Tag Archives: US stocks

Asian Markets Rally Following U.S. Small-Cap Stock Surge

Asian Markets Rally Following U.S. Small-Cap Stock Surge: Asian markets saw a notable rise after Wall Street closed with gains,
as investors shifted their focus from major tech companies to stocks more sensitive to economic data,
including small-cap companies.

These movements highlight the dynamic nature of global markets and their current trends.

Content
Performance of Asian Markets
Anticipation of Chinese Economic Data

Movements of the Japanese Yen
Developments in the Semiconductor Market
Shifts in U.S. Investor Trends

Continued Momentum in U.S. Markets

Updates on Commodity and Cryptocurrency Markets

 

 

 

Performance of Asian Markets

Hong Kong, China, and Australian stocks recorded gains, while Japanese stocks experienced volatility.
At the same time, U.S. stock futures fell slightly after the S&P 500 rose by 0.5% on Wednesday.
In contrast, the Russell 2000 small-cap index reached its highest level in nearly three years,

while the Nasdaq 100 only saw a modest increase of 0.1%.

 

Anticipation of Chinese Economic Data

Investors are eagerly awaiting Chinese economic data,
with figures set to be released on Friday expected to show
4.5% growth in the third quarter compared to last year,
according to a Bloomberg survey.
If this forecast holds, it would mark the slowest growth rate in six quarters.

Chinese President Xi Jinping has called on officials to make every

effort in the year’s final quarter to achieve the annual growth target of approximately 5%.
However, a series of press conferences this month,
which failed to provide details on new incentives,
has raised concerns that more than current efforts may be needed to drive growth.
The following key event will be a press conference by the Housing Minister on Thursday.

 

Movements of the Japanese Yen

In Australia, bond yields rose after the unemployment rate dropped to 4.1% in September,
contrary to Bloomberg’s economist survey, which had expected the rate to remain stable.
The U.S. 10-year Treasury yield also increased to 4%,

while the dollar index remained close to its highest since early August.

The Japanese yen stabilized on Thursday morning after declining against the dollar in the previous session.
Meanwhile, Japan’s exports unexpectedly dropped in September, raising some economic concerns.

 

 

 

 

Developments in the Semiconductor Market

Taiwan Semiconductor Manufacturing Company (TSMC) is scheduled to release its earnings on Thursday,
and the company’s results will be closely watched for any signs of slowing chip demand.
This is especially true after ASML reported disappointing
order figures and lowered its revenue forecasts for 2025 earlier in the week.

 

Shifts in U.S. Investor Trends

The gains in U.S. small-cap stocks on Wednesday indicate a shift by investors away from large tech companies,
which have significantly benefited from the AI boom, towards stocks that thrive under stable economic conditions.

David Russell of TradeStation stated,
“There may be a tendency among investors to move away from large tech companies,
which may not have sufficient catalysts to sustain their rise.”

He added, “With elections approaching and economic balance returning,
the long-anticipated shift from large companies to other firms may be closer than ever.”

 

Continued Momentum in U.S. Market

Traders continue to monitor U.S. corporate earnings.
Morgan Stanley’s shares jumped 6.5% after its trading
and banking divisions posted revenues that exceeded expectations,
leading to a 32% increase in third-quarter profits.
United Airlines Holdings also saw its shares rise by 12% after reporting earnings that surpassed expectations.

The S&P 500 has already recorded 46 closing records this year,
and according to Goldman Sachs’ trading desk,
this momentum is expected to continue in the final months of 2024.

Scott Rubner, General Manager of Global Markets at Goldman Sachs,
expects the index to reach above 6,000 points by the end of the year.
Based on historical data dating back to 1928,
the average returns for the S&P 500 from October 15 to December 31 stood at 5.17%,
rising to nearly 7% in election years, indicating a potential level of 6,270 points by the end of the year.

In a client note on Tuesday, Rubner added,
“The selling wave in the stock market has paused,
and signs of a year-end rally are emerging as clients shift
from hedging against negative scenarios to focusing on positive outcomes,
with institutional investors now being forced into the market.”
He noted that professional investors are increasingly concerned about underperforming relative to benchmarks.

 

Updates on Commodity and Cryptocurrency Markets

West Texas Intermediate crude rose after a four-day decline ending Wednesday in the commodity markets.
Gold remained stable after two consecutive sessions of gains.
Meanwhile, Bitcoin stabilized on Thursday morning after rising 1.7% on Wednesday,
reaching its highest level since July.

 

Asian Markets Rally Following U.S. Small-Cap Stock Surge

Rate Cuts Revitalize Japanese Indices and U.S. Stock Futures

Rate Cuts Revitalize Japanese Indices and U.S. Stock Futures: Japanese stocks rose alongside U.S. stock futures
after the Federal Reserve cut interest rates by half a percentage point, indicating further easing in the coming months.

 

Content

Jerome Powell

Rate Cuts

Oil Prices

 

 

Jerome Powell Downplays Impact of Rate Cuts on Presidential Race Between Trump and Harris

Federal Reserve Chair Jerome Powell confirmed that the greater-than-expected rate cut on Wednesday
may have a limited impact on the presidential race between Vice President Kamala Harris and Donald Trump,
as the effects of the decision will slowly extend to the economy.
In a press conference following the significant rate cut—the first in four years—
Powell responded to reporters’ questions about the timing of the long-awaited rate cut,
with just 48 days until the November 5 elections: “The things we do affect economic conditions mostly with a lag.”

 

Rate Cuts Revitalize Japanese Indices and U.S. Stock Futures

Japanese stocks rose alongside U.S. stock futures after the Federal Reserve cut interest rates by half a percentage point,
indicating further easing in the coming months.
The Japanese “TOPIX” and “Nikkei 225” indices increased as the yen fell more than 1% against the dollar.
U.S. stock futures rose after the S&P 500 briefly touched a record high before closing down 0.3%.
Chinese and Australian stocks traded within a narrow range.

 

 

 

 

Oil Prices Rise Amid Improved Investor Sentiment and Rising Middle East Tensions

Oil prices increased due to a general improvement in financial markets following the Fed’s significant rate cut,
while traders monitored escalating tensions in the Middle East.
Brent crude futures rose to around $74 per barrel after closing nearly unchanged on Wednesday,
while West Texas Intermediate crude was above $71.
Stock prices in futures markets in Europe and Asia rose
after the Fed’s rate cut bolstered expectations that the U.S. economy would avoid a slowdown.
Investors are also closely watching developments in the Middle East
after Israeli Defense Minister Yoav Gallant announced what he described
as a “new phase” in the war with Islamic groups in the region.
The announcement raised concerns about the potential for a broader conflict that could involve Iran,
a member of the Organization of the Petroleum Exporting Countries (OPEC).

 

 

Rate Cuts Revitalize Japanese Indices and U.S. Stock Futures

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

Tech Stocks Reverse U.S. Indices’ Upward Trend

Tech Stocks Reverse U.S. Indices’ Upward Trend: Nasdaq Falls Ahead of Nvidia Earnings:
U.S. stock markets have experienced sharp fluctuations as the announcement of Nvidia’s earnings approaches.
This has led to a decline in major tech stocks and significantly impacted the leading U.S. indices.

 

Contents

Decline in Tech Stocks

Fed Officials’ Statements

Market Expectations and Continued Stock Rises

Nvidia Earnings Expectations

Impact of Major Companies

Corporate Returns
Expected Stock Consolidation
Anticipated Economic Impacts

 

 

 

Decline in Tech Stocks

Major U.S. tech stocks declined, negatively impacting Wall Street indices

after the market rose to levels close to its all-time highs.
As the announcement of Nvidia’s earnings approaches, Bloomberg’s “Magnificent Seven” index fell by 1.2%,
affecting the performance of the S&P 500 index.
Meanwhile, the Dow Jones Industrial Average rose to a record level.

 

Fed Officials’ Statements and Their Impact on the Markets

Jerome Powell, Chairman of the Federal Reserve,
confirmed in the Jackson Hole seminar his expectations for a rate cut in September,

sparking expectations of a broader bull market.
However, investors are cautious about the impact of Nvidia’s earnings on the markets,
as disappointing results could pose a significant risk.

 

Market Expectations and Continued Stock Rises

Analysts expect strong inflows from corporate buybacks, systematic funds, and individual investors,
which could push stocks higher in the coming weeks.
Market experts also anticipate significant purchases by Commodity Trading Advisors (CTAs), which may contribute to stock gains.

 

 

 

 

Nvidia Earnings Expectations

Analysts believe that Nvidia’s earnings, to be announced on Wednesday,
will be a key driver of market movement this week.
Expectations for the company’s earnings are high,
with speculation that Nvidia may raise its earnings guidance.

 

Monitoring the Impact of Major Companies’ Earnings on the Market

Expectations persist that the “Magnificent Seven” companies will post significant earnings growth for the second quarter.
Nvidia’s earnings announcement is expected to significantly impact the market,
potentially more than Powell’s speech at Jackson Hole last week.

 

Corporate Returns and Their Impact on the Market

Corporate return expectations indicate that performance will be buoyant
following the Federal Reserve’s first rate cut unless the economy is in recession.
This trend may support small and mid-sized companies’ investments in the short term.

 

Expected Stock Consolidation

Despite expectations for rate cuts, concerns remain about the anticipated consolidation
of stocks around their previous high levels,
especially as we enter one of the worst seasonal periods.

 

Anticipated Economic Impacts  

Upcoming U.S. inflation figures are expected to strengthen the case for anticipated rate cuts,
with expectations that the central bank will continue to support economic expansion.

 

Tech Stocks Reverse U.S. Indices’ Upward Trend

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

Wall Street Struggles to Find Direction Amid Anticipation of Inflation Data

Wall Street Struggles to Find Direction Amid Anticipation of Inflation Data: In anticipation of U.S. inflation data and increasing geopolitical tensions,
Wall Street Struggles to Find Direction, making investors cautious in their investment decisions.
This article sheds light on recent U.S. stock market events and analyzes potential future trends.

 

Contents

Geopolitical Tensions

Impact of Rising Oil Price

Expected Volatility

Effects of Previous Volatility

Justified Rise in the Fear Index

Investor Concerns About Recession

Focus on the Consumer Price Index

Stock Market Outlook

The Double Whammy

A Short Window for Investment

A Simple Crash or an Economic Disaster?

 

 

 

 

Geopolitical Tensions and Their Impact on Risk Appetite

U.S. stock indices struggled to find direction ahead of U.S. inflation data
as recent geopolitical developments dampened risk appetite.
After a week of intense sell-offs that shook global markets,
the S&P 500 remained nearly unchanged.
Many investors are avoiding making significant bets,
waiting for more signals on the market’s path and the health of the U.S. economy.

 

Impact of Rising Oil Prices and Bonds

Oil prices reached $80 per barrel,
and bonds rose as fears of a potential Iranian attack on Israel increased.
Solita Marcelli from UBS Global Wealth Management believes
this is the right time for investors to “assess” how major markets are moving.

 

Expected Volatility in the Coming Week

Marcelli expects volatility to return to the markets this week,
with the release of inflation data that could heighten fears of a recession if the results are too low.
If inflation is too high, concerns might resurface that the Federal Reserve
won’t be able to lower interest rates quickly enough to protect the economy.

 

Effects of Previous Volatility on Investors

The S&P 500 index remained close to the 5345-point level,
with most major group stocks declining, while technology, energy, and utilities stocks rose.
The Fear Index (VIX) remained stable at 20 points after an unprecedented spike last week.

 

Justified Rise in the Fear Index

Cboe Global Markets acknowledged that weak trading in the primary markets
contributed to the sharp move of the Fear Index last week.
Still, it pointed out that the increase was justified due to
growing concerns about contagion risks from the collapse of the Japanese yen and stocks.

 

 

 

 

Investor Concerns About Recession

Some analysts, like Callie Cox from Ritholtz Wealth Management,
suggest that fear can be a healthy dynamic for a market that thrives by clearing minor obstacles.
In recent weeks, the debate has shifted from whether
the economy has slowed down enough to concerns that it may be “stuck in the mud,”
as noted by Chris Larkin from E*TRADE.

 

Focus on the Consumer Price Index

After the turmoil experienced in the markets last week,
The focus will be on Wednesday’s U.S. Consumer Price Index to see if the Federal Reserve
will be free to refocus on the labor market, and if interest rate cuts
are enough to ensure a “soft landing,” according to Krishna Guha from Evercore.

 

Stock Market Outlook

During the recent turbulence, investors have reduced their equity
allocations at the fastest pace since the start of the COVID-19 pandemic.
If economic fears subside, recent sell-offs represent an opportunity
to buy stocks with healthy fundamentals at significant discounts.

 

The Double Whammy

According to Michael Wilson from Morgan Stanley,
the “double whammy” of economic uncertainty
and weak company earnings reports will likely limit stock market gains.
He also points out that the S&P 500 may trade between 5000 and 5400 points,
as macroeconomic data shows no clear signs in the short term.

 

 A Short Window for Investment

JPMorgan Chase strategists, led by Mislav Matejka,
believe investors will have a short window to buy low-priced U.S. stocks at the end of this month.
However, further near-term declines cannot be ruled out if activity data surprises negatively,
but investors should seize these opportunities to buy stocks.

 

A Simple Crash or an Economic Disaster?

At least one indicator suggests that last week’s stock
market event was more like a simple crash than a harbinger of worse things.
Tom Essaye of The Sevens Report believes the fundamentals
have not deteriorated enough to justify abandoning risk or stocks.
Still, he also warns against ignoring the recent spike in volatility.

 

Wall Street Struggles to Find Direction Amid Anticipation of Inflation Data

The most important economic data and news expected next week

The most important economic data and news expected next week

Next week from the US, investors will be closely monitoring PCE price indices
personal income and spending data, and speeches from various Federal Reserve officials.

 

Topics

US data reports

Euro

US stocks

 

US data reports

 

Pivotal metrics such as the ISM Manufacturing PMI,
the second estimate of the GDP growth rate, durable goods orders,
consumer sentiment, and new and pending home sales will also be under scrutiny.
At the international level, attention will be drawn to inflation rates in Japan, Australia and the Eurozone.
Emphasis will also be placed on the GDP growth rates of Turkey, Switzerland and Canada.
Furthermore, manufacturing PMIs for pivotal countries
such as China, Russia, Switzerland and Canada will provide
insights into the health of their respective industrial sectors.
Finally, markets will await the interest rate decision from the New Zealand central bank,
and unemployment rates in Germany, Mexico, Japan and the Eurozone.

 

Euro witnessed strong gains during last week’s trading

The euro witnessed a rise in the European currency market on Friday against a group of global currencies,
as it maintained its gains for the eighth consecutive day against the US dollar,
and approached its highest level in three weeks.
The euro is preparing to achieve outstanding weekly performance in 2024,
given the decline in the possibility of a cut in interest rates in the eurozone next April.

These prospects declined this week after a series of positive economic data in the Eurozone,
and more hawkish statements from European Central Bank leaders,
reduced fears of widening the current interest rate gap between Europe and the United States.

 

 

US stocks await US consumer confidence

The markets are awaiting the release of the US Consumer Confidence data (CB),
which is scheduled to be released during next Monday’s trading,
as economists expect the upcoming numbers to vary to be consistent
with the previous reading of around 114.8, as an actual reading higher
than 114.8 will strengthen the position of stocks,
whose indicators are moving in positive pricing as a result of
the good numbers of corporate results and also
The strength of the labour market and the strength of the American consumer?

 

 

The most important economic data and news expected next week

Losses in the US stock market

Losses in the US stock market: The rise in Treasury bond yields and statements
from Federal Reserve Chairman Jerome Powell,
affirmed the need for more evidence of sustainable inflation before lowering interest rates, leading to a decline in US stocks.

Topics

US stocks incur losses

Gold stabilizes after two consecutive sessions of losses

Rise in the dollar against a basket of currencies

 

 

 

US stocks incur losses

US stocks suffer losses due to rising bond yields and Powell’s statements undermining March rate cuts.
Financial markets on Wall Street notably declined today due
to rising Treasury bond yields and statements from Federal Reserve Chairman Jerome Powell,
who affirmed the need for more evidence of sustainable inflation before lowering interest rates.
These statements affected company evaluations and led to declines in stock indices.
On the other hand, data from the Institute for Supply Management
showed positive growth in the US service sector in January, with an increase in input prices.
Despite labour market resilience, doubts remain about the timing of interest rate cuts.
With the rise in Treasury bond yields, traders expect an opportunity to cut interest rates in May and June.
The Dow Jones Industrial Average fell by 38,380 points,
while the S&P 500 index dropped to 4,942 points.
The Nasdaq index fell to 17,613 points.

 

Gold stabilizes after two consecutive sessions of losses

Gold stabilized near $2024 per ounce on Tuesday after two consecutive sessions of decline,
as strong US economic data and tightening bias” from the Federal Reserve weakened bets on interest rate cuts.
Data released on Monday showed that the US service sector’s
growth accelerated to its highest level in four months in January,
exceeding expectations at 53.4, surpassing the forecast of 52.
Previous data also showed that the US economy added 353,000 jobs in January,
significantly more than the 333,000 in December.
This greatly exceeds expectations, which were only about 180,000 jobs. Additionally,
Federal Reserve Chairman Jerome Powell affirmed in an interview
with CBS aired last Sunday that a rate cut in March is unlikely,
similar to comments made last week following the Open Market Committee’s decision.
He added that the central bank will likely move slower on interest rate cuts than the market expects.
Markets now expect a 15% chance of a Federal Reserve interest rate cut
in March and anticipate 115 basis points in total cuts this year,
down from about 150 basis points in early January.

 

Rise in the dollar against a basket of currencies


The dollar rose to its highest level in eight weeks against major currencies yesterday,
as traders’ expectations of significant interest rate cuts by the US Federal Reserve this year waned,
amid continued recovery in the US economy.
At the same time, the yen, Australian dollar,
and the New Zealand dollar fell to their lowest levels in two months during early Asian trading.
The euro fell to its lowest level in over a month against the US dollar.
The euro recorded a value of $1.0782 in the latest transactions.
On the other hand, the British pound fell by 0.18% against the US dollar,
reaching its lowest level since January 17th.

Regarding the US dollar index, it rose to 104.18 points against a basket of currencies,
its highest level since December.
It is worth mentioning that the decline in expectations
for interest rate cuts came as a result of a strong US jobs report released on Friday,
which significantly exceeded market expectations,
reinforcing statements by Fed Chair Jerome Powell at last week’s policy meeting
that an expected rate cut in March is unlikely.
Investors now expect less than a 20% chance that the Fed will start cutting interest rates in March,
compared to about 50% of expectations a week ago

 

Losses in the US stock market

Oil Incurred its biggest weekly decline since early November

Oil Incurred its biggest weekly decline since early November: Oil prices are heading towards the largest weekly loss since November,
with the progress of talks to reach an agreement to stop the war between Israel and Hamas.

 

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American consumer confidence

US stocks

 


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WTI fell above $72 a barrel at the end of trading on Friday but has seen a decline of almost 9% over the past week.
Reports indicate that the ceasefire talks are still in the early stages, with no breakthrough expected soon.

Economist Vishnu Varathan said that the decline in oil prices and the disappearance of the geopolitical risk premium
is due to optimism about progress in the ceasefire negotiations in Gaza.
Although oil made a monthly advance in January due to attacks on ships in the Red Sea,
strong supply and concerns about demand continue to weigh on the rise in prices.

The OPEC+ alliance has confirmed its commitment to production cuts for this quarter,
and OPEC reduced its daily oil production by 490,000 barrels last month.
These steps come to prevent a global glut and reduce pressure on prices in light of fears of declining demand.

 

The revised reading for US consumer confidence is the highest since 2005

The revised reading of US consumer confidence for January was positive,
contrary to expectations that had indicated 78.9, rising to levels of 79.0, which is the highest since 2005.
This comes in light of the confidence resulting from an economy whose inflation levels have declined to record in the last reading 2.9%,

and in return, positive in growth and the labour market. Strong.

This contributes to adding strength to the American stock indices,
the Dow Jones index adding a new historical peak of around 38,784 thousand, and the Nasdaq achieving stability near its highest levels
to close its trading around 17,633 thousand, amid hopes for more positivity.

 

 

US stocks reach new highs after strong corporate results

US stocks closed at new highs on Friday, the S&P 500 rose 1.07%, the Nasdaq rose 1.74%,
and the Dow Jones rose 134 points, as strong results from giant technology companies lifted investor sentiment,
despite the stronger-than-expected performance of the jobs report.
Meta shares jumped 20.32% after the company announced its first dividend and recorded the largest increase in quarterly sales in two years.
Amazon shares jumped 7.87% after it announced a 14% increase in revenue.
Nvidia also rose (4.97%) while Apple trimmed its losses (-0.54%) although the company’s sales in China were disappointing.
Exxon Mobil shares lost 0.46% after announcing mixed results,
while Chevron shares rose 2.91% after the company raised its profits by 8%.
On the data front, the US economy added 353,000 jobs last month, nearly double expectations of 180,000 jobs,
while the unemployment rate remained steady at 3.7% and wage growth unexpectedly accelerated.

 

0il Incurred its biggest weekly decline since early November

US stocks close at record highs

US stocks close at record highs: As The earnings season approaches, the S&P 500 index reached a record level,

at the time that index rose slightly amid caution before the five largest companies announced their earnings.

 

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US stocks close at record highs  

Oil stability

Evergrande liquidation

 

US stocks close at record highs  

Traders are anticipating a wave of companies’ earnings announcements,

that are expected to significantly influence the direction of the markets over the coming months.
After a strong rise that led to the S&P 500 index reaching a record level,

the index witnessed a slight rise in light of the state of caution before announcing

the results of five large companies with a market value exceeding 10 trillion dollars.

Before the Federal Reserve’s decision,
the US Treasury was expected to reveal an increase in its sales of long-term bonds,
threatening higher yields and putting pressure on growth stocks.

On the other hand, the S&P 500 index rose around 4,900 points,
while Amazon retreated from its acquisition of iRobot Corp. for $1.4 billion.
Yields on 10-year Treasury bonds fell, as investors watch for more profit-taking.

Fundamentally, US economic data remains positive,
and the Fed is expected to feel comfortable cutting interest rates starting in May,
despite further signals on economic stability are needed.

 

Oil stability

Brent crude futures currently stand at $83.26 per barrel,
after hitting the highest level since November 29 at $82.06 per barrel earlier.

Likewise, West Texas Intermediate crude futures remain at $76.90 per barrel.

Russian oil refineries were attacked by Ukrainian drones,

affecting their production and the outlook for exports of refined products.

Data from the shipping company LSEG indicated that Russia was reducing exports of the petrochemical naphtha,
which could lead to a significant reduction in the volume of its exports.

 

 

 

Evergrande liquidation

On the demand front, oil demand expectations were affected by the Hong Kong court’s decision to liquidate the Evergrande Group,
which affected demand in the world’s largest oil importer.
The OPEC+ member states meeting is scheduled for February,

yet expectations indicate that there will be no new decisions on production policy.

Oil prices remain under the influence of these movements and volatile market expectations.

 

US stocks close at record highs