached a new record level as the conflict in the Middle East escalated,
increasing bets on rising prices as it is considered a haven.
U.S. oil and gas stocks outperformed in the market.

 

 

U.S. Stocks Rise with Expectations of Significant Rate Cuts

Stock Fluctuations in the Last Minutes of the Big Options Day

Stock Fluctuations in the Last Minutes of the Big Options Day: U.S. stocks lost momentum by the end of Friday’s session as the positive sentiment following
the Federal Reserve’s half-percentage-point interest rate cut faded.
Expiring derivatives contracts and significant rebalancing contributed to increased market volatility.

 

Content
Fluctuations Between Gains and Losses
Quarterly Triple Witching Event
Stock Fluctuations

The Federal Reserve
Differing Viewpoints
Bonds and Gold
New Data

Key Market Movements

 

 

 

 

Fluctuations Between Gains and Losses

After fluctuating between gains and losses in the final minutes of trading,
both the S&P 500 and Nasdaq 100 indices ended the session down by 0.2%,
with the broader index setting a new record high for 2024.
Meanwhile, the Dow Jones Industrial Average gained 0.1%,
setting a record closing level.
More than 20 billion shares were traded on U.S. exchanges,
marking the busiest session since January 2021.

 

Quarterly “Triple Witching” Event

Friday saw the quarterly “Triple Witching” event,
where $5.1 trillion worth of stock, index options, and futures contracts expired,
according to an analysis firm Asym 500 estimate.
An additional $250 billion in index trades were also absorbed.
This event is known for causing sudden price movements as traders renew existing positions or open new ones.

 

Stock Fluctuation

Despite U.S. stocks extending gains for the second consecutive week,
disappointing earnings reports weighed on the market.
FedEx Corp. shares fell 15% after missing profit expectations and warning of a business slowdown.
Meanwhile, Lennar Corp.’s stock dropped after quarterly home orders fell below Wall Street estimates.
Among the gainers was Intel Corp.
after a report hinted at a possible acquisition by Qualcomm.
At the same time, Constellation Energy Corp.
the largest U.S. operator of nuclear reactors
reached a record high with plans to restart the Three Mile Island reactor.

 

The Federal Reserve

Confidence is growing that the Federal Reserve will manage a soft economic landing,
though warnings like those from FedEx highlight ongoing concerns.
Federal Reserve policymakers expect an additional half-point cut this year.
Krishna Guha of Evercore ISI wrote,
“It is unlikely that the continuous risk rally will persist amid
the uncertainty that may occur during the election.”
He added, “Investors should consider the gains after
the Federal Reserve’s decision as an initial boost,
with further gains to come after Election Day.”
Guha believes that another half-point cut could be possible
if labor or inflation data comes in weak.
Gold hit an all-time high as traders considered
the possibility of further monetary easing from the Federal Reserve.

 

Differing Viewpoints

Traders also weighed the differing perspectives of Federal Reserve officials
regarding consumers’ purchasing power.
Christopher Waller told CNBC that positive inflation data convinced
him to support the half-point rate cut.
Meanwhile, Michelle Bowman, the sole dissenting voice on the large rate cut,
expressed concern that the move might declare victory over inflation too early.
At the same time, JPMorgan CEO Jamie Dimon expressed
skepticism about the world’s largest economy avoiding a recession during slowing growth.
Dimon said at an event, “I hope that’s true,
but I’m also more skeptical that inflation will disappear that easily,
not because it hasn’t dropped – it has – but because it may drop further.”

 

Bonds and Gold

Gold traded above $2,600 an ounce,
extending its gains after an Israeli strike on the outskirts of Beirut.
At the same time, the U.S. dollar index rose,
while Treasury bond performance varied.
Michael Hartnett of Bank of America believes
that the optimism in stock markets following the Federal Reserve’s
the decision could increase bubble risks,
making bonds and gold attractive hedges against a recession or renewed inflation.
He added that stock markets are now pricing in more monetary easing,
with expectations for S&P 500 company profits to increase by 18%
by the end of 2025.
Hartnett wrote in a note, “Risks don’t get much better than this,
so investors are forced to chase the rally.”
He also noted that non-U.S. stocks and commodities were good ways
to deal with a potential soft economic landing,
with the latter acting as a hedge against inflation.
International stocks are cheaper and outperform their U.S. counterparts.

 

New Data

Investors will receive fresh data next week on the Purchasing Managers’ Index (PMI),
Gross Domestic Product (GDP),
and the Federal Reserve’s preferred inflation gauge (PCE).
Several Federal Reserve officials, including Raphael Bostic and Austan Goolsbee,
are also scheduled to give speeches.

 

Key Market Movements

Stocks

The S&P 500 fell by 0.2%
The Nasdaq 100 fell by 0.2%
The Dow Jones Industrial Average was mostly unchanged

Currencies

The Euro was flat at $1.1161
The British pound rose 0.2% to $1.3316
The Japanese yen fell 0.9% to 143.91 yen per dollar

Cryptocurrencies

Bitcoin fell by 0.3% to $62,856.63
Ether rose by 3.1% to $2,543.12

 

 

Stock Fluctuations in the Last Minutes of the Big Options Day

Weekly Economic Insights

Weekly Economic Insights: Major Market Movers and Analysis: This week, markets are bracing for crucial economic events,
including interest rate decisions and critical financial data releases
that could significantly impact significant currencies, indices, and commodities.
Among the highlights are the Federal Reserve’s anticipated interest rate decision
and updated inflation data from the U.S., U.K., and Eurozone,
which will likely influence market sentiment and trading strategies.
This article provides a detailed analysis of the expected market movements,
focusing on significant instruments such as NASDAQ, EURUSD, GBPCAD, and the U.S. Dollar Index.

 

Content
Key Economic Events This Week

NASDAQ

EURUSD

GBPCAD

U.S. Dollar Index

NZDUSD

 

 

 

Key Economic Events This Week

Tuesday, September 17, 2024

15:30 USD Core Retail Sales (MoM) (August)  

15:30 USD Retail Sales (MoM) (August)  

Wednesday, September 18, 2024  

09:00 GBP Consumer Price Index (YoY) (August)  

12:00 EUR Consumer Price Index (YoY) (August)  

21:00 USD Federal Reserve Interest Rate Decision  

Thursday, September 19, 2024

14:00 GBP Bank of England Interest Rate Decision (September)  

15:30 USD Initial Jobless Claims  

Friday, September 20, 2024  

04:15 CNY PBoC Loan Prime Rate  

06:00 JPY Bank of Japan Interest Rate Decision  

 

NASDAQ

The NASDAQ index continued its upward trend during last week’s trading, reaching 19,514.
It is expected to continue these gains in the current week
as economic recession fears fade and inflation has reached 2.5%,
supporting the interest rate cuts and thus boosting U.S. stock gains.
The NASDAQ will face a minor resistance of around 19,923, which may witness some downward corrections.
However, if this resistance is breached, it could continue upward toward the year’s peak around 20,686 levels.

 

 

 

EURUSD

Expectations for U.S. interest rate cuts have risen again,
with a 50% probability for a 25 basis point cut and a 50% probability for a 50 basis point cut,
following recent inflation data indicating a significant decline to 2.5%.
This allows the Federal Reserve to start stronger rate cuts,
which has noticeably weakened the dollar against the euro,
leading to renewed gains despite the European Central Bank’s interest rate cuts.
The pair trades around 1.1071 after a false break of the 1.1029 level,
supporting further rises towards 1.1138 and then 1.1204.

 

 

 

GBPCAD

The GBPCAD is trading around 1.7832 after rebounding at the end of last week,
reaching the upper limit of the sideways range.
If it breaks the 1.7858 level and closes above it on a four-hour candle,
it could continue its upward movement toward the 1.8000 level.
Conversely, if a reversal price action occurs at the current levels,
A downward correction may start again towards the lower limit at around 1.7684.

 

U.S. Dollar Index

Expectations for the anticipated rate cut this week have risen to 50% in favor of a 50 basis point cut,
significantly weakening the U.S. dollar, trading around 101.11.
It is expected to continue its decline towards the annual low near 100.52,
If this level is broken, the decline may continue to 99 levels.

 

NZDUSD  

The NZDUSD is trading around 0.6157, above the major support level at 0.6128,
supporting upward movements from current levels,
especially with the expected U.S. dollar weakness ahead of this week’s anticipated rate cut.
If a 50 basis point rate cut occurs, the dollar could weaken significantly,
potentially pushing the NZDUSD up to 0.6254.
However, if it breaks the 0.6128 level and closes below it,
we might see a strong continuation of the decline towards 0.6028.

 

 

Weekly Economic Insights: Major Market Movers and Analysis

U.S. Stocks Rise Amid a Buying Frenzy After a Sell-Off

U.S. Stocks Rise Amid a Buying Frenzy After a Sell-Off: A new wave of buying U.S. stocks at lower prices has driven a rebound following a sell-off triggered by economic concerns.
Traders are awaiting inflation data this week to indicate the potential size of the Federal Reserve’s interest rate cuts.

 

Content

Rise of Major Companies

Slight Movements in Treasury Bonds

A Risky Situation

Signals from the Labor Market

Global Stock Sell-Off

The Role of Soft and Hard Landing

Anticipation of the Consumer Price Index Report

 

 

 

 

Rise of Major Companies

All major sectors within the S&P 500 index rose by about 1%. According to Bespoke Investment Group,
this increase followed the worst start to September since market data recording began in 1953.
Tesla and Nvidia led the gains among major companies.
Meanwhile, Apple launched its latest iPhone 16, which CEO Tim Cook stated
was designed to fully leverage artificial intelligence, but its stock fell by 1.8%.

Tom Essaye of The Sevens Report commented, “We often see technical buying when prices drop,” adding,
“Economic growth is undoubtedly losing momentum, but a soft landing remains more likely than a hard one.
This week, the focus returns to inflation.”

 

Slight Movements in Treasury Bonds

Treasury bonds saw slight movements, with the probability of a half-point rate cut
at the Federal Reserve’s September meeting, dropping 20% from 50% last week.
According to a survey by the Federal Reserve Bank of New York published on Monday,
inflation expectations in the U.S. remained stable while fears of a default increased.

The S&P 500 hovered near the 5,460-point level, while the Nasdaq 100 rose by 0.8%,
and the Dow Jones Industrial Average added 1.1%.
Boeing shares rose amid optimism that a labor agreement would prevent a strike.
At the same time, Google, a subsidiary of Alphabet,
returned to court to face allegations by the Justice Department that it was manipulating the digital advertising market.
Oracle is expected to announce its results later today, Monday.

 

A Risky Situation

Ten-year Treasury yields remained stable at 3.7%.
The dollar rose, and Bitcoinsurpassed the $56,000 mark.

Craig Johnson of Piper Sandler stated,
“Stock investors are navigating a risky situation between optimism
over potential Fed rate cuts and fears of recession and the political landscape.”
He added, “Technical analysis of common market averages suggests
that last week’s weakness was merely a pullback within a long-term upward trend.”

On the other hand, according to RBC Capital Markets strategists,
U.S. stocks may remain volatile.
They could see further declines in the near term amid risks associated with seasonality,
sentiment, and the upcoming presidential election.

A team of strategists led by Lori Calvasina wrote in a note that
“any additional damage would remain within the range of a 10% pullback.”
They added that if hard landing fears escalate,
the risk of a decline linked to growth concerns in the range of 14%-20% “would also increase.”

 

 

 

 

Signals from the Labor Market

With labor market data indicating a slowdown rather than an imminent recession,
HSBC strategists led by Max Kettner said they are increasing their additional positions
in U.S. stocks based on expectations of resilient earnings in the third quarter.

On Monday, Savita Subramanian, an equity and quantitative strategy analyst at Bank of America,
stated that heightened short-, medium-, and long-term volatility
would make investment-grade stocks and yields more attractive than their growth counterparts.
 She added, “Better the tortoise (quality and yields) than the hare (growth and revaluation),”
noting that utility stock yields equate to Nasdaq yields “over the long term.”
She also mentioned that utilities have outperformed technology stocks this year.

According to Citigroup strategists, last week’s sell-off
in U.S. stocks made the main indices more vulnerable to further declines.

A team led by Chris Montagu said that the broad-based stock sell-off,

especially in the S&P 500 index, signals a shift in risk appetite towards a more directly negative tilt.
The strategists noted that the closing of buy-and-sell operations
by hedge funds in the index left total investment exposure at half its previous peak in mid-July.

Hedge funds continued to reduce their positions in U.S. stocks,
with the S&P 500 experiencing its biggest weekly decline since March 2023.

 

Global Stock Sell-Off

Global stocks saw net sales for the eighth consecutive week, led by North America,
according to a report from Goldman Sachs Group’s prime brokerage desk for the week ending September 6.
This trend, which broadly began in May, has continued as funds liquidated positions
significantly to gain additional liquidity in anticipation of potential volatility surrounding the U.S. presidential elections.

Konstantinos Venetis of TS Lombard stated, “Slowdowns do not necessarily mean a recession,
and market corrections are not necessarily harbingers of a bear market.”
He added, “But increasing uncertainty on both the economic (growth)
and political (U.S. elections) fronts put additional pressure on near-term optimists.”

Venetis pointed out that while the U.S. Federal Reserve is ready to cut rates,
the question remains whether “precautionary cuts” will be too limited and too late.
He added, “The risk is that growth concerns gain their own momentum,
putting more pressure on the stock market, which already appears technically weak.”

 

The Role of Soft and Hard Landing

Seema Shah of Principal Asset Management believes that history indicates
the Fed’s success in achieving a soft landing versus a hard landing,
which will play a crucial role in determining the course of U.S. stocks.

For example, in 1985 and 1995, rate cuts supported strong stock gains while avoiding a recession.
In contrast, in 2001 and 2007, even aggressive easing was not enough
to prevent severe market declines amid economic slowdowns.

Shah said, “Today, markets remain cautiously optimistic,
reflecting hopes that rate cuts will avoid a recession.”
However, she warned, “If economic conditions deteriorate sharply,
recession fears could outweigh the benefits of rate cuts.
History shows that rate cuts are not the enemy themselves;
investors should focus on the economic context in which they occur.”

 

Anticipation of the Consumer Price Index Report

According to economists surveyed by Bloomberg,
a government report expected on Wednesday will show that the Consumer Price Index (CPI)

rose by 2.6% in August compared to the previous year.
This would be the lowest increase since 2021.
Under the traditional blackout period before the September 17-18 meeting,
Fed officials will not provide significant new guidance.

Chris Low of FHN Financial stated, “Inflation is important.”
He added, “Weaker numbers might encourage the Fed to cut rates by half a percentage point,
while any higher figures could limit the rate cut to a quarter point.
However, even if inflation moderates and prompts some participants to push for a larger cut,
we expect the Fed to settle on a quarter-point cut as an initial step,
with the option to move faster in future meetings if the data supports it.”

 

 

U.S. Stocks Rise Amid a Buying Frenzy After a Sell-Off

Stocks Hover as Traders Brace for Swings

Stocks Hover as Traders Brace for Swings: Global markets started the week cautiously as traders prepared for September, a challenging month for stocks.
With record highs hovering in the background, investors are bracing for potential volatility driven by economic data,
geopolitical concerns, and central bank actions.
In this market wrap, we explore the critical movements in global equities, currencies, commodities,
and the anticipated economic events that could shape the financial landscape in the coming days.

 

Content

European Market Highlights

Historical Trends and Market Sentiment

Economic Data and Rate Cut Expectations

Caution from JPMorgan Strategists

Currency Market Dynamics

Asian Market Concerns

Commodities Outlook

Summary of Key Market Movements

Conclusion

 

 

 

European Market Highlights

European stocks showed resilience on Monday, with the Stoxx 600 index recovering from earlier losses to remain near record highs.
Volkswagen AG saw a 1.3% rise following news of potential factory closures in Germany,
highlighting the ongoing adjustments in the manufacturing sector.

Meanwhile, Rightmove Plc surged 27% in London after Rupert Murdoch’s REA Group Ltd expressed takeover interest,
showcasing the dynamic nature of corporate activity within the region.

 

 

Historical Trends and Market Sentiment

September has traditionally been a difficult month for stocks,
a pattern that has persisted over the past four years.
Wall Street’s Cboe Volatility Index (VIX) has consistently risen each September since 2021,
signaling heightened market fear.
The upcoming US jobs report, scheduled for Friday,
is expected to be crucial in shaping expectations regarding
Federal Reserve rate cuts and the broader economic outlook.

 

Economic Data and Rate Cut Expectations

With the US election campaign gaining momentum,
traders increasingly focus on the Federal Reserve’s policy path.
Current market pricing suggests a one-in-four chance of a 50 basis-point cut in interest rates this month.
Fiona Boal, global head of equities at S&P Dow Jones Indices,
noted that while a rate cut is expected,
the markets will soon pivot to political concerns as the election draws nearer.

 

 

 

Caution from JPMorgan Strategists

JPMorgan Chase & Co. strategists warned that any equity rally could be short-lived even if the Fed pursues a rate cut.
Mislav Matejka and his team pointed out that easing policies might reflect slowing economic growth,
compounded by seasonal challenges typical of September.
The strategists emphasized a preference for defensive sectors amidst ongoing uncertainties.

 

Currency Market Dynamics

Currency movements reflected broader market anxieties.
The US dollar showed signs of recovery,
with strategists like Valentin Marinov from Credit Agricole CIB cautioning that markets
might be overly dovish ahead of the September Fed meeting.
Marinov suggested that the dollar could gain ground
if the Fed adopts a more cautious approach than currently anticipated.

 

Asian Market Concerns

In Asia, equities retreated amid growing fears over China’s economic health.
Persistent weakness in the property market is weighing on domestic demand,
posing a significant challenge for the region.
Hao Hong, chief economist at Grow Investment Group,
emphasized the need for more government intervention to stabilize the situation.

 

Commodities Outlook

In commodities, oil prices fluctuated as traders weighed conflicting signals,
including an upcoming production increase from OPEC+,
economic headwinds in China, and reduced output in Libya.
Gold prices saw minor declines, reflecting broader market hesitancy.

 

Summary of Key Market Movements

Stocks:

S&P 500 futures: Little changed

Nasdaq 100 futures: +0.1%

Currencies:

Euro: +0.2%

British Pound: +0.2% to $1.3147

Japanese Yen: -0.5%

Cryptocurrencies

Bitcoin: Stable at $58,433.79

Ether: +0.8%

Commodities:

WTI Crude: +0.7% to $74.04 a barrel

Spot Gold: -0.2% to $2,499.51 an ounce

 

Conclusion

As markets continue to navigate this complex landscape,
traders remain on high alert for any signals that could prompt significant shifts in sentiment.
The coming weeks promise opportunities and risks
as the global financial community adjusts to the ever-evolving economic environment.

 

Stocks Hover as Traders Brace for Swings

S&P 500 Index Rises for the Fourth Consecutive Month

S&P 500 Index Rises for the Fourth Consecutive Month: Global financial markets continue to experience ongoing fluctuations that impact the movement of stocks and indices.
The S&P 500 index is at the forefront of these indicators,
affected by economic and political volatility. In this report,
we review the performance of the U.S. markets in August
and look ahead to what investors can expect in the upcoming month of September,
traditionally considered one of the toughest months for stocks.

 

Contents

Performance of U.S. Indices in August

A Historical Look at September’s Performance

Seasonal Challenges of September

Election Year and Its Impact on Markets

Future Expectations and Economic Challenges

Conclusion

 

 

 

 

Performance of U.S. Indices in August

U.S. stock indices experienced a late recovery at the close of August trading,
with the S&P 500 rising by 1% in the last ten minutes of trading.
This positive performance marks the fourth consecutive month of gains,
reflecting resilience in the U.S. economy despite global fluctuations.
With this increase, investors are now focusing on the upcoming
Federal Reserve meeting in September, which may include a decision to cut interest rates.

 

A Historical Look at September’s Performance

Historically, September is considered one of the worst months for U.S. stocks.
Since 1950, the S&P 500 has experienced an average drop of 0.7%,
closing positively only 43% of the time.

In the past four years, the index has seen notable declines during this month.
This trend is partly attributed to investors returning from summer holidays,
often reassessing their portfolios with a defensive approach.

 

Seasonal Challenges of September

Data analysis shows that the average actual volatility
of the S&P 500 in September historically exceeds that of August by 1.5 points.
Companies also face challenges at the end of the third quarter
as they enter periods that restrict stock buybacks,
potentially affecting their ability to support stock prices.
These challenges come as markets prepare for crucial economic data releases,
such as the monthly jobs report.

 

 

 

 

Election Year and Its Impact on Markets

As 2024 approaches its end, a year that includes a U.S. presidential election,
concerns about market performance are intensifying.
Historically, the Dow Jones has performed poorly in
September during election years compared to non-election years,
adding pressure on investors closely monitoring market and economic developments.

 

Future Expectations and Economic Challenges

With expectations of interest rate cuts and continued improvement in economic data,
many investors hope that concerns about recession and inflation will ease.
Attention remains focused on the monthly jobs report,
which could play a pivotal role in determining market direction in the coming period.
If the data shows improvement, it could help alleviate short-term recession fears.

 

Conclusion

As September approaches, investors remain vigilant and watchful of market developments.
Despite seasonal difficulties and economic challenges,
there is still optimism that markets can overcome these hurdles and continue to perform positively.

 

S&P 500 Index Rises for the Fourth Consecutive Month

 

Key Events and Market Movements

Key Events and Market Movements: This week brings key economic data and market developments that could significantly impact trading.
From economic releases in Europe and the U.S. to movements in gold, oil, and major currency pairs,
staying updated is crucial for navigating the market effectively. Here’s a quick overview of what to watch.

 

Content

Economic Calendar
Gold

Oil

USDJPY

EURUSD

Nasdaq

 

 

 

 

Economic Calendar

Tuesday, August 27, 2024

09:00 EUR: German GDP (Quarterly) (Q2)

17:00 USD: CB Consumer Confidence Index (August)

Wednesday, August 28, 2024

17:30 USD: U.S. Crude Oil Inventories

Thursday, August 29, 2024

11:00 EUR: CPI (Monthly) (August)

11:00 EUR: CPI (Yearly) (August)

15:30 USD: GDP (Quarterly) (Q2)

Friday, August 30, 2024

12:00 EUR: CPI (Yearly) (August)

15:30 USD: Core PCE Price Index (Monthly) (July)

15:30 USD: Core PCE Price Index (Yearly) (July)

 

Gold

Gold is trading around levels of 5,224, close to its historical peak of 2,531.
The strong upward movement in gold continues during the current period,
with an anticipated interest rate cut in September, expected to be by 25 basis points.
Gold is expected to achieve new historical highs, potentially targeting the 2,531 level,
followed by a downward correction to retest the 2,484 level before rising again to target the 2,553 level.

 

Oil

Oil has returned to positive trading; however, concerns about reduced demand from China continue to heavily influence the markets.
Currently, oil is trading at 75.60, close to the resistance level of 75.69.
Breaching this resistance could lead to further gains, with targets at 77 dollars and 78.69. On the other hand,
if a reversal signal emerges near the current levels, a decline to retest the 72.5 level is more likely.

 

 

 

 

USDJPY

The USDJPY pair returned to downward trading after Jerome Powell’s speech at last week’s Jackson Hole conference.
Powell mentioned that a rate cut is now possible and hinted at the beginning of a rate cut in September.
This is expected to support the dollar-yen pair.
Technically, the USDJPY trades around 143.86 after breaking below the sideways range,
supporting continued downward trading toward the 140.21 level.

 

EURUSD

The euro remains strong against the U.S. dollar,
the EUR/USD pair is achieving a new high near the 1.1200 level for the year.
The upward movement is expected to continue,
targeting the 1.1279 level as long as trading remains above the 1.1150 level,
especially with the continued weakness of the U.S. dollar.

 

Nasdaq

U.S. stock indices continue to rise strongly, with the anticipated rate cut expected to support U.S. companies.

Nasdaq is trading at levels of 19,720
after fully absorbing the recent downward wave and closing above the resistance level of 19,472,
retesting it, which supports the continued upward movement towards the peak of around 20,686.

 

Key Events and Market Movements

 

Wall Street Recovers as Powell Confirms Interest Rate Cut in September

Wall Street Recovers as Powell Confirms Interest Rate Cut in September: As anticipation builds around the Federal Reserve’s monetary policy decisions,
Jerome Powell, the Fed’s Chairman, has confirmed the central bank’s inclination to cut interest rates in September.
These statements have ignited the financial markets, with U.S. stock indices rising significantly while bond yields have dropped sharply.
In this report, we examine the impact of Powell’s statements on the markets and experts’ expectations for future monetary policy.

 

Content

Wall Street Recovery  

Powell’s Message  

Expert Reactions  

Risks of Large Rate Cuts  

Impact of September Jobs Data  

Pace of Rate Cuts  

Federal Reserve’s Actions  

Possibility of Strong Rate Cuts  

Rate Cut Expectations According to Experts 
Importance of September Jobs Data

 

 

 

 

Wall Street Recovers as Rate Cut Expectations

U.S. stock indices rose across all categories, and bond yields fell after Jerome Powell
gave the most unambiguous indication yet that the Federal Reserve will begin cutting interest rates in September.
While Wall Street had already anticipated the start of monetary easing next month,
Powell’s remarks that “the time has come” confirmed these expectations.
Additionally, many other aspects of his Jackson Hole speech should not be overlooked.
For instance, the Fed Chairman acknowledged recent progress in fighting inflation.
He also noted that the economy is growing “at a strong pace,” providing reassurance after recent concerns about growth.

 

Powell’s Message and Its Impact on Markets

However, Powell’s focus on the “calm labor market” captured the attention of many market observers.
This was largely seen as a signal that the Federal Reserve would

do whatever it took to avoid a noticeable slowdown.

 

Expert Reactions to Powell’s Speech

Chris Zaccarelli of the Independent Advisor Alliance said,
“The market should be pleased with this speech because it was not hawkish in any way.
It gave the green light for a 25 basis point rate cut
while leaving the door open for larger cuts if necessary.”  

Certainly, larger rate cuts could also be a warning sign for stocks,
as they might indicate a rush to prevent an economic downturn.

 

Risks of Large Rate Cuts

Zaccarelli noted, “It is important at this time to take a balanced approach to investing,
not planning for an imminent recession, chasing risks,
and not becoming complacent just because the Federal Reserve will cut rates in less than a month.”  

Meanwhile, Richard Clarida of Pacific Investment Management pointed out
Powell’s speech did not address any specific discussion about the terminal federal funds
rate at the end of this monetary easing cycle or the pace of rate cuts in the coming period.

 

Impact of September Jobs Data

Clarida, who is also a former Vice Chairman of the Federal Reserve, said,
“The details are yet to be focused on, but for the Federal Reserve, the direction seems clear.”
He added that the August jobs report
will likely determine whether the Fed will opt for a 25—or 50-basis-point cut.  

The S&P 500 index rose by over 1%, with all major sectors advancing.
Treasury bond prices rose across all maturities, and the two-year bond yield fell below 4%.
The dollar lost 1% of its value.
Swap traders now expect a total rate cut of more than 100 basis points this year,
implying a cut at each remaining monetary policy meeting until December,
including a significant 50 basis point cut.

 

 

 

 

Pace of Rate Cuts

David Russell of TradeStation said, “This was a significant event.
Jerome Powell today came with a series of hints leaning toward monetary easing.
He clarified this point with a clear call to adjust monetary policy.
This keeps market-supportive conditions in place until the end of the year,
making it difficult to expect a retest of this month’s lows.”

 

Possibility of Rapid Federal Reserve Action

Krishna Guha of Evercore believes that while Powell did not explicitly mention the “magnitude” of the cuts,
the “pace” suggests the possibility of moving faster than 25 basis points per meeting.  

Seema Shah of Principal Asset Management said,
“Powell has rung the bell to start the monetary easing cycle,”
adding, “Powell has not pre-committed to a 50 basis point cut, but make no mistake,
if the labor market shows further signs of slowing,
the Federal Reserve will cut rates with conviction.”

 

Possibility of Strong Rate Cuts

Neil Dutta of Renaissance Macro Research pointed out that Powell’s speech lacked the word “gradual.”
He noted that, unlike other Federal Reserve speakers,
Powell did not rule out the possibility of a strong rate cut during the policy reset.
Dutta added, “Powell’s legendary status is rising now” (referring to the

Fed Chair’s inclination to cut rates to avoid plunging the economy into a recession).

 

Rate Cut Expectations According to Experts’ Surveys

Bloomberg’s latest monthly survey of economists finds

that a more significant labor market downturn than previously

thought would prompt the Federal Reserve to cut interest rates faster and more aggressively.  

This would reduce the federal funds rate by 75 basis
points by the end of this year from its current level
compared to the July survey, which anticipated a 50 basis point cut
followed by a faster pace of cuts through 2026.

 

Importance of September Jobs Data

While many focused on Powell’s speech at the Jackson Hole Symposium,
Michael Wilson of Morgan Stanley believes that early September jobs data will be of greater importance.  

Wilson, the bank’s Chief U.S. Equity Strategist, said in an interview with Bloomberg TV,
“It’s about the job data.
That’s what will determine what the Federal Reserve does. They’ve said that.
And that’s what the market will focus on.”

 

 

Wall Street Recovers as Powell Confirms Interest Rate Cut in September

Stocks Rise as September Rate Cut Expected

Stocks Rise as September Rate Cut Expected:  As financial markets eagerly anticipate the Federal Reserve’s next move,
recent developments have further solidified expectations for a rate cut in September.
Dovish signals from the Fed and a significant downward revision in U.S. payroll data have fueled optimism among investors,
leading to a noticeable rise in stock prices as the September rate cut was expected.
This report provides a detailed analysis of the market’s response to these developments,
with insights from experts on what to expect in the coming weeks.

Content

Stock Rise

Jerome Powell’s Speech

Expert Opinions

Market Analysis

Jackson Hole Expectations

Market Environment Analysis

Future Outlook

Key Market Movements

 

 

 

 

Stocks Rise as Fed Minutes Support Rate Cut Expectations

Stocks climbed after dovish Federal Reserve minutes,
and a substantial downward revision of U.S. payroll data reinforced expectations that policymakers will cut interest rates in September.
Almost every primary sector in the S&P500 advanced, extending the index’s rally in August.

Trading volume was light, with fewer than 10 billion shares traded on U.S. exchanges—the slowest trading in six weeks.
Shorter-term Treasuries outperformed, with two-year yields falling by about 10 basis points before recovering some of the decline.

Traders are now pricing in a rate cut of more than one percentage point by the end of 2024, starting next month.

 

Jerome Powell’s Speech at Jackson Hole

As Jerome Powell’s Friday speech at Jackson Hole approaches,
Wall Street traders have closely examined the latest Federal Reserve policy meeting minutes.
Several officials acknowledged a strong case for a rate cut in
July before the central bank voted unanimously to keep rates unchanged.

 

Experts Views on the September Rate Cut

Jamie Cox of Harris Financial Group said, “The Fed minutes removed all doubt about a September rate cut.
The Fed’s communication strategy aims to make its meetings less of a market-moving event,
and they are sticking to that strategy literally.”

According to Bret Kenwell at eToro, with the “vast majority” of Fed members seeing a September rate cut as appropriate,
especially before the disappointing monthly jobs report, it seems almost sure the Fed will ease next month.

 

Market Analysis of S&P 500 Performance

He added, “The question isn’t whether the Fed will cut rates in September, but how much?
The market is currently favoring the odds of a 25 basis point cut over a 50 basis point cut,
which seems the more likely outcome, provided the August jobs report isn’t a major disappointment.”

The S&P500 rose to around 5,620 points.
Target Corp. surged 10% after ending a streak of sales declines in the second quarter,
citing improved discretionary spending.
In contrast, Macy’s Inc. dropped 13% after giving a bearish outlook.

 

Jackson Hole Expectations and S&P 500 Performance

The Jackson Hole economic symposium kicks off on Thursday, with Fed Chair Powell expected to speak on Friday morning.
According to data compiled by Bespoke Investment Group,
the S&P500 is on track to enter the event with its second-strongest year-to-date performance since 2000.

Despite the S&P500’s positive performance leading up to Jackson Hole in 2024,
the index has risen only a third of the time during the symposium in previous years,
with an average decline of 1.37% over the few days it takes place, Bespoke noted.
The index has also averaged declines the next day, the following week,
and through the next Fed meeting, roughly three weeks after the symposium ends.

 

 

 

 

Market Environment Analysis and Stock Support

With the Fed poised to cut rates from restrictive levels and substantial economic and earnings fundamentals continuing,
According to Solita Marcelli at UBS Global Wealth Management, the environment supports stocks.

She believes that quality growth stocks are still well-positioned to outperform.
Neil Dutta of Renaissance Macro Research said,
“The main takeaway from these revisions is just how ‘silly’ it would be to let the next jobs report determine whether to go 25 or 50 basis points in September.
This data suggests that whatever the next job number is, it’s likely lower.”

Krishna Guha of Evercore says the large payroll revisions will reinforce the Fed’s assessment
that the labor market has been softening under restrictive policy,
necessitating timely rate adjustments to prevent the situation from worsening.

 

Outlook on the Rate Cut Under Current Conditions

This supports a relatively “low bar” for a 50 basis point rate cut.

The base case remains a series of 25 basis point reductions.
At Strategas, Don Rissmiller says the case for lower policy rates has strengthened.
He noted that the Fed will need to validate this rate cut cycle—likely implying multiple cuts, pointing to Powell’s upcoming speech at Jackson Hole.

Jennifer McKeown at Capital Economics expects central bankers to provide little forward guidance at the Jackson Hole symposium,
preferring to emphasize their “data dependence.”

She said, “Since most economies are expanding, inflation is easing back toward the target,
and financial markets have stabilized after the recession scare a few weeks ago,
there’s less pressure on them to steer markets than in past events. But they risk keeping rates too high for too long.”

 

Key Market Movements

 

Indices

The S&P500 rose 0.4% as of 4 p.m. New York time.

The Nasdaq 100 rose 0.5%.

The Dow Jones Industrial Average rose 0.1%.

Currencies

The Euro rose 0.2% to $1.1152.

The British pound rose 0.4% to $1.3090.

The Japanese yen rose 0.2% to 145.03 per dollar.

Cryptocurrencies

Bitcoin rose 4% to $61,664.01.

Ether rose 2.3% to $2,648.64.

 

 

Stocks Rise as September Rate Cut Expected