Source: Global Market News
The market focus has shifted to the monetary policy meeting of the Federal Reserve next week. Expectations of a significant interest rate cut by the Federal Reserve have been reignited, causing US Treasury bond prices to rise and bringing some uncertainty to the interest rate meeting.
On the evening of the 13th, US stocks opened slightly higher on Friday, with the three major indices experiencing a slight morning rally. As of the time of writing, $Dow Jones Industrial Average (.DJI.US)$ rose 0.63%, $Nasdaq Composite Index (.IXIC.US)$ rose 0.52%, $S&P 500 Index (.SPX.US)$ The market focus has shifted to the upcoming monetary policy meeting of the Federal Reserve next week. Expectations of a significant interest rate cut by the Federal Reserve have been reignited, triggering a rise in U.S. government bonds and bringing some uncertainty to the interest rate meeting.
U.S. stocks closed higher on Thursday, with the S&P 500 Index and the Nasdaq Composite Index rising for the fourth consecutive trading day, continuing their strong performance this week. As of Thursday's close, the S&P Index was up nearly 3.5%, the Nasdaq was up 5.3%, and the Dow was up 1.9%.
Deutsche Bank raised its year-end target for the S&P 500 index from 5,500 points to 5,750 points, citing increased share buybacks, strong corporate profits, and strong inflows driven by robust risk appetite.
Shaar, Chief Investment Officer of Public Investments at Goldman Sachs Asset Management, advises investors to focus on small-cap stocks as the market widely expects the Federal Reserve to begin lowering interest rates next week. He points out that with the rate cut, small companies will be the main beneficiaries due to their higher proportion of floating rate loans.
The market focus has shifted to the Federal Reserve's monetary policy meeting.
Wall Street is now looking forward to the Federal Reserve's monetary policy meeting on September 17th to 18th. The market widely expects a 25 basis point interest rate cut by the Federal Reserve. The current target range for the Federal Reserve's interest rate is 5.25% to 5.5%.
Former New York Fed President Dudley said at the Bretton Woods Committee forum in Singapore that there is a possibility that the Federal Reserve may cut interest rates by 50 basis points at its meeting next week, given the current economic environment. Dudley emphasized that the unexpectedly slowdown in the U.S. labor market and the greater risks to the employment market than inflation challenges support his call for a rate cut. Dudley's speech reignited expectations of a significant interest rate cut by the Federal Reserve, triggering a rise in U.S. government bonds and bringing some new uncertainties to next week's Fed decision.
The possibility of a 50 basis point interest rate cut next week, which was almost completely ruled out by the market in the past few days, is starting to rebound. The current market expectation for the Federal Reserve to start a loosening cycle with a 50 basis point interest rate cut on September 18th is about 30%. The trigger for this change in expectations was a report on Thursday that Fed policymakers are still considering whether to cut interest rates by 50 basis points or 25 basis points.
Recently released series of economic data reflect slowing inflation, seemingly supporting reasons for interest rate cuts.
The year-on-year increase in August Consumer Price Index (CPI) announced this week is 2.5%, the lowest level since February 2021. In addition, the Producer Price Index (PPI) rose 0.2% in August, meeting expectations.
In terms of economic data, traders will focus on the August import price data released on Friday morning. Preliminary consumer confidence data for September is also scheduled to be released.
Key sectors & stocks
Spot gold touched $2,581 per ounce, hitting a new historical high, and gold stocks continued to rise, with Coeur Mining up over 4%, Harmony Gold Mining, Gold Fields, and Alamos Gold up over 3%.
The semiconductor sector is on the rise, with ARM up over 5% and Micron Technology up nearly 4%.
Some popular China concept stocks have fallen, with Bilibili down over 3%, PDD Holdings down nearly 3%, and Alibaba, JD.com down over 1%.
$Adobe (ADBE.US)$ Dropped nearly 9%, the company is expecting fourth-quarter revenue of $5.5 billion-5.55 billion, below analyst expectations.
$Uber Technologies (UBER.US)$ Rose over 6%, the company is expanding its collaboration with Waymo, the self-driving car department under Alphabet.
$Boeing (BA.US)$ Dropped more than 2%, earlier the company's 0.033 million workers from two locations in the USA decided to go on strike.
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