Inflation in Europe and the United States both declined, accelerating the pace of global central bank interest rate cuts. In the United States, the core PCE in August (the inflation index favored by the Federal Reserve) was lower than market expectations, with a month-on-month increase of only 0.1%, hitting a new low since May, and a year-on-year increase of 2.7%, close to the Fed's 2% target. At the same time, the final value of the University of Michigan's one-year inflation expectation for September in the United States fell to 2.7%, hitting a new low since 2020, while the final consumer confidence index rose to 70.1, reaching a five-month high. The market expects the probability of a 50 basis point rate cut by the Fed in November to increase from 49.3% to 54.1%.

The Fed has hinted at shifting its focus from inflation to maintaining a healthy labor market, with employment data determining the pace of future rate cuts. In 2025, FOMC member and President of the St. Louis Fed, Mularn, stated that the Fed should gradually cut rates, expecting the Fed to cut rates by 25 basis points multiple times in the remaining time of 2024. If the U.S. job market underperforms expectations, the Fed may accelerate the pace of rate cuts. Fed Governor Bowman said data indicates the U.S. economy remains strong.

In Europe, both France and Spain have seen inflation rates fall below 2%, lower than expected. At the same time, surveys show that consumer inflation expectations in the Eurozone for August have declined, supporting an accelerated pace of rate cuts by the European Central Bank. The market expects an 80% probability of a 25 basis point rate cut by the European Central Bank in October, with major banks like JPMorgan and Barclays expecting rate cuts at every meeting from October.

Benefiting from China's 'policy gift package' and the ongoing rise in global central bank rate cut expectations, risk appetite has increased. The Dow and European stocks hit new highs again. Chinese assets shine the brightest, with the China concept index rising 23.94% this week, significantly outperforming the seven tech sisters and major U.S. indices. Bitcoin has risen for the third consecutive week, hitting over $66,000 on Friday. Gold hit new highs for the fourth consecutive day before Friday, achieving a three-week uptrend. The U.S. dollar has fallen for four consecutive weeks. Concerns about increased supply from Libya and Saudi Arabia, along with worries about oil demand prospects, overshadow the impact of the Middle East situation, leading to nearly all the gains of U.S. and Brent crude oil in the past two weeks being erased.

Expectations for a Fed rate cut have fluctuated, but thanks to the increased rate cut expectations on Friday, the probability of a 50 basis point cut in November has remained above 50% this week.

On Friday, the S&P and Nasdaq closed lower, with the S&P falling from its record high, while the Dow rose for two consecutive days to return to a new high, briefly gaining 450 points or more than 1%. The Russell 2000 small cap stocks also rose by 1.5% at one point, leading the pack. Nvidia dropped nearly 3.9% at its lowest during the trading day, and the Nasdaq fell the deepest by nearly 0.7%, with chip stocks dropping the most by 2.3%. The energy sector performed well thanks to rising oil prices. Throughout the week, all three major U.S. indices have risen for three consecutive weeks, and the China concept index has risen by nearly 24%:

• U.S. stock indices were mixed: the S&P 500 closed down 7.20 points, a decrease of 0.13%, at 5738.17 points, with a weekly decline of 2.17%. The Dow, closely related to the economic cycle, closed up 137.89 points, an increase of 0.33%, at 42313.00 points, with a weekly gain of 0.59%. The Nasdaq, which is mostly tech-heavy, closed down 70.70 points, a decline of 0.39%, at 18119.59 points, with a weekly gain of 0.94%. The Nasdaq 100 fell by 0.53%, with a weekly gain of 1.08%. The Nasdaq Tech Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech components, closed down by 0.78%. The Russell 2000 index, which is more sensitive to the economic cycle, rose by 0.67%, with a weekly decline of 1.89%. The VIX fear index rose by 10.34% to 16.96, with a weekly gain of 5.02%.

This week, the U.S. stock market saw mixed gains and losses, with small cap stocks slightly down, while the Nasdaq rose by about 1%, leading the gains.

• U.S. industry ETFs closed with mixed gains and losses. Energy ETFs rose by over 2%, utility ETFs by nearly 1%, biotech index ETFs by about 0.5%. However, semiconductor ETFs fell by nearly 2%, global tech stock ETFs and tech industry ETFs each fell by about 1%, and internet stock index ETFs fell by less than 0.5%.

• The S&P 500 index's 11 sectors showed various movements. The information technology/tech sector fell by 0.96%, materials sector by 0.23%, consumer discretionary sector by 0.08%, healthcare sector by 0.04%, consumer staples sector by 0.01%, industrial sector rose by 0.15%, real estate sector rose by 0.19%, financial sector rose by 0.34%, telecom sector rose by 0.49%, utility sector rose by 1.01%, and energy sector rose by 2.11%.

• "Tech Big Seven" had mixed performances. Tesla rose by 2.45%, up 9.32% for the week. Google Class A rose by 0.75%, up 0.22% for the week. Former U.S. President Trump stated that if he returns to the White House, he would sue Google over search results. Apple rose by 0.12%, down 0.21% for the week. Nvidia fell by nearly 3.9% before closing down by 2.13%, up 4.61% for the week. Amazon fell by 1.67%, down 1.89% for the week. Microsoft fell by 0.76%, down 1.67% for the week. Meta, under the "metaverse" concept, fell by 0.08%, up 1.07% for the week.

The "Tech Big Seven" closed the week flat.

• Most chip stocks declined. The Philadelphia Semiconductor Index fell by 1.76%, up 4.32% for the week. Industry ETF SOXX fell by 1.59%; Nvidia's double leveraged ETF fell by 4.38%. Intel fell by 0.04%, and Intel is working with the U.S. government to finalize an $8.5 billion chip financing by the end of the year. Reports state that Intel has rejected Arm's intention to acquire its product division, as Arm has shown no interest in Intel's manufacturing business. Taiwan Semiconductor ADR fell by 4.74%, Broadcom by 3.03%, Arm Holdings by 2.4%, Micron Technology by 2.17%, Applied Materials by 2.24%, ASML ADR by 1.28%, KLA by 2.75%, AMD by 1.87%, Qualcomm by 1.47%, Marvell Technology by 3.35%, Silicon Motion Technology ADR, Qorvo, UMC ADR, Skyworks Solutions all fell by over 1.2%. On the other hand, ON Semiconductor rose by 1.46%, ASM International ADR rose by over 0.5%, NXP Semiconductors rose by over 1.1%, STMicroelectronics ADR rose by about 3%, Advanced Micro Devices rose by over 5.7%, and Wolfspeed rose by 10.53%.

• AI concept stocks had mixed performances. Super Micro Computer rose by 4.31%, slightly recovering from a 12.17% decline on Thursday. Serve Robotics rose by 11.57%, CrowdStrike rose by 1.56%, Snowflake rose by 1.27%, BullFrog AI rose by 0.68%, Oracle rose by 0.38%, while Palantir fell by 0.7%, SoundHound AI, an AI voice company with Nvidia stake, fell by 2.65%, BigBear.ai fell by 1.27%, Dell Technologies fell by 4.96%, and C3.ai fell by 0.62%.

• China concept stocks continued to soar. The Nasdaq Golden Dragon China Index rose by 4%, up 23.94% for the week, nearing the performance of the week of March 11, 2022 (which saw a 26.34% increase). In ETFs, the China Technology Index ETF (CQQQ) rose by 3.95%, up 23.25% for the week. The China Internet Index ETF (KWEB) rose by 3.92%, up 26.81% for the week. The FTSE China Bull 3X ETF (YINN) rose by 2.62%, while the FTSE **** 3X ETF (YANG) fell by 2.91%.

• In the popular China concept stocks, Fangdd Network rose 17.76%, up 114% on Thursday. Zhongbei Energy rose 65.5%, up 39.73% on Thursday. Qifu Technology ADR (formerly 360 DigiTech) closed up 6.17%, up nearly 87% year-to-date in 2024, and Qifu Technology responded to Grizzly Research's short report, stating that the data was inaccurate and baseless. Miniso rose 11.02%, Bilibili rose 8.68%, Mengniu Dairy ADR rose 11.34%. JD.com rose 5.03% to a fourteen-month high. It was previously reported that Alibaba and JD.com will mutually open up to each other. New Oriental rose 3.45%, PDD Holdings rose 4.62%, Pinduoduo ADR rose 3.94%, Nio Inc rose 12.8%, Li Auto Inc rose 1.62%, Zeekr rose 15.06%, Xpeng rose 9%, Vipshop rose 3.21%, Trip.com rose 8.19%, Netease rose 2.69%, Alibaba rose 2.15%, Baidu rose 2.54%, while Tencent ADR fell 0.4%.

The China internet concept stock index ETF (KWEB) rose 26.81% for the week, while the seven-sisters tech index only rose 3%.

• In other key stocks: (1) Bristol-Myers Squibb rose 1.58%, intraday once rose nearly 4.1% to reach a high in over five months as US regulators approved its Cobenfy for treating schizophrenia, the first drug approved for treating schizophrenia in decades. (2) Costco fell 1.75%, dropping more than 3% intraday as the company's last quarter profit exceeded expectations but revenue lagged. (3) Volkswagen rose 1.06%, falling nearly 1.9% after the second downward adjustment of full-year revenue and delivery volume expectations.

Benefiting from Chinese policy stimulus, and with inflation in France and Spain below 2% accelerating the pace of ECB rate cuts, European stocks hit new highs again. The pan-European index and the German index hit new highs for two consecutive days, with European luxury good concept stocks generally rising.

The pan-European Stoxx 600 index rose 0.47% to 528.08 points, hitting new highs for the second consecutive day, with a weekly gain of 2.69%, the best in over four months. Chemical stocks led with a 2.75% increase, and automotive stocks rose 2.23%. Italian down jacket luxury brand Moncler rose 10.91% to a new high, with reports claiming LVMH group will invest in Double R, the investment company controlled by Moncler. French luxury goods giant LVMH group and Kering group rose 3.67% and 6.34% respectively, while L'Oreal fell 0.66%, Burberry rose 6.96%, and Hugo Boss rose 5.45%.

The German index rose 1.22%, with a cumulative increase of 4.03% for the week. The French index rose 0.64%, with a cumulative increase of 3.89% for the week. The Italian index rose 0.92%, with a cumulative increase of 2.86% for the week. The British index rose 0.43%, with a cumulative increase of 1.10% for the week. The Spanish index rose 0.12%, with a cumulative increase of 1.83% for the week. The Dutch index rose 0.63%, with a cumulative increase of 2.21% for the week.

US PCE inflation cooling more than expected boosts rate cut expectations, with US bond yields falling across the board and the short end declining more sharply, the two-year US bond yield dropping by about 7 basis points, the US 10-year treasury yield rising for the week but set to fall for five consecutive months, the first time since August 2010. French CPI data drags down eurozone sovereign bond yields, and the 10-year Italian bond yield fell by over 10 basis points for the week.

• US Treasuries: At the close, the more rate-sensitive two-year US bond yield dropped by 6.95 basis points to 3.5592%, a weekly decline of 3.19 basis points, trading in the range of 3.6389%-3.5% during the period, down 35.73 basis points year-to-date since September.

• The yield on the 10-year benchmark U.S. Treasury bond fell by 4.57 basis points, to 3.7506%, with a cumulative increase of 0.92 basis points this week, trading overall in the range of 3.7242-3.8191%. From September to date, it has cumulatively dropped by 15.29 basis points.

This week, short-term U.S. bond yields fell, while benchmark bond yields rose.

• Eurozone: The yield on the 10-year German benchmark bond fell by 5.0 basis points, with a cumulative decrease of 7.5 basis points this week, dropping rapidly to 2.109% on Friday after French CPI data was released. The two-year German bond yield fell by 5.3 basis points, with a cumulative decrease of 15.5 basis points this week. The 10-year French government bond yield fell by 6.3 basis points, with a cumulative decrease of 4.7 basis points this week. The 10-year Italian government bond yield fell by 3.2 basis points, with a cumulative decrease of 10.3 basis points this week. The 10-year UK government bond yield fell by 2.9 basis points, with a cumulative increase of 7.8 basis points this week. The two-year UK bond yield fell by 2.1 basis points, with a cumulative increase of 1.3 basis points this week.

Following PCE data, the DXY Dollar Index fell by over 0.4% to its lowest level in 14 months during regular trading hours, erasing all gains since mid-July over four consecutive weeks. With the 'hawkish' Yoshihide Suga elected, the Japanese yen strengthened to nearly 142. The offshore yuan has risen for two consecutive weeks, erasing all declines since mid-May. With the catalyst of rate cuts, Bitcoin has risen for three consecutive weeks, heading towards its best September ever.

• DXY, the U.S. Dollar Index measuring against a basket of six major currencies, fell by 0.14%, to 100.425 points, with a cumulative decrease of 0.31% this week. The U.S. dollar had briefly risen to touch 100.886 during the Asian session but started to decline towards the end of the Asian market session, accelerated by the release of PCE data and hitting a new daily low of 100.149.

• The Bloomberg Dollar Index fell by 0.16%, to 1219.14 points, with a cumulative decrease of 0.39% this week.

The U.S. dollar has weakened for the fourth consecutive week, hitting a 14-month low.

• Non-dollar currencies: Euro against the dollar fell by 0.12%, to 1.1164, roughly flat for the week, erasing the previous gains; Pound against the dollar fell by 0.31%, to 1.3373, moving away from a two-year high, with a weekly gain of 0.39% and two consecutive weeks of gains; Dollar against the Swiss franc fell by 0.67%, to 0.8406, a weekly decline of 1.12%; Among the commodity currencies, the Australian dollar against the dollar rose by 0.09%, to 0.6902, the New Zealand dollar against the dollar rose by 0.21%, to 0.6341, and the dollar against the Canadian dollar rose by 0.38%, to 1.3516.

• Yen pushes above 142 again: Hawkish monetary policy will be the next Japanese prime minister, the yen against the dollar quickly rebounded from falling below 146, rising to nearly 2% to push above 142, marking the largest single-day percentage increase in almost eight weeks and the highest in over a week, with a weekly gain of nearly 1.2%. Yen against the euro rose by 1.90%, to 158.78 yen; Yen against the pound rose by 2.11%, to 190.168 yen.

• Offshore Renminbi (CNH): Offshore Renminbi fell by 86 points at the close, at 6.9816 yuan, trading overall in the range of 6.9719-7.0043 yuan during the day. It recorded a cumulative increase of 605 points or approximately 0.86% for the week, marking a second consecutive week of increases and the largest single-week surge since August 2. Offshore Renminbi rose by a hundred points at one point during the day to push towards 6.96 yuan, with a high fluctuation of nearly 440 points, while U.S. stocks traded slightly lower during the day, still at a 16-month high.

• Most cryptocurrencies rose. The largest market cap leader Bitcoin rose by 1.56% at the close, to $66,235.00, with a weekly gain of 4.55%. The second largest Ethereum rose by 1.74% at the close, to $2,718.50, with a weekly gain of 5.92%.

• Loose financial conditions fuel risk appetite, with Bitcoin up more than 10% this month, while the average decline for September over the past ten years was 5.9%. Reports indicate that on September 27, local time, Binance founder Zhao Changpeng was released in the U.S. Earlier reports from Securities Times suggested that he is expected to return to society on September 29.

Bitcoin rises for a third consecutive week, breaking through $66,000 on Friday.

This week, the situation in Libya eased, Saudi Arabia considered increasing production, investors worried about oil demand prospects, Wall Street major banks had pessimistic expectations, all bearish news overshadowed the impact of the Middle East tensions. U.S. oil fell nearly 4% this week, giving back almost all the gains of the past two weeks. U.K. and Dutch natural gas rose by about 10% this week, New York natural gas rose by about 7%.

• U.S. oil: WTI November crude oil futures closed up $0.51, a gain of 0.75%, at $68.18 per barrel, with a weekly decline of 3.97% halting the two-week consecutive gains. U.S. oil continued to fall during the Asian session, dropping over 0.9% to approach $67 per barrel, while U.S. stocks surged in early trading, rising over 1.4% to break through $68.60 per barrel.

• Crude oil: Brent November crude futures closed up $0.38, up 0.53%, at $71.98 per barrel, with a weekly decline of 3.37%. Crude oil continued to decline in the Asian session, fluctuated in the European session, and dropped by nearly 1% in early trading of U.S. stocks, breaking through $71. Later, it accelerated to rise, hitting a daily high of nearly 1.1% and breaking through $72.30.

• Natural Gas: U.S. November natural gas futures rose by 5.41%, to $2.9020 per million British thermal units, with a weekly increase of 6.73%. The TTF Dutch natural gas futures rose by 4.02%, to 38.030 euros per megawatt hour, with a weekly increase of 9.87%. ICE UK natural gas futures were roughly flat, at 91.450 pence per therm, with a weekly increase of about 10.85%.

Despite various stimulus measures and escalating risks of conflict in the Middle East, oil prices fell this week.

Driven by global central bank rate cuts, safe-haven demand, and strong central bank purchases, gold hit new highs for four consecutive days before Friday, achieving a three-week rally. In this quarter, it rose by about 14%, the best in eight years, and a year-to-date increase of about 29%, the largest in fourteen years. Copper retreated from the 0.01 million dollar round number mark on Friday, remaining up over 5% for the week, while aluminum rose over 6% to a sixteen-week high.

• Gold: COMEX December gold futures fell throughout the day, dropping to nearly 1.1% below $2660 after midday trading, closing down 0.5% to $2681.4 per ounce at the end of the session, departing from the intraday high of $2708.70 on Thursday, with a weekly increase of 1.39%.

• Spot gold fell throughout the day, dropping nearly 1.1% below $2640 after midday trading, departing from the intraday high of $2685.61 on Thursday, and closing down 0.53% at $2658.24 per ounce at the end of the session, with a weekly increase of 1.38%.

• Silver: COMEX December silver futures rose by nearly 0.8% in pre-market trading, approaching $32.60, then dropped over 2.1% below $31.60 after midday trading of U.S. stocks, closing down 1.18% at $31.925 per ounce at the end of the session, with a weekly increase of 1.51%.

• Spot silver rose by nearly 0.9% in pre-market trading, approaching $32.30, then dropped over 2% below $31.30 after midday trading of U.S. stocks, closing down 1.41% at $31.5675 per ounce at the end of the session, moving away from twelve-year highs, but with a weekly increase of 1.25%.

• Analysis indicates that due to the market betting that the Federal Reserve and global central banks will further cut interest rates in the future, even though speculative demand has pushed gold prices to 'oversold' technical levels, some investment banks still expect gold prices to rise. Philip Streible, Chief Market Strategist at Blue Line Futures, said that gold prices could rise to $3000 this year, as tensions in the Middle East may escalate, labor market conditions may continue to deteriorate, the Federal Reserve may cut interest rates by another 50 basis points, and China may increase policy stimulus.

• London industrial metals rose on a weekly basis. The economic bellwether 'Dr. Copper' fell by 0.97% to $9982 per ton, accumulating a nearly 5.34% increase this week. COMEX copper futures fell by 1.24% to $4.5905 per pound, with a weekly gain of 5.70%. London zinc fell by $10, with a weekly gain of over 7.51%. London aluminum rose by 1.34%, with a weekly gain of about 6.48%. London tin rose by 1.47%, recording a weekly gain of over 2.44%. London lead fell by $18, with a weekly gain of over 3.16%. London nickel rose by 1.50%, with a weekly gain of over 2.94%.

Gold has risen for the third consecutive week, reaching new highs for several days this week.

Editor/Rocky