official Daily Market Analysis From Forexmart.eu

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S&P 500 Erases Losses: Week in Review and Wall Street Scenarios for Next Week

Markets Stabilize: S&P 500 Ends Week Little Changed
The S&P 500 stock index showed solid gains on Friday, managing to almost completely recoup losses suffered earlier in the week amid recession fears and a curtailment of global yen-financed trade. The market remained almost flat for the week, despite sharp fluctuations.

Technology Pulls Market Up
Technology was the biggest contributor to the S&P 500's gains on Friday, proving to be the engine that pulled the market out of the negative territory. Meanwhile, the Cboe Volatility Index, known as Wall Street's "fear gauge," fell sharply after a sharp jump earlier in the week.

Monday's swings and recession fears
The market had a particularly bad start to the week, with a sharp drop on Monday continuing the sell-off that began the previous week. Investors were spooked by a weaker-than-expected July employment report, raising concerns about a possible recession. In response, many began to close their carry trades linked to the Japanese yen.

Investors looking for a foothold
"Investors are trying to determine whether the market has bottomed out," said Robert Phipps, managing director at Per Stirling Capital Management in Austin, Texas. He said the market is in a period of high uncertainty, and participants are actively looking for signals for further action.

Fed Offers Confidence
The Federal Reserve said Thursday that slowing inflation is setting the stage for a possible rate cut in the future. However, they said any decisions would be based on current economic data, adding to the uncertainty.

Waiting for More Data
It's been a volatile week, with investors eagerly awaiting more data on inflation, corporate earnings, and presidential polls. These could be key factors in determining the direction of U.S. stocks and helping to smooth out the current market turbulence.

Market Volatility: U.S. Stocks on a Swing
The quiet months in U.S. stock markets have suddenly given way to bouts of volatility. Sharp price movements became a new reality for investors in August, driven by a string of worrisome economic data that coincided with the completion of a major deal financed by the Japanese yen. The deal triggered the biggest selloff in stocks this year. Despite recent recovery efforts, the S&P 500 remains 6% below its all-time high set last month, though it has rebounded from a dramatic plunge earlier in the week.

Recovery May Take Time
While the past few days have brought relief in the form of rising stocks, experts warn against expecting calm to return to markets anytime soon. Historical data on the Cboe Volatility Index, also known as Wall Street's "fear gauge," shows that periodic spikes in volatility can last for months. On Monday, the index posted its biggest one-day gain, indicating a high degree of anxiety among investors.

Wall Street's Fear Gauge: Echoes of Anxiety
The Cboe index measures demand for options, which provide protection against sharp market swings. When the index closes above 35, as it did on Monday, it takes about 170 trading sessions on average for the market to return to calmer levels. This is in line with the index's long-term median of 17.6, signaling significantly less anxiety among market participants.

New Test: Inflation Data
A new potential test for the market is on the horizon. On Wednesday, U.S. consumer price data will be released. If inflation shows too sharp a decline, it could fuel concerns that the Federal Reserve has made a mistake in leaving interest rates high for too long. This could lead to further market instability as investors worry that tight monetary policy will push the economy into recession.

U.S. stocks, which have been going through periods of ups and downs, are in a state of heightened anxiety, and there are no signs that this situation will change quickly. Investors continue to watch the new data closely, hoping for stability that so far seems out of reach.

Market ends week with minimal changes
Friday's trading ended with a slight increase in the main indices, which allowed them to compensate for some of the weekly losses. The Dow Jones Industrial Average added 51.05 points, which corresponds to an increase of 0.13%, and reached 39,497.54. The S&P 500 index rose by 24.85 points, or 0.47%, closing at 5,344.16. The Nasdaq Composite also showed positive dynamics, increasing by 85.28 points, or 0.51%, and ended trading at 16,745.30.

Weekly results: small losses against expectations
Despite the positive end of the week, the indicators for the week as a whole were in the negative. The S&P 500 fell 0.05%, the Dow Jones lost 0.6%, and the Nasdaq Composite slipped 0.2%. The current market situation reflects the nervousness of investors who are waiting for more signals from the Federal Reserve.

Waiting for the Fed's decision: What's next?
Michael James, managing director of equities at Wedbush Securities, notes that the market will remain in a state of heightened uncertainty until the next Federal Reserve meeting on September 17-18. The main focus of traders is on whether the Fed will decide to cut interest rates by 25 or 50 basis points. According to CME Group, the probability of a 50 basis point cut is estimated at 51%, while the probability of a softer 25 basis point cut is 49%.

Investors Await Inflation Data
In addition to the Fed's decisions, investors are eagerly awaiting consumer price and retail sales data for July, due out next week. These figures could provide a clearer picture of whether the U.S. economy will avoid a hard landing and provide direction for the market going forward.

Yearly Gains: Tech on the Rise
Despite recent wobbles, all three major indexes have continued to post strong gains since the start of 2024, helped by strong earnings from major tech companies and optimism around artificial intelligence. Stocks have shown strong gains early in the year, helping the market stay positive amid the overall turbulence.

Investors continue to watch the events unfold, awaiting more economic data and policy decisions to see where the market will head in the near future.

S&P 500 and Nasdaq Continue Strong Gains
The S&P 500 and Nasdaq have both posted impressive gains to end the year, up about 12% each since Dec. 31. The recent selloff in stocks has made tech stocks more affordable on a price-to-earnings basis, bringing them back into the spotlight.

The Day's Winners: Take-Two and Expedia
Friday's trading was marked by gains for individual stocks, particularly in the tech and entertainment sectors. Video game publisher Take-Two Interactive Software jumped 4.4% after forecasting higher net bookings in fiscal years 2026 and 2027. Meanwhile, online travel agency Expedia rose 10.2% after reporting quarterly earnings that beat analysts' expectations.

Trading Activity: What's Happening on the Stock Markets?
Trading volume on U.S. exchanges on Friday was 11.13 billion shares, slightly below the 20-day average of 12.59 billion. Advancing stocks outnumbered declining stocks on the New York Stock Exchange by a 1.39-to-1 ratio. However, the situation was slightly different on the Nasdaq, with decliners outnumbering gainers by a 1.14-to-1 ratio.

New Highs and Lows: Who's Leading the Way?
The S&P 500 posted 15 new 52-week highs and just three new lows, while the Nasdaq Composite was more mixed, with 52 new highs and 159 new lows. The data reflects continued uncertainty in the market despite the overall gains in the indices.

Market Expectations: Rate Cuts on the Horizon?
Futures markets are increasingly biased toward the Federal Reserve cutting its benchmark interest rate by 50 basis points at its next meeting in September. The probability of this scenario is estimated at 55%, a sharp change from the 5% chance recorded a month ago.

Economic Risks: A New Reality
Slower wage growth confirms that economic risks in the U.S. are becoming more balanced, especially against the backdrop of lower inflation and slower economic activity, said Oscar Munoz, chief U.S. macro strategist at TD Securities, emphasizing that the current economic environment requires special attention and caution from investors and analysts.

The market remains in a state of anticipation, and the coming months will show whether U.S. stocks can continue their rally or face new challenges.

Corporate Earnings Do Not Send Clear Signals to the Market
Corporate earnings for the second quarter did not have a significant impact on the market, leaving investors in uncertainty. Charles Lemonides, head of hedge fund ValueWorks LLC, said the results were neither strong nor weak enough to provide a clear direction for the market.

Solid Results: S&P 500 Meets Expectations
The S&P 500 reported results that were, on average, 4.1% above analysts' estimates. That's close to the long-term average of 4.2% above expectations, according to LSEG. While the results suggest stability, they haven't significantly changed market sentiment.

Earnings to Watch: Walmart, Home Depot, Nvidia
Investors will be focused on earnings next week from giants like Walmart and Home Depot, which could provide insight into how U.S. consumers are coping with the effects of a prolonged period of high interest rates. Also expected by the end of the month is earnings from chip giant Nvidia, whose shares have already risen an impressive 110% year-to-date despite recent market wobbles.

Jackson Hole Meeting: Key Event for the Fed
The Federal Reserve's annual meeting in Jackson Hole, scheduled for August 22-24, will be a key venue for monetary policy discussions ahead of the Fed's September meeting. The event is attracting investors' attention because it could provide insight into the regulator's next steps amid ongoing economic uncertainty.

Volatility as a Signal to Action
Lemonides, an investment expert, believes that recent market volatility is a natural and healthy correction in a strong bull market. He sees it as an opportunity for strategic investing and recently began building positions in Amazon.com, betting on a recovery from the recent weakness in its shares.

Political Uncertainty Rises
The U.S. presidential race is also adding uncertainty to the market. According to an Ipsos poll released Thursday, Democratic candidate Kamala Harris leads Republican Donald Trump 42% to 37% in the upcoming November 5 election. Political instability will certainly be a factor in investor sentiment in the coming months.

Investors continue to monitor developments, waiting for new data and signals that will help determine the future direction of the markets.

Kamala Harris Enters the Presidential Race
Vice President Kamala Harris officially entered the presidential race on July 21, after President Joe Biden ended his campaign following a poor performance in the June 27 debate against Donald Trump. The decision significantly changed the political landscape, adding intrigue to the race.

Election Turbulence: Markets Anticipate More Twists
With three months to go until the November 5 election, investors are bracing for more surprises in what has already been a dramatic election year. According to JPMorgan analysts, the early stages of the campaign provided a clearer picture of the likely outcome of the presidential and congressional elections, but recent events have once again thrown the outcome into doubt.

Election Volatility: Experts' View
Chris Marangi, co-chief investment officer at Gabelli Funds, predicts that the presidential race will inevitably lead to increased volatility in financial markets. However, he believes that the expected rate cuts in September could cause capital to rotate into sectors of the market that have been lagging amid the dominance of Big Tech.

"We expect volatility to increase during the election period, but at the same time, we expect the market to continue to rotate as lower rates offset economic weakness," Marangi said.

Political and Economic Uncertainty: What's Next?
The election year has already become one of the most unpredictable in recent memory, and investors continue to closely monitor political events, trying to assess their impact on the economy and markets. As November approaches, volatility is likely to only increase, adding new challenges for all market participants.
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Awaiting CPI: How Wall Street is preparing for the next round of events

Wall Street ends trading session with mixed results as investors await key economic data
Wall Street ended trading mixed on Monday as market participants prepared for important economic data to be released this week. Investors are particularly focused on the upcoming U.S. consumer price data, which will determine the future course of the Federal Reserve's monetary policy.

Indexes mixed
The Dow Jones Industrial Average lost ground, while the benchmark S&P 500 and tech-heavy Nasdaq Composite ended modestly higher. Meanwhile, the Russell 2000 index of smaller companies fell 0.9%.

Popular rotation is losing momentum
"The recent trend of investors to switch to smaller companies like the Russell 2000, cyclicals and financials has already begun to wane," said James Abate, chief investment officer at Centre Asset Management in New York. He said current economic conditions are not conducive to sustained earnings and stock price growth.

Focus on Consumer Prices and Retail Sales
Investors are looking ahead to the U.S. consumer price index (CPI) this week, due on Wednesday. The data is expected to show inflation accelerating 0.2% in July from June, with the annual inflation rate remaining at 3%.

Market participants are also focused on reports from major retailers, which will help gauge current consumer demand.

Rate Forecasts: What the Market Expects
The consensus in the money market is that the Fed could cut interest rates by 25 or 50 basis points as early as September. According to CME's FedWatch tool, a total monetary easing of 100 basis points is expected by the end of 2024.

Investors Await Retail Sales Data: Potential Impact on the Economy
Investors will be focused on the US retail sales report for July on Thursday. While expectations point to a modest increase, any weakness in the data could reignite concerns about slowing consumer demand and even the possibility of a recession.

Walmart and Home Depot earnings under scrutiny
Big retailers like Walmart and Home Depot are also set to report earnings in the coming days. The results will be closely watched by analysts and investors as they provide an important indicator of the health of the consumer market amid rising unemployment.

Market Risks: Inflation and Consumer Sentiment
James Abate, chief investment officer at Centre Asset Management, warns that a surprise rise in inflation that exceeds expectations could seriously disappoint the market. He says retail earnings are especially important now given recent signs of labor market trouble.

Indices mixed
The trading session ended mixed, with the S&P 500 up 0.23 points to 5,344.39 and the Nasdaq Composite up 35.31 points, or 0.21%, to 16,780.61. Meanwhile, the Dow Jones Industrial Average fell 140.53 points, or 0.36%, to close at 39,357.01.

Starbucks on the rise, KeyCorp attracts investors
Starbucks shares soared 2.58% after reports that activist investor Starboard Value, which holds a stake in the company, is pushing for measures aimed at boosting the coffee giant's stock.

KeyCorp also posted a strong gain of 9.1% after Canadian bank Scotiabank announced it had acquired a minority stake in the U.S. regional lender for $2.8 billion.

Hawaiian Electric's Future in Doubt
Meanwhile, Hawaiian Electric shares plunged 14.45% as the utility expressed concerns about its ability to continue operating amid mounting financial difficulties.

Equity Market: Declines Prevail, but Volatility Eases
Trading on the New York Stock Exchange (NYSE) and Nasdaq ended with decliners dominating. On the NYSE, the ratio of decliners to gainers was 1.46 to 1, while on the Nasdaq, the ratio was even higher at 1.54 to 1.

New Highs and Lows: Daily Stats
The S&P 500 posted 10 new 52-week highs and 7 new lows, while the Nasdaq Composite posted 51 new highs and 179 new lows. These figures show that despite the overall decline, there are still some growth points in the market.

Soothing Volatility: Markets Try to Stabilize
While volatility in the markets has eased significantly since last week, when U.S. stocks suffered a sharp decline, nervousness among investors may persist for some time. The panic flare-up appears to have died down, but history shows that markets can remain under pressure for months.

Cboe Volatility Index Returns to Normal
The Cboe Volatility Index, commonly known as the VIX and often referred to as the "fear index," has stabilized near 20 after hitting a four-year high last week. That's down from its recent peak of 38.57 on August 5. The rapid decline in the VIX is a sign that the sharp moves in the market were driven by short-term factors, such as the unwinding of highly leveraged positions, rather than fundamental issues related to the state of the global economy.

Bet on Stability: Short-Term Factors Dominate
Many market participants see the dissipation of fears as further confirmation that the recent collapse was driven by technicals, including the unwinding of leveraged positions and carry trades financed by the Japanese yen. Investors are confident that these factors are temporary and do not point to deeper structural problems in the global economy.

Markets Remain Tense: VIX Volatility as an Anxiety Indicator
Despite the recent decline in the VIX volatility index, history shows that markets can remain in a state of heightened anxiety for months after a sharp decline. Episodes where the VIX has risen above 35 are usually followed by a prolonged period of investor caution, which dampens the risk-taking that had previously fueled asset prices.

Volatility Takes Time to Normalize
According to experts, after the VIX reaches a level above 35, which is often associated with a high degree of anxiety among market participants, it takes about 170 trading sessions on average for the index to return to its long-term median of 17.6. This highlights that even after an initial calm, markets can remain volatile for a long time.

Investors Are Temporarily Calmed, But Anxiety Remains
J.J. Kinahan, CEO of IG North America and president of online broker Tastytrade, said: "Once the VIX stabilizes in a range, investors begin to feel more relaxed again. However, shocks like the current one usually linger in the memory for six to nine months, maintaining a heightened sense of caution."

The S&P 500's Long Rise
The recent turmoil in the U.S. stock market has come after a long period of stability and growth. The S&P 500 has risen 19% for the year, hitting a record high in early July. However, the rally has proven to be unsustainable: poor earnings reports from several major tech companies in July triggered a massive sell-off, sending the VIX rising from the low end of the tens of points to higher levels.

Unexpected BOJ Action Adds Volatility
The crisis deepened in late July and early August when the BOJ unexpectedly raised interest rates by 25 basis points. The move hurt carry traders who had borrowed cheaply in Japanese yen to invest in high-yielding assets such as U.S. tech stocks and Bitcoin.

Fast Fall and Rebound: Positional Risk Dominates
Mandy Xu, head of derivatives research at Cboe Global Markets, said the sharp market decline followed by an equally rapid rebound suggests that the current gyrations are largely due to position unwinding and risk shifting among market participants.

Volatility Isolated: Equities and FX Under Pressure
Mandy Xu, head of derivatives research at Cboe Global Markets, stressed that recent spikes in volatility, such as the one seen on August 5, have been concentrated in equities and FX. She noted that other asset classes, such as interest rates and credit, have not seen a significant increase in volatility, suggesting that the current swings are limited.

Investor Jitters: Awaiting Key Data
With uncertainty still looming, investors have every reason to be nervous in the coming months. The biggest worry remains economic data due out of the US. The consumer price report due out later this week will be a key indicator of whether the economy is facing a short-term slowdown or heading for a more serious slowdown.

Political Tensions Add to Uncertainty
Political uncertainty is also adding fuel to the fire. With the US elections in November and tensions rising in the Middle East, investors remain on edge as they watch for developments that could significantly impact the market.

Awaiting Inflation and Retail Earnings Data
Investors will be focused on the CPI data due out on August 14. In addition, earnings reports from giants like Walmart and other major retailers this week could be key to shaping market sentiment. Mark Hackett, head of investment research at Nationwide, said these data could have a decisive impact on investor behavior.

Emotional reactions in the market: forecasts and risks
"It is not surprising that in light of recent events, investors may overreact to inflation data, retail earnings and retail sales," Hackett said. In the current emotional environment, any deviations from expectations could cause significant volatility.
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Wall Street Bulls: Weak PPI Data Pushes Market Higher

Indices Rise on Rate Cut Expectations

US stock markets posted solid gains on Tuesday, finishing at a nearly two-week high. The gains were driven by data showing slower PPI growth, bolstering expectations for a Federal Reserve rate cut as early as September.

Slow Producer Price Growth: What It Means for the Economy

US producer prices increased less than expected in July, according to new data. This was due to a decline in services costs, which offset the rise in goods prices. On an annualized basis, the producer price index (PPI) rose by 2.2%, which is lower than the 2.7% increase in June. This suggests that inflationary pressures continue to ease, which supports market optimism about possible monetary easing.

Expectations of rate cuts boost the market rally

Wall Street reacted positively to the data, betting on interest rate cuts soon. According to Paul Ashworth, chief North American economist at Capital Economics, while the modest 0.1% month-on-month increase in PPI and the flat core PPI may not seem like much, they are still in line with the Fed's target of inflation below 2% year-on-year.

Investors await new data

Market participants' attention is now focused on the upcoming consumer price data for July, which will be published on Wednesday, and retail sales data, expected on Thursday. These reports will help investors form clearer expectations about the Fed's further actions.

Michael James, managing director of equity trading at Wedbush Securities, noted that the stable PPI data confirms the effectiveness of the Fed's efforts to control inflation. He also emphasized that the likelihood of a rate cut in the near future is becoming increasingly real.

Thus, the market is optimistic about the prospects for monetary easing, which contributed to today's growth of indices.

Crucial inflation data

Ahead of the publication of the consumer price index, market participants are in a state of heightened anxiety. Economists and investors agree that any deviations in inflation indicators can significantly affect the dynamics of trading. "Any information we get tomorrow morning will have a significant impact on the market because everyone is very tense right now," analysts said.

Cut bets: The odds are rising

The chances that the US Federal Reserve will decide to cut rates by 50 basis points has risen to 55%, according to the latest FedWatch data from CME. That's a significant increase from less than 50% before the latest report. Traders are increasingly confident that the Fed will take such a step, given the current economic conditions and the need for monetary easing.

Market wobbles: Unpredictability continues

Uncertainty reigned in trading on Monday. The S&P 500 (.SPX) was little changed, showing a muted reaction to the latest economic news, while the Nasdaq (.IXIC) posted a small gain. This came after a week of mixed economic reports and an unexpected rate hike by the Bank of Japan.

The S&P 500 (.SPX) closed the day up 90.04 points, or 1.68%, at 5,434.43. The Nasdaq Composite (.IXIC) rose 407.00 points, or 2.43%, to 17,187.61. The Dow Jones Industrial Average (.DJI) also advanced 408.63 points, or 1.04%, to 39,765.64.

Sector Winners and Losers

Among the sectors, information technology (.SPLRCT) and consumer discretionary (.SPLRCD) were the top gainers. These sectors continue to attract investors amid robust demand and a positive outlook.

Meanwhile, energy stocks (.SPNY) came under pressure. The fall in oil prices, caused by OPEC's decision to revise down its 2024 demand growth forecast, was compounded by concerns about potential supply disruptions due to the ongoing conflict in the Middle East. This led to a decline in energy stocks despite the overall optimism in the market.

Thus, the market is eagerly awaiting tomorrow's inflation data, which could be decisive for the Federal Reserve's further actions and the indexes.

Russell 2000 on the rise

The Russell 2000 index, which measures the performance of small companies, showed a solid increase of 1.6%. The result highlights the positive sentiment of small business investors despite overall market volatility.

Starbucks' Historic Surge

Starbucks shares soared a record 24.5%, marking the company's biggest one-day gain ever. The gains came after Brian Niccol, formerly of Chipotle Mexican Grill, was named chairman and CEO of Starbucks. Investors were enthusiastic about the news, seeing it as an opportunity to further grow and strengthen the company's market position.

Chipotle Shares Slip

In contrast, Chipotle shares fell 7.5% following the appointment. The decline may reflect investor concerns about the company's future without Niccol, who has been instrumental in its success.

Home Depot: Mixed Results

Home Depot shares also rose 1.2% despite announcing a decline in full-year profit and an expected drop in same-store sales. The company was able to recoup early losses, indicating investor confidence in its long-term prospects.

BuzzFeed: Narrowing Losses Boosts Shares

BuzzFeed posted a stunning 25.9% gain after the company reported a quarterly report in which it narrowed its second-quarter net loss to $6.6 million from $22.5 million a year earlier. The gains encouraged investors, leading to a sharp jump in the stock.

Exchange Dominance: Gainers Lead the Way

On the New York Stock Exchange, gainers outnumbered decliners by a wide margin 4.36-to-1. On the Nasdaq, the ratio was 2.59-to-1, indicating that optimism was prevalent among market participants.

New Highs and Lows

The S&P 500 posted 17 new 52-week highs and three new lows, while the Nasdaq Composite posted 55 new highs and 128 new lows. The data highlights the mixed dynamics of the market, with some stocks peaking and others struggling.

Global Stocks Rise, Bond Yields Fall

The MSCI World Stock Index rose 1.5%, indicating that global markets are strengthening. Meanwhile, U.S. Treasury yields fell on expectations of monetary easing. The 10-year Treasury yield fell to 3.8484% and the two-year yield fell to 3.9398%, reflecting growing expectations of interest rate cuts.

The broad-based rally in stocks and the decline in bond yields underscores investor confidence in further monetary easing and a stabilizing economic environment.

STOXX 600 and Nikkei on the rise again

Europe's STOXX 600 index gained 0.5% and Japan's Nikkei jumped more than 3% after the holiday, providing a welcome break from the volatility of the past week. The recent volatility in the markets began with a sharp sell-off, fueled by a stronger yen and growing concerns about a possible recession in the US.

Yen Strengthens: New Round Against the Dollar

The yen has continued to strengthen, reaching 146.77 per dollar, representing a significant recovery from a seven-month high of 141.675 hit early last week. By comparison, the yen was at a 38-year low of 161.96 per dollar in early July, highlighting the scale of recent moves in the currency market.

Carry Trade Challenges: Unpredictable Japanese Policy

The Bank of Japan's rate hike last month following a series of foreign exchange market interventions has forced many investors to rethink their strategies. Popular carry trades, which use the yen as a low-interest currency to fund higher-yielding investments, have been particularly hard hit. This has led to significant market corrections as investors have begun to unwind their yen positions en masse.

Sharp Unwinding: Investors Pull Back Fast

As of August 6, leveraged funds, including hedge funds and asset managers, have unwound their yen positions at the fastest pace since March 2011. The rapid unwinding reflects market participants' concerns and attempts to minimize risk in a volatile environment.

Forward to the Future: The Yen Will Remain in Focus

Carsten Junius, chief economist at Bank J. Safra Sarasin, noted that the current dollar-yen exchange rate now better reflects the yield differential between the two currencies. However, he believes that further unwinding of the carry trade financed by the yen could further strengthen the Japanese currency by the end of the year. At the same time, he does not expect USD/JPY to fall significantly below 140.

Thus, with markets recovering and exchange rates continuing to adjust, investors will remain focused on the yen and the Bank of Japan's decisions, which could continue to influence global financial markets.

The Fed at a crossroads: upcoming decisions in question

This week, investors are awaiting the release of key economic data that could influence the Federal Reserve's (Fed) next steps. At the moment, forecasts are divided: some see the Fed cutting rates by 25 basis points, while others expect a more aggressive 50 basis point cut at the September meeting.

Traders are betting: a 100 basis point cut?

Amid speculation about what the Fed might do, traders are pricing in the possibility of a rate cut of as much as 100 basis points within a year. That scenario has gained traction after last week's weak payrolls data sent markets lower, although strong economic data from the US have eased fears of a slowdown.

Inflation in the crosshairs: Dollar weakness possible

Christina Clifton, senior economist at the Commonwealth Bank of Australia, said any sign of easing inflation pressures could push financial markets into anticipation of a sharp rate cut by the Fed. That could put the dollar under pressure as investors look to possible monetary easing.

Upcoming data: Inflation and retail sales

July consumer price index (CPI) data is due out on Wednesday, with monthly inflation forecast to rise to 0.2%. The data will be key to assessing the current state of the economy. Retail sales data is due out on Thursday, which could also have a significant impact on market expectations.

Bond stability and currency volatility

Eurozone bond yields remain largely unchanged as the data continues to stagnate. German 10-year yields, the region's benchmark, fell to 2.188%, off last week's low of 2.074%.

The dollar index, which tracks the U.S. dollar against six major currencies, fell 0.49% to 102.58. Meanwhile, the euro rose 0.6% to $1.09968 and the pound sterling rose 0.8% to $1.28670.

These moves in the currency market reflect the current mood of market participants, who are closely watching any signals from the Federal Reserve to anticipate the future direction of U.S. monetary policy.

Oil prices fall after sudden spike

Brent crude prices fell 1.9% to $80.78 per barrel, while WTI futures fell 2% to $78.46 per barrel.

Markets correct after wild start to week

Recall that Brent crude posted impressive gains on Monday, rising more than 3%, while WTI futures added over 4%. However, despite this rise, markets have returned to decline, indicating continued volatility in the commodity market.

Factors Affecting Price Fluctuations

Current oil price fluctuations are linked to a variety of factors, including expectations about global supply and demand, as well as geopolitical risks and economic data. These dynamic changes continue to cause sharp fluctuations in the market, forcing participants to be constantly prepared for sudden turns.
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EUR/USD. U.S. inflation slows to 2.9%. What does the pivotal report indicate?

The EUR/USD pair hit an 8-month price high on Wednesday, marking a level of 1.1048. For the second consecutive day, traders are trying to consolidate within the 1.10 figure, reacting to the inflation reports released in the U.S. On Tuesday, we received the Producer Price Index and the Consumer Price Index on Wednesday. Both reports were unfavorable for the U.S. currency, leading the U.S. Dollar Index to test the 101 figure again. To the disappointment of dollar bulls, inflation did not serve as a lifeline for the greenback. On the contrary, inflation reports have become an anchor for the dollar, both "in the moment" and (at least) in the medium term.

So, the overall CPI on an annual basis fell into the "red zone," coming in at 2.9% against a forecast of 3.0%. This is the slowest growth rate since March 2021. The index has decreased for the fourth consecutive month, indicating a clear trend. The core index, excluding food and energy prices, slowed to 3.2%. There is also a noticeable trend, as the indicator has been falling for four months.

The report's structure reveals that new cars have become 1% cheaper (down 0.9% in June), while used cars have dropped by 10.9% (following a 10.1% decline the previous month). The rate of price growth for transportation services slowed to 8.8% (after rising 9.4% in June), and clothing prices grew by 0.2% (down from 0.8%). Food prices remained unchanged at 2.2%. Energy costs increased by 1.1% (up 1% in June), but gasoline fell by 2.2% (previously down 2.5%).

The CPI report released on Wednesday adds to the overall picture, following earlier reports on the PPI and wages. On Tuesday, it was revealed that the overall PPI rose by only 2.2% year-over-year in July (forecast 2.3%). This is the first slowdown after five months of consecutive increases. The core PPI also fell into the "red zone," at 2.4% year-over-year in July (forecast 2.7%). The indicator had accelerated for the last three months, but growth rates slowed sharply in July.

In addition, the July Non-Farm Payrolls report indicated that average hourly earnings grew by only 3.6% (forecast 3.8%). This is the slowest growth rate since May 2021.

In other words, inflationary pressures in the U.S. continue to ease, and the market has reacted accordingly. According to CME FedWatch tool data, the probability of a 25-bps rate cut at the September meeting has risen to 54.5%, while the likelihood of a 50-bps cut is 45.5%.

The reaction of the EUR/USD pair was swift: the price surged nearly 150 pips over two days and is now trying to consolidate around the target level of 1.1050 (whereas before the release of inflation reports, the pair was drifting near the base of the 9th figure).

What do the latest figures indicate? Primarily, the Federal Reserve will begin to ease monetary policy in September. The only question is how much. The balance may tilt towards a 50-bps scenario after releasing the core PCE index for July (expected at the end of August) and August's Non-Farm Payrolls (to be published in early September). The outcome of these two releases will clarify how aggressively the Fed will ease monetary policy. However, the fact that the central bank will start easing monetary policy is not up for debate.

Meanwhile, the European Central Bank is puzzled by the latest inflation data in the Eurozone. To recap, the overall CPI in the Eurozone accelerated to 2.6% in July (from 2.5% in June), while the core CPI remained at the previous month's level, i.e., 2.9% (forecast was a decline to 2.8%). Inflation indicators also accelerated in Germany.

Inflation remained "stubborn" amid stronger GDP growth data for the Eurozone in the second quarter: the economy grew by 0.3% quarter-on-quarter and 0.6% year-on-year (growth has been recorded for three consecutive quarters). This situation suggests that the ECB might not rush into the next round of rate cuts—at least not in September. Such speculations have been increasingly heard in the market recently. The impending divergence between ECB and Fed rates supports EUR/USD buyers.

From a technical perspective, the pair on the H4, D1, and W1 timeframes is at the upper line of the Bollinger Bands indicator and above all lines of the Ichimoku indicator, which is showing a bullish "Parade of Lines" signal on the daily chart. Downward pullbacks are advisable for opening long positions. The main target for the upward movement is the 1.1100 level, which corresponds to the upper Bollinger Bands line on the MN timeframe.
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[KostiaForexMart]

Growth on One Side, Challenges on the Other: Unexpected Financial News from the U.S. and Asia

Sustainable Growth: Wall Street Ends Thursday with Confident Gains
Wall Street's major indexes ended Thursday's trading session with significant gains, with the Nasdaq jumping more than 2%. The gains were helped by fresh retail sales data for July, which confirmed the stability of consumer spending, dispelling fears of a possible recession in the U.S. economy.

Consumer Confidence
Nine of the S&P 500's 11 key sectors advanced, led by consumer staples and information technology.

July's retail sales report showed a 1.0% increase, up sharply from a downwardly revised 0.2% fall in June. The data helped ease concerns about a potential economic slowdown caused by last week's rise in unemployment.

Retail Giants on the Rise
Walmart, one of the world's largest retailers, surged 6.58% after raising its profit forecast for the second time this year, as U.S. consumers flocked to its stores in search of affordable essentials.

Rivals were also on the rise, with Target up 4.35% and Costco up 1.69%.

Unexpected Unemployment Decline
Separate data also helped boost investor sentiment. The number of new U.S. jobless claims unexpectedly fell last week, adding to the market's strength.

"We are seeing the wall of worry begin to crumble as sentiment improves and fundamentals are driving risk appetite," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Retail sales data beat expectations and inflation is in the low range, creating a favorable environment for equity prices to rise."

Treasury Bonds and Rates: Market Reacts to New Data
U.S. Treasury yields rose sharply after the release of new economic data. In particular, two-year and 10-year bonds showed gains, which is due to a change in trader sentiment. The probability of the Federal Reserve cutting rates by 25 basis points has now increased to 76.5%, compared to 65% before the release of the data.

Investors Await Powell Speech
Market participants are closely watching the latest economic data this week before Federal Reserve Chairman Jerome Powell delivers a key speech next week in Jackson Hole. That event could have a significant impact on the markets as investors await cues on the future of monetary policy.

Stock Markets Continue to Rise
The Dow Jones Industrial Average rose 554.67 points, or 1.39%, to close at 40,563.06. The S&P 500 gained 88.01 points, or 1.61%, to close at 5,543.22. The top gainer, the Nasdaq Composite, rose 2.34%, up 401.90 points to close at 17,594.50.

Individual Stocks Score
Cisco Systems posted a stunning 6.8% gain after announcing plans to grow first-quarter revenue above expectations and cut 7% of its global workforce.

Nike shares rose 5.07% after billionaire investor William Ackman announced a new stake, signaling renewed interest in the sportswear maker.

Ulta Beauty soared 11.17% after news that Warren Buffett's Berkshire Hathaway investment fund had acquired a significant stake in the beauty retailer.

Market Balance
Advancing stocks outnumbered declining stocks by a wide margin 3.22-to-1 on the New York Stock Exchange on Thursday. The same pattern was seen on the Nasdaq, where gainers outnumbered decliners by a ratio of 2.66-to-1.

New Record: S&P 500 and Nasdaq Riding a Wave
The S&P 500 posted 30 new 52-week highs and only one new low, while the Nasdaq Composite posted 76 new highs and 104 new lows. The numbers underscore a mixed market where companies continue to set new records despite continued volatility.

Global Trends: Europe and Asia in Focus
The situation in global markets is evolving rapidly. Past market turmoil caused by fears of a global economic downturn is quickly fading into the background. Recent data from the US has given investors confidence that the US economy is avoiding a deep crisis. This positive trend has helped calm markets and reduce fears of a possible recession.

Rates and forecasts: investors are lowering expectations
Investors are revising their expectations for further actions by the US Federal Reserve. Previously, the probability of the Fed cutting rates by 50 basis points was estimated at 55%, but now the market is showing only a 25% chance of such a significant reduction. This is due to the fact that the recent inflation report for July has allayed fears of drastic action by the Fed.

Japan's Nikkei and Yen Slip: Asian Markets Rise
In Asia, Japan's Nikkei Index stood out, jumping 3% on Friday to post its best weekly performance since April 2020. The index is on track to reclaim its record high despite recent wobbles.

The yen, on the other hand, remains under pressure, having fallen nearly 5% from a seven-month high last week.

It was last trading around 149 to the dollar. Despite the currency's apparent cheapness, volatility is forcing investors to rethink their yen exposure.

Expectations vs. Reality: What's Next?
With market sentiment shifting, investors remain cautious, although optimism about the US economy is keeping the tone positive. How the Fed will respond to the data remains a key question, and markets will be watching closely, especially as global economic uncertainty continues.

Futures and retail sales: what awaits European and US markets
Stock futures point to a positive opening in Europe and the US on Friday. Amid these expectations, investors are focused on UK retail sales data, which will be released in the morning hours in London. Forecasts suggest buyers will return to the market after an unexpected decline in June.

The Bank of England and rates: expectations for a cut
Economists and analysts continue to bet that the Bank of England may cut interest rates further this year. Such a decision is justified by easing inflation pressures and a deterioration in the economic outlook in the UK for the rest of 2024. Lower rates could support the economy, which faces new challenges.

Australia takes a different path: a bet on stability
While many central banks around the world are looking to ease monetary policy, Australia is going its own way. Reserve Bank of Australia Governor Michelle Bullock stressed on Friday that it is too early to talk about rate cuts. According to her, the country's core inflation remains too high and the bank continues to closely monitor potential risks to price increases.

Global Markets: Focus on Central Banks
The situation in global markets remains dynamic, with investors closely monitoring the actions of central banks. While the UK may be preparing for further rate cuts, Australia, by contrast, is maintaining a cautious approach. These divergent strategies reflect the different economic realities that countries face, and their possible impact on global financial markets will be in focus in the coming months.
More analytics on our website: bit.ly/3VobLUv

[KostiaForexMart]

Growth on One Side, Challenges on the Other: Unexpected Financial News from the U.S. and Asia

Sustainable Growth: Wall Street Ends Thursday with Confident Gains
Wall Street's major indexes ended Thursday's trading session with significant gains, with the Nasdaq jumping more than 2%. The gains were helped by fresh retail sales data for July, which confirmed the stability of consumer spending, dispelling fears of a possible recession in the U.S. economy.

Consumer Confidence
Nine of the S&P 500's 11 key sectors advanced, led by consumer staples and information technology.

July's retail sales report showed a 1.0% increase, up sharply from a downwardly revised 0.2% fall in June. The data helped ease concerns about a potential economic slowdown caused by last week's rise in unemployment.

Retail Giants on the Rise
Walmart, one of the world's largest retailers, surged 6.58% after raising its profit forecast for the second time this year, as U.S. consumers flocked to its stores in search of affordable essentials.

Rivals were also on the rise, with Target up 4.35% and Costco up 1.69%.

Unexpected Unemployment Decline
Separate data also helped boost investor sentiment. The number of new U.S. jobless claims unexpectedly fell last week, adding to the market's strength.

"We are seeing the wall of worry begin to crumble as sentiment improves and fundamentals are driving risk appetite," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Retail sales data beat expectations and inflation is in the low range, creating a favorable environment for equity prices to rise."

Treasury Bonds and Rates: Market Reacts to New Data
U.S. Treasury yields rose sharply after the release of new economic data. In particular, two-year and 10-year bonds showed gains, which is due to a change in trader sentiment. The probability of the Federal Reserve cutting rates by 25 basis points has now increased to 76.5%, compared to 65% before the release of the data.

Investors Await Powell Speech
Market participants are closely watching the latest economic data this week before Federal Reserve Chairman Jerome Powell delivers a key speech next week in Jackson Hole. That event could have a significant impact on the markets as investors await cues on the future of monetary policy.

Stock Markets Continue to Rise
The Dow Jones Industrial Average rose 554.67 points, or 1.39%, to close at 40,563.06. The S&P 500 gained 88.01 points, or 1.61%, to close at 5,543.22. The top gainer, the Nasdaq Composite, rose 2.34%, up 401.90 points to close at 17,594.50.

Individual Stocks Score
Cisco Systems posted a stunning 6.8% gain after announcing plans to grow first-quarter revenue above expectations and cut 7% of its global workforce.

Nike shares rose 5.07% after billionaire investor William Ackman announced a new stake, signaling renewed interest in the sportswear maker.

Ulta Beauty soared 11.17% after news that Warren Buffett's Berkshire Hathaway investment fund had acquired a significant stake in the beauty retailer.

Market Balance
Advancing stocks outnumbered declining stocks by a wide margin 3.22-to-1 on the New York Stock Exchange on Thursday. The same pattern was seen on the Nasdaq, where gainers outnumbered decliners by a ratio of 2.66-to-1.

New Record: S&P 500 and Nasdaq Riding a Wave
The S&P 500 posted 30 new 52-week highs and only one new low, while the Nasdaq Composite posted 76 new highs and 104 new lows. The numbers underscore a mixed market where companies continue to set new records despite continued volatility.

Global Trends: Europe and Asia in Focus
The situation in global markets is evolving rapidly. Past market turmoil caused by fears of a global economic downturn is quickly fading into the background. Recent data from the US has given investors confidence that the US economy is avoiding a deep crisis. This positive trend has helped calm markets and reduce fears of a possible recession.

Rates and forecasts: investors are lowering expectations
Investors are revising their expectations for further actions by the US Federal Reserve. Previously, the probability of the Fed cutting rates by 50 basis points was estimated at 55%, but now the market is showing only a 25% chance of such a significant reduction. This is due to the fact that the recent inflation report for July has allayed fears of drastic action by the Fed.

Japan's Nikkei and Yen Slip: Asian Markets Rise
In Asia, Japan's Nikkei Index stood out, jumping 3% on Friday to post its best weekly performance since April 2020. The index is on track to reclaim its record high despite recent wobbles.

The yen, on the other hand, remains under pressure, having fallen nearly 5% from a seven-month high last week.

It was last trading around 149 to the dollar. Despite the currency's apparent cheapness, volatility is forcing investors to rethink their yen exposure.

Expectations vs. Reality: What's Next?
With market sentiment shifting, investors remain cautious, although optimism about the US economy is keeping the tone positive. How the Fed will respond to the data remains a key question, and markets will be watching closely, especially as global economic uncertainty continues.

Futures and retail sales: what awaits European and US markets
Stock futures point to a positive opening in Europe and the US on Friday. Amid these expectations, investors are focused on UK retail sales data, which will be released in the morning hours in London. Forecasts suggest buyers will return to the market after an unexpected decline in June.

The Bank of England and rates: expectations for a cut
Economists and analysts continue to bet that the Bank of England may cut interest rates further this year. Such a decision is justified by easing inflation pressures and a deterioration in the economic outlook in the UK for the rest of 2024. Lower rates could support the economy, which faces new challenges.

Australia takes a different path: a bet on stability
While many central banks around the world are looking to ease monetary policy, Australia is going its own way. Reserve Bank of Australia Governor Michelle Bullock stressed on Friday that it is too early to talk about rate cuts. According to her, the country's core inflation remains too high and the bank continues to closely monitor potential risks to price increases.

Global Markets: Focus on Central Banks
The situation in global markets remains dynamic, with investors closely monitoring the actions of central banks. While the UK may be preparing for further rate cuts, Australia, by contrast, is maintaining a cautious approach. These divergent strategies reflect the different economic realities that countries face, and their possible impact on global financial markets will be in focus in the coming months.
More analytics on our website: bit.ly/3VobLUv

[KostiaForexMart]

Hot forecast for EUR/USD on August 19, 2024

The EUR/USD pair ended the past week with a relatively rapid rise. This movement again indicates strong enthusiasm among traders for long positions in the euro.

In the 4-hour chart, the RSI technical indicator is moving in the upper range of 50/70, which suggests an increase in long positions.

Regarding the Alligator indicator in the same time frame, the moving average lines point upwards.

Expectations and Prospects
Stabilization of the price above 1.1050 is necessary to strengthen the current uptrend. In this scenario, moving to the local high of 2023 is possible. Otherwise, the movement within the 1.0950/1.1050 range will likely continue for some time.

The complex indicator analysis suggests an uptrend cycle in the short-term and intraday periods.
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[KostiaForexMart]

Gold breaks records

The price of gold continued its growth on Tuesday, reaching a new record amid expectations of monetary easing by the world's leading central banks and increased demand for safe assets amid geopolitical tensions.

Gold futures on the Comex exchange rose 0.3% in August, reaching $2,563.6 per ounce. Since the beginning of the year, the price of precious metals has increased by 21.5%.

Signals of a decrease in inflation in the United States, along with a deterioration in the labor market, have increased expectations that the US Federal Reserve will soon begin to lower interest rates. Currently, the market forecasts a rate cut of 100 basis points by the end of the year. Three meetings of the American Central Bank are scheduled in 2024, and it is likely that at one of them the rate will be increased by 50 basis points instead of the standard 25 bp.

The slowdown in inflation is also observed in other large economies. For example, the central bank of Sweden on Tuesday lowered its key interest rate by 25 bps to 3.5% per annum. The regulator noted that the growth rate of consumer prices continues to slow down, approaching the target 2%. The Central Bank's management plans to cut the rate two or three times by the end of the year if the current inflation dynamics persists.
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[KostiaForexMart]

Stocks Slow as Investors Brace for Big Fed, U.S. Labor News

Asian Stocks Fall on U.S. Data Expectations

Asian stocks fell on Wednesday, halting a strong rally in global stocks as they waited for important U.S. economic data. Bond yields and the dollar fell on expectations of interest rate cuts ahead of policymakers.

S&P 500 Ends Gain

The S&P 500 (.SPX), which had been on track for eight straight sessions of gains, was down 0.2% overnight. MSCI's broad index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) also lost 0.5%. Meanwhile, U.S. and European index futures showed modest gains, up around 0.2%.

Hang Seng and JD.com under pressure

Hong Kong's Hang Seng (.HSI) fell 1%, helped by a sharp 10% drop in JD.com (9618.HK) shares after its largest shareholder, Walmart, decided to sell a significant portion of its stake.

Japan's Nikkei struggles with resistance

Japan's Nikkei (.N225) fell 1% at the open, hitting resistance at 38,000 after recently rebounding from its early August decline. However, the index had partially recovered by midday, paring its losses to 0.3%.

Experts predict possible changes

The recent sell-off in stocks has bottomed out, with recession fears replaced by hopes for a softer slowdown, according to Bank of Singapore analyst Mo Siong Sim. However, he notes that markets need confirmation before they can stabilize, and that confirmation should come from new data.

US data on the horizon

Investors will continue to focus on preliminary US employment data due out later on Wednesday. The data is expected to be revised downwards, which could put pressure on interest rates. The Federal Reserve minutes are also expected to be released, which analysts believe will confirm the regulator's appetite for easing.

Index expectations and their impact on global markets

Investors will be closely watching the publication of both US and global purchasing managers' indices on Thursday. These data promise to have a significant impact on markets, shaping future expectations for economic growth and monetary policy.

Dollar Loses Ground as Gold and Yen Rise

The dollar's weakness has served as a catalyst for a sharp rise in gold prices, which have reached new records. Against this backdrop, the Japanese yen has strengthened to 145.67 per dollar, up 1.6% on the week and an 11% rebound from its 38-year low last month.

The Euro and Rate Cut Prospects

The euro has been on a strong run, up nearly 3% since early August. At $1.1132 in Asian trading, the euro hit its highest since December last year, indicating an attempt to break key chart levels.

Interest rate futures point to a strong chance of the Federal Reserve cutting its benchmark rate by 25 basis points next month, with a one-third chance of a 50 basis point cut. Investors are pricing in a rate cut of nearly 100 basis points this year and expecting a similar cut next year.

Dollar under pressure: further weakness likely

Rabobank strategist Jane Foley says the dollar's recent weakness is likely due to rising expectations for easing from the Federal Reserve. However, she warns that these hopes may be overdone, with the risk of a short-term decline in EUR/USD below $1.10.

A look ahead to upcoming speeches and regional currencies

Investors are also looking ahead to Fed Chairman Jerome Powell's speech at the Jackson Hole Symposium on Friday, which could provide further clues as to where the Fed is headed. Meanwhile, the Australian and New Zealand dollars have shown solid gains, reaching $0.6747 and $0.6157 respectively, reflecting their positive momentum amid global economic developments.

US Bonds and Commodities: Strong Positions

Equity markets continued to be supported by bonds, with the US 10-year Treasury yield falling to 3.81% and the two-year yield holding steady at 3.99%. These figures suggest cautious optimism among investors awaiting economic data.

Commodities Resilience and China's Response

Commodities prices stabilised. Brent crude futures settled at $77.12 a barrel, indicating a recovery from recent wobbles. Iron ore in the Dalian market also hit a local bottom, helped by reports that China plans to allow local governments to buy unsold homes. The move is aimed at supporting the housing market, an important signal for the global steel market, where China plays a key role.

Impact of Chinese construction on global markets

Steel markets are sensitive to any developments in the construction industry in China, the world's largest consumer of the metal. Following the news from China, shares of major miners such as BHP, Rio Tinto and Fortescue Metals were stable in Australian markets, reflecting investor confidence in a recovery in demand.

Gold holds close to records

Gold prices remain close to the record highs set on Tuesday, hovering around $2,516 an ounce. The precious metal remains an attractive asset for investors amid global economic uncertainty.

Asia's central banks: decisions awaited

In emerging markets, attention is focused on central bank meetings in Thailand and Indonesia on Wednesday. Although neither country is expected to cut rates before the US Federal Reserve, their decisions could have an impact on regional markets.

Chinese Stocks Under Pressure After Walmart News

The yen continued to strengthen, reaching 145.5 per dollar, which, along with weak sentiment in Japanese stock markets, put pressure on stocks. At the same time, news that Walmart plans to sell its stake in JD.com sent shares of the Chinese online retailer sharply lower in Hong Kong, despite the company's recent upbeat earnings report.

Obama Back on the Frontlines: Endorsing Kamala Harris

Former US President Barack Obama returned to the national political stage on Tuesday evening to throw his support behind Kamala Harris in her tight presidential race against Republican Donald Trump. The move underscores the importance of the election and Obama's determination to ensure a Democratic victory.

Awaiting Data: The Importance of Fed Minutes

Investors are eagerly awaiting the release of Federal Reserve minutes and revisions to US labor market data on Wednesday. According to Goldman Sachs, the number of revised payrolls could fall by 600,000 to 1 million, which could create a false impression of weakness in the labor market. This data will be key to further analysis of the economic situation in the country.

Labor market under close scrutiny

Of particular importance is the upcoming US labor report, which will be released on September 6. It will be closely watched, since the situation in the labor market is now the main focus of economic policy, against the backdrop of falling inflation. It is this report that will be decisive in determining the further actions of the Fed and their impact on financial markets.

Rate markets are pricing in a decline: the dollar is under pressure

Interest rate futures are fully priced in the Fed's 25 basis point rate cut in September, with about a 30% chance of a deeper cut of 50 basis points. These expectations are putting pressure on the dollar, which is showing weakness in almost all areas.

Gold and the Euro: New Horizons

Gold continues to set records, surpassing $2,500 an ounce, reflecting its status as a safe haven in uncertain times. Meanwhile, the euro has reached $1.11, unfamiliar territory for the currency and a sign of new trends in the currency markets.

Risks on the Horizon: The Importance of Powell's Speech

However, not all analysts share the market's optimism. There is a risk that the labor market data could be stronger than expected, or that Fed Chairman Jerome Powell, speaking in Jackson Hole on Friday, will not show enough flexibility in his rhetoric. These factors could significantly change the mood in financial markets and force investors to revise their expectations.

Fear and Greed Index: From Panic to Stability

The CNN Fear and Greed Index, which measures sentiment in the stock, options and credit markets, has risen from extreme anxiety to neutral in a short period of time. This recovery suggests that investors are slowly starting to calm down after the recent turmoil.

Investors on Hold: Confirmation of the Favorable Outlook

Despite the improved sentiment, market participants remain cautious and await new economic data that may confirm or refute current forecasts. Investors are seeking clarity before diving back into risky assets, preferring to first make sure that positive trends are sustainable.

This period of waiting and analysis highlights not only the importance of data, but also the instability that still hangs over the markets, requiring caution and sober calculations from financial players.
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[KostiaForexMart]

Holding their breath: Wall Street awaits Fed decision, other big global events

Investor expectations: Stocks frozen, await Fed decision
Global stock markets paused their gains on Wednesday, stabilizing after a long rally that took them to recent record highs. Investors are awaiting confirmation that the US Federal Reserve will decide to cut interest rates, in line with their expectations.

The minutes of the Fed's July 30-31 meeting show that officials are leaning toward lowering rates at the upcoming September meeting. Fed Chairman Jerome Powell is expected to reiterate the central bank's commitment to easing policy at its annual conference in Jackson Hole, Wyoming, on Friday. The move comes after the bank successfully quelled the worst surge in inflation in 40 years.

Oil and Gold: Contrasting Trends
Oil prices fell while gold held its high, hovering near the record highs it hit on Tuesday, as the dollar weakened amid expectations of interest rate cuts.

Wall Street and Global Markets: Steady Gains
On Wall Street, the indices showed modest gains, with the Dow Jones Industrial Average (.DJI) up 0.13% to 40,889, the S&P 500 (.SPX) up 0.42% to 5,620, and the Nasdaq Composite (.IXIC) up 0.57% to 17,918.

The MSCI All Country (.MIWD00000PUS) also showed positive dynamics, adding 0.4% and almost reaching its July record. Since the beginning of the year, it has gained an impressive 13.9%.

European Markets: New Peak on the Horizon
The STOXX (.STOXX) index of 600 leading companies in Europe rose 0.3%, moving closer to its all-time high set on June 7.

Market Volatility: Investor Sentiment Under Pressure
World stocks have been volatile this month, as investors worried about U.S. employment data, which has heightened fears of a possible recession in the world's largest economy.

However, the pessimism has since given way to hopes for a soft landing, which investors see as an opportunity thanks to the expected cut in U.S. interest rates, which could begin as early as September.

Labor Market: Key Factor for the Fed
The U.S. Labor Department reported on Wednesday that job creation was significantly lower than initially expected for the period through March. The news has heightened the Federal Reserve's concerns about the health of the labor market, which in turn affects monetary policy going forward.

"The labor report confirms the futures market's assessment that the Fed is likely to cut rates at its September 18 meeting," Quincy Crosby, chief global strategist at LPL Financial, said in an email.

Futures and Bonds: Rate Cut Expectations
Futures markets have already priced in the likelihood of a 25 basis point rate cut next month, as well as a one-in-three chance of a 50 basis point cut. A 100 basis point cut is expected this year, with another 100 basis points expected next year.

U.S. Treasury yields also fell. The benchmark 10-year note shed 2.3 basis points to 3.795%, down from 3.818% late last night. The yield on two-year bonds, which is more sensitive to interest rate expectations, fell by 6.9 basis points, reaching 3.9305% from 4% late Tuesday.

Waiting for a decision: markets frozen
Thus, global markets continue to wait. Investors are focused on the upcoming Fed meeting in September, where the further course of monetary policy will be decided. Any new data on the state of the US economy could significantly affect this course, and therefore, global financial markets.

No Recession Scenario: The Fed's New Approach
Global markets find themselves in a unique situation where the prospect of a significant rate cut is not accompanied by recession risks. This is in stark contrast to five of the last seven rate-cutting cycles, when lower borrowing costs were accompanied by an economic slowdown, according to Ross Yarrow, managing director of U.S. equities at investment bank Baird.

"If we can get to a point where the Fed cuts rates, inflation comes down, and employment stays high, that would be a very positive outcome," Yarrow said. He added that such an environment could create a positive outlook for equity markets to continue to rally.

Asian Markets: Mixed Performance
Asian markets were less optimistic. The MSCI Asia-Pacific Ex-Japan Index (.MIAPJ0000PUS) fell 0.3%. In Hong Kong, the Hang Seng Index (.HSI) fell 0.7%, with JD.com (9618.HK) contributing significantly to the decline, falling 8.7% after Walmart (WMT.N) decided to sell its large stake in the company.

Japan's Nikkei (.N225) also fell 0.3%, pausing its recovery at 38,000, which had become resistance after the August collapse.

FX and Gold: Dollar Under Pressure
The weaker dollar helped gold, which neared record highs, while strengthening the yen, which has returned to 145.135 per dollar from a multi-year low hit last month.

The euro also strengthened, gaining about 3% in August to reach $1.115, its highest since December last year.

Gold and Oil: Mixed Movements
Gold prices continued to hover around $2,510 per ounce, remaining close to the record highs reached on Tuesday. At the same time, oil prices went down again: US crude oil fell by 1.69% to $71.93 per barrel, while Brent fell by 1.49% to $76.05 per barrel.

Looking Ahead: What's Next?
Overall, markets remain awaiting further actions by the Fed and their impact on the global economy. Whether the US economy can avoid a recession amid rate cuts remains an open question, but current investor sentiment is increasingly leaning towards an optimistic scenario.

Retail Sector on the Rise: JD Sports' Success
The retail sector showed strong growth, leading the leaderboard amid a significant increase in JD Sports (JD.L) shares. The UK sportswear retailer rose 5.3% after reporting a strong improvement in core sales in the second quarter, spurring investors.

Energy under pressure as oil prices fall further
The energy sector was among the laggards, falling 0.6% as oil prices fell for a fifth straight session. Investors are concerned about a possible slowdown in global oil demand, putting pressure on companies in the sector.

Key data ahead: PMIs and consumer confidence
Markets are focused on the upcoming flash purchasing managers' index (PMI) data for France, Germany, the UK and the eurozone, due between 07:15 and 08:30 GMT. These figures will help to gauge the current state of the region's economies.

Eurozone consumer confidence data is also due out today at 14:00 GMT. Later in the day, US PMI and initial jobless claims data will be released, which could have a significant impact on the market.

Key Market Moves: Aegon and Deutsche Bank
Among individual stocks, Aegon (AEGN.AS) was a notable loser, falling 4% after the Dutch insurer reported a decline in its key capital generation figure for the first half of the year. This caused concern among investors and led to a sell-off.

Meanwhile, Deutsche Bank (DBKGn.DE) shares rose 2.5% after the bank reached a settlement with more than half of the plaintiffs who had accused it of underpayment. The progress was welcomed by the market, which was reflected in the bank's share price rising.

Looking Ahead: Key Data Expectations
Investors continue to closely monitor upcoming economic data, which could be key indicators for future market developments. Particular attention will be paid to the PMI and consumer confidence indicators, which will provide an indication of the current state of the European economy and may influence sentiment in other regions.
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[KostiaForexMart]

Fed Prepares for Rate Cut: Dollar Strengthens, Stocks Slip

US Stocks Under Pressure: What's Going On?

US stock markets had a tough Thursday as investors digested new economic data and waited anxiously for further action from the Federal Reserve. Expectations were focused on a possible rate cut, which the regulator could announce as early as Friday.

Tech Sector Slips

The three major US stock indexes ended the day with significant losses. The technology sector was particularly under pressure, which was reflected in the decline of all indices. The Dow Jones Industrial Average (.DJI) lost 0.43%, reaching 40,712 points. The S&P 500 (.SPX) fell 0.89% to 5,570, while the Nasdaq Composite (.IXIC) fell 1.67% to end the day at 17,619.

Market sentiment: The Fed and the rate outlook

Market sentiment was also complicated by data from the Federal Reserve's meeting minutes released on Wednesday. According to the document, most Fed committee members believe that, subject to the expected data, a September interest rate cut will be a likely step. This statement strengthened market expectations for the regulator's future policy.

Labor market data and economic activity

Thursday also brought fresh statistics on the labor market, which showed an increase in the number of applications for unemployment benefits in the U.S. over the past week. This indicates a gradual slowdown in the labor market. At the same time, there is a decrease in business activity, which may indicate an overall slowdown in economic growth. These signs of easing inflation could give the Fed more leeway to focus on job creation.

Mortgage Rates and the Housing Market Recovery

With the economy slowing, mortgage rates have already begun to decline. This has spurred an unexpectedly strong rebound in existing home sales last month, one of the few positive signs in the current environment.

Experts' Forecasts

According to Steve Englander, market strategist at Standard Chartered Bank, the Fed minutes show that the Fed is close to achieving its inflation target. At the same time, rising unemployment increases the likelihood that the Fed will cut rates by 50 basis points in the near future.

As such, markets are anxiously awaiting the Fed's policy statements on Friday, which could shape the future of the U.S. economy and financial markets.

Expectations of a Victory over Inflation

Standard Chartered Bank's Steve Englander noted in his letter that while the Fed is not yet declaring a complete victory over inflation, it is clearly demonstrating confidence that this moment is near. Such statements heighten investor attention to the Federal Reserve's upcoming moves and their potential impact on markets.

Global Markets: A Sharp Reversal

Global stock markets, which have recently shown impressive gains after volatile swings, are under pressure again. The global stock index (.MIWD00000PUS) fell 0.6%, reflecting growing concerns among investors about the future developments in financial markets.

Europe: Growth Against the Trend

Despite the general nervousness in global markets, European stocks (.STOXX) managed to show positive dynamics, increasing by 0.35%. The leaders of growth were companies from the retail and healthcare sectors, which took advantage of the favorable market situation. Stocks were also supported by data from the euro zone, which showed an unexpectedly strong level of business activity in August.

Asian Markets in the Green

Asian stock markets also showed growth. MSCI's index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) rose 0.3%. That's a sign of some optimism in the region despite overall volatility in global markets.

Oil is recovering

Oil prices, which had been falling on concerns about global demand, have started to rise again. U.S. crude and Brent have gained about 1.4% in a day, signaling investors are returning to energy-related assets.

Bond yields and the dollar: new trends

Eurozone bond yields rose after data showed better-than-expected service sector results in August. However, wage pressures in the region have eased, adding nuance to the overall economic picture.

The dollar, which recently hit a 13-month low against the euro, has started to recover. The dollar index rose 0.4%, indicating a return of confidence in the US currency ahead of a key speech by Fed Chairman Jerome Powell scheduled for Friday. Investors will be closely watching his comments, which could influence the future direction of the dollar.

As a result, global markets continue to show mixed dynamics, with expectations of further central bank action and the impact of macroeconomic data on investor sentiment taking center stage.

The impact of a US rate cut on the global economy

A potential rate cut in the United States could create a more favorable environment for central banks in other countries, giving them more room to maneuver. On Thursday, the Bank of Korea hinted at the possibility of a rate cut in October, while Bank Indonesia said it was prepared to cut rates in the last quarter of this year. However, there is a view in financial markets that the easing process in the US will last longer than in other parts of the world, which could have a significant impact on the global economy.

Market Expectations: Rate Outlook

Interest rate futures show that investors expect the US Federal Reserve to cut rates by 25 basis points next month, with a 50 basis point cut also possible. Forecasts indicate that US rates could fall by about 213 basis points to around 3.2% by the end of 2025. In comparison, Europe is expected to cut rates by a smaller amount, about 157 basis points, which would take the rate to around 2.09%.

US Treasury yields recover

US Treasury yields have started to recover after hitting two-week lows in the previous trading session, supported by a rise in yields in European bond markets. The yield on the US 10-year note rose 8.6 basis points to 3.862% from 3.776% the day before. The yield on the 2-year note also showed significant gains, rising 9.4 basis points to 4.0161% from 3.922% late Wednesday.

FX: Euro and Pound Performance

The euro, which had been steadily rising for the month, suddenly fell 0.4%. Meanwhile, the British pound showed interesting dynamics: it hit a fresh 13-month high against the dollar earlier in the day and strengthened against the euro. This happened against the backdrop of the publication of data that confirmed a steady increase in business activity in the UK in the second half of 2024. However, by the end of the day, the pound rate had slightly corrected and amounted to $ 1.3086.

Thus, global financial markets continue to react to the actions of central banks, as well as to macroeconomic data, which entails changes in bond yields and exchange rates. Investors' attention remains focused on the upcoming Fed decisions and their possible implications for the global economy.

Gold under pressure: what is behind the price drop?

Gold prices have sharply declined by more than 1%, which is associated with a stronger dollar and rising yields on US Treasury bonds. These factors put significant pressure on the precious metal, which is traditionally seen as a safe haven for investors in times of economic instability.

Central banks at the Jackson Hole Economic Symposium

Against the backdrop of such changes, key representatives of central banks from around the world gathered in Jackson Hole for the annual economic symposium. All eyes are on Fed Chairman Jerome Powell on Friday, where his words will determine how quickly and decisively the Fed will begin its easing cycle.

Anticipating the Fed's decision: Cautious forecasts

According to analyst Ladner, Powell is likely to calm markets by signaling a rate cut in September. However, he said the Fed chairman will be cautious in his comments, not making any firm statements about the size of the cut — 25 or 50 basis points. He is expected to try to set the market up for a more modest 25 basis point cut.

Those expectations were reinforced by statements from other key Fed figures. On Thursday, Kansas City Fed President Frank Schmidt, Boston Fed President Susan Collins and Philadelphia Fed President Patrick Harker all said they believed a rate cut was imminent and could begin soon.

Investors on edge: Volatility index rises

The CBOE Volatility Index (.VIX), often used as a gauge of market anxiety, rose sharply to 18, its highest intraday reading in a week. However, the index later eased slightly to settle at 17.56.

Tech sector under attack

Among the 11 major S&P 500 sectors, tech (.SPLRCT) was the biggest loser, falling 2.1%. At the same time, the real estate sector (.SPLRCR) was among the leaders of growth, which indicates a shift in investor interests amid the current market uncertainty.

Snowflake: Optimistic forecast and unexpected decline

Amid general instability, it is worth noting individual fluctuations in company shares. For example, Snowflake (SNOW.N) improved its forecast for annual revenue from products, but this did not help to keep the company's shares from falling. Despite the positive forecast, the shares of the cloud data company fell by 14.7%, as the margin forecast remained unchanged, which disappointed investors.

Thus, amid expectations of Fed decisions and general market turbulence, investors continue to look for stable positions, which is reflected in both the movement of large indices and individual stocks.

Zoom confidently gains heights

Shares of Zoom Video Communications (ZM.O) made an impressive leap, rising by 13.0%. The sharp rise came as the company improved its full-year revenue forecast. At a time when many companies are struggling, Zoom is demonstrating its ability to not only hold its ground, but to grow, which has caught the attention of investors.

Advance Auto Parts Slide: Negative Outlook

On the back of Zoom's success, Advance Auto Parts (AAP.N) shares have seen a sharp decline, losing 17.5% of their value. This happened after the company revised its full-year profit forecast downwards. This move disappointed investors, which led to such a significant decline in quotes.

Market in the Red: Stock Market Sentiment

The mood on the stock markets was clearly not optimistic on Thursday. Declining stocks outnumbered advancing ones on the New York Stock Exchange (NYSE) 2.16 to 1. The same was true on the Nasdaq, where for every one advancing, 2.25 fell.

New Highs and Lows amid Volatility

The S&P 500 posted 58 new 52-week highs on the day, despite the overall trend being down. At the same time, there was only one new low. The Nasdaq Composite also saw activity, with 83 new highs, but also a high number of new lows, at 68.

Trading Activity amid Declining Volume

Trading activity on U.S. exchanges declined, with total trading volume at 9.79 billion shares, below the 20-day average of 11.89 billion shares. The decrease in volume may indicate investor uncertainty and the expectation of further signals from the market.

Thus, the current market fluctuations continue to demonstrate complex sentiments among investors, where fears and caution dominate against the backdrop of individual successful companies.
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Fed Makes Move: Rate Cut Sparks Sharp Rise in Wall Street Stocks

US Stocks Rise Sharply as Fed Chairman's Comments Hint at September Rate Cut
US stock markets posted significant gains on Friday as Federal Reserve Chairman Jerome Powell reiterated market expectations for a possible rate cut in September.

Powell: Now is the time to cut rates
During a highly anticipated speech at the Jackson Hole Economic Symposium, Powell said now is the time to cut the federal funds target. He noted that concerns about rising inflation have eased, allowing the Fed to be more flexible in its monetary policy.

"We have not seen a deterioration in the labor market, and we do not want to see one," Powell said in a speech that many analysts took as a clear signal to cut rates at the Fed's upcoming meeting. If the decision is made, it would be the first rate cut in four years.

Experts are confident that the Fed is ready for decisive action
The market reacted to these statements immediately. Detrick, the director of one of the analytical companies, expressed the opinion that the September meeting will open a series of further rate cuts that could continue until the end of the year. According to him, the Fed has made it clear that it is moving to an active phase of monetary easing.

Market soars: growth leaders and historical records
After the publication of Powell's statement, all three major US stock indexes experienced a significant rise. Large-cap companies such as Nvidia, Apple and Tesla stood out in particular, with their shares showing the greatest growth.

Small-caps and regional banks did not stand aside either, with indices rising by 3.2% and 4.9%, respectively. As Detrick noted, the financial sector has reached historical highs, and this rise confirms that the economy does not have serious threats on the horizon that could weaken the positions of regional banks and financial companies.

A week on the rise: markets continue to grow
At the end of the week, all three major US indices recorded positive dynamics, supported by the best weekly gain this year, demonstrated last week.

Week of anticipation: what data will influence the Fed's decision
Ahead of the September meeting of the US Federal Reserve, where the key interest rate decision will be made, analysts are expecting the receipt of a number of important economic data.

The key ones will be the revised figures for the gross domestic product (GDP) for the second quarter from the Commerce Department and the report on personal consumption expenditures (PCE), which contains the PCE price index, the Fed's main indicator of inflation.

All S&P 500 sectors are in the green: real estate leads
All 11 key sectors of the S&P 500 index ended the trading session in positive territory. The real estate sector stood out in particular, showing the most significant gain, rising by 2.0%. This growth was provided by confident investments and positive market sentiment, which supported the overall upward trend.

Workday Surprises Market: Shares Soar on Good News
HR software company Workday (WDAY.O) beat market expectations for quarterly revenue. Moreover, the company announced its intention to buy back its own shares for $1 billion. The news caused a real boom in the market: Workday shares jumped by 12.5%, becoming the leader in growth on the Nasdaq exchange.

Ross Stores and Intuit: Contrasts in the Retail Sector
Discount retailer Ross Stores (ROST.O) also showed positive dynamics, rising by 1.8%. This happened after the company raised its profit forecast for the 2024 fiscal year, which strengthened investor confidence.

At the same time, shares of Intuit (INTU.O), known for its Turbo Tax product, fell by 6.8% after publishing a quarterly report that did not meet expectations. The disappointing results caused a sharp decline in investor interest in the company.

Markets on the move: Stocks continue to rise
On the New York Stock Exchange (NYSE), the number of advancing stocks significantly exceeded the number of declining ones — the ratio was 8.08 to 1. On the Nasdaq, the situation was also in favor of advancing stocks, where there were 3.68 advancing ones for every declining one. This trend confirms investors' confidence in the stability of the economy and the upcoming decisions of the Federal Reserve.

S&P 500 and Nasdaq continue to break records: the market is on the rise
The American stock market is once again showing confident growth, confirming the positive sentiment of investors. The S&P 500 index recorded 81 new 52-week highs, without recording a single new low. At the same time, the Nasdaq Composite noted 149 new highs and 51 new lows, which underlines the high activity in the market.

Trading Volumes and Indices: Steady Gains on Wall Street
Trading activity on U.S. exchanges showed good results, although the total volume of transactions amounted to 10.57 billion shares, slightly below the average of the last 20 trading days (11.88 billion). Despite this, the key indices continued to rise.

The Dow Jones Industrial Average rose by 1.14%, reaching 41,175 points. The S&P 500 added 1.15% and stopped at 5,634, very close to its all-time high. The Nasdaq Composite showed the biggest gain among the major indices, increasing by 1.47% and reaching 17,877 points.

European and Asian Markets: Mixed Results
European exchanges also saw gains. The broader STOXX 600 index rose 0.5% to hit its highest in three weeks. The gain also put the index on track to end a third straight week of gains.

In Asia, the picture was mixed, with stocks outside Japan down slightly, 0.1%, while Japan's Nikkei rose 0.4%. The gains were supported by positive investor reactions to inflation data and comments from Bank of Japan Governor Kazuo Ueda, who has signaled a willingness to raise interest rates if economic data and inflation are in line with expectations.

Global Trends: MSCI Reaches New Levels
The impact of recent events on the global economy was reflected in the rise in the MSCI World Index, which rose about 1.1%. Despite the recent turmoil in early August, the index has risen above its all-time peak reached in mid-July, signaling a recovery in global markets and investor confidence in the stability of the global economy.

Traders Raise Rates as Rate Cut Expectations Increase
Following Fed Chairman Jerome Powell's speech, traders have increased their expectations for a rate cut in September. Fed funds futures now offer a 37% chance of a 50 basis point cut, up from 25% the day before. A total of 106 basis points of rate cuts are expected by year-end.

Powell: Fed Policy Future Dependent on Data
Jerome Powell stressed in his speech that the Fed's policy direction is clear, but the timing and speed of rate cuts will be determined by economic data and changing risks. These statements were an important signal for the market, prompting investors to revise their forecasts.

Treasury Bonds and Currencies: Yields and the Dollar Fall
U.S. Treasury yields fell amid growing expectations for a rate cut. The 10-year yield fell 5.9 basis points to 3.803%, while the 2-year yield, which is more sensitive to changes in interest rate expectations, fell 9.7 basis points to 3.9132%. Amid these changes, German bunds remained steady, yielding at 2.226%.

There was also significant volatility in currency markets. The US dollar weakened, while sterling strengthened, reaching a more than two-year high. The euro also showed gains, rising to $1.1189, its highest in a year.

Japanese yen strengthens despite inflation data
The Japanese yen also strengthened, as the dollar fell 1.36% to 144.27 and comments from Bank of Japan Governor Kazuo Ueda indicated that he was prepared to raise rates if economic conditions were as expected. However, data released in Japan earlier showed that core inflation accelerated for a third month in a row, but the slowdown in demand-driven price growth does not yet indicate the need for an immediate change in interest rate policy.

FX Play: Dollar Weaker Amid Rate Cut Expectations
The currency market is always based on relative expectations, and the prospect that the Federal Reserve will soon begin cutting rates along with other major global banks has led to a weakening of the dollar, said Uto Shinohara, managing director and chief investment strategist at Mesirow in Chicago. According to him, the market is already pricing in future changes in Fed policy, which reduces the attractiveness of the dollar against other currencies.

Oil Market: Sharp Price Jump After Decline
Oil prices have jumped sharply by more than 2%, recouping earlier losses associated with a rise in U.S. crude inventories and a decrease in China's oil demand forecasts. This recovery demonstrates the volatility of the oil market, where everything from inventory data to demand expectations can cause significant changes in prices.

Gold Is Back on the Rise: The Price of an Ounce Nears a Record
Gold continues to strengthen its position, showing a gain of about 1.1%, reaching a price of $2,510 per ounce. This value is close to the record high, which was set just a few days earlier on Tuesday at $2,513 per ounce. Investors continue to invest in gold, seeing it as a safe haven asset in the face of economic uncertainty.
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Market Tectonics: Boeing and PDD Holdings Pull Down, Oil Stocks Rally Ahead

Tech Giants Slip as Market Awaits Nvidia's Quarterly Report
The S&P 500 ended lower on Monday, despite investors' growing expectations for Nvidia's upcoming quarterly report. The AI chipmaker saw its shares fall amid uncertainty surrounding its report, which is due out this week.

Meanwhile, investors are keeping a close eye on upcoming inflation data for clues about potential changes in the Federal Reserve's interest rate policy.

Nasdaq Slips, Dow Jones Surges
The tech-heavy Nasdaq also slipped, while the Dow Jones Industrial Average managed to stay afloat, helped by giants like Caterpillar and American Express. Despite the overall decline, the Dow ended the day with a small but positive gain, helped by a nearly 1% gain in those stocks.

Nvidia Expectations Are Peak
Nvidia, the leader in AI chips, is set to report its quarterly results on Wednesday. Investors are pinning their hopes on the company's results, which have risen an impressive 160% year-to-date, accounting for a significant portion of the S&P 500's 18% gain.

"Risky Investing in Focus"
"Nvidia is in the spotlight this week as a barometer for 2024 risk investing," analyst McMillan said. He stressed that Nvidia's success or failure could have a major impact on the market, given the company's importance in the AI sector.

Cautious Expectations
Still, there is growing anxiety among investors. Some fear that if Nvidia's guidance falls short of lofty expectations, it could derail the current rally in AI stocks like Microsoft and Alphabet.

"There is a concern that Nvidia could disappoint," warns Jake Dollarhide, CEO of Longbow Asset Management. "When the market finds confidence without considering the possibility of negative news, that's when the news comes."

Market Under Pressure: PDD Holdings and Tesla Slip
Shares in PDD Holdings, the U.S. unit of the Chinese company behind the popular Temu platform, have plunged nearly 29% after the company failed to meet investor expectations for its second-quarter earnings. The significant drop has raised concerns in an already tense market.

Tesla hit by new tariffs
Tesla also found itself in the spotlight, losing 3.2% of its market value. The reason was the unexpected move by Canadian authorities, who, following the example of the United States and the European Union, announced the introduction of a 100% tariff on the import of Chinese electric cars. This move could seriously affect Tesla's sales in the region and threaten its market position.

Stock indices: S&P 500 and Nasdaq in the red, Dow Jones afloat
The major stock indices ended the day in different directions. The S&P 500 index fell by 0.32%, stopping at 5,616.84 points. The tech-heavy Nasdaq suffered more, losing 0.85% and ending the session at 17,725.77 points. Meanwhile, the Dow Jones Industrial Average managed to stay in positive territory, adding 0.16% to close at 41,240.52.

Tech Down, Energy Up
Of the 11 sectors in the S&P 500, six ended the day lower. The information technology sector was the most pressured, falling 1.12%. Consumer discretionary was also under pressure, losing 0.81%. However, amid geopolitical tensions in the Middle East and related oil supply disruptions, the energy sector showed the opposite dynamics, jumping 1.11%.

Boeing Slips Amid NASA News
Boeing shares fell 0.85% after it became known that NASA has chosen SpaceX as the primary partner to return astronauts to Earth next year, choosing its vehicle over Boeing's Starliner.

Positive Signals from the Fed: Wall Street on the Rise
Stock markets rose on Friday, with the S&P 500 approaching its all-time highs. This happened amid statements by Federal Reserve Chairman Jerome Powell that it was time to lower borrowing costs. Powell emphasized that the reduced risk of inflation and stabilization of labor demand created the conditions for such a decision, which was a positive signal for investors.

Bets on a decrease: The market awaits the Fed decision
There is some expectation in the money market, with traders estimating the probability of a 25 basis point cut in September at 70%, and a 50 basis point cut at 30%. These forecasts are based on data from the FedWatch tool from CME Group, which closely tracks investor sentiment.

Inflation Indicators in Focus
Friday's July personal consumption spending data, a key measure of inflation for the Federal Reserve, could be a key factor in its policy outlook. The data could provide insight into the trajectory of the Fed's monetary easing, which could in turn impact market sentiment.

Corporate Earnings: Dell, Salesforce, and Other Giants
Investors will be focused on earnings this week from companies like Dell, Salesforce, Dollar General, and Gap. These reports could provide insight into the health of the corporate sector and provide additional guidance to the market.

Stock Market Balance
On the stock market front, the S&P 500 showed a modest 1.1-to-1 advantage over declining stocks. Overall, declining stocks outnumbered advancing stocks in the U.S. by 1.2-to-1, suggesting some volatility among market participants.

Volumes remain low
Trading activity on US exchanges was below average, with volumes of 9.5 billion shares compared to the average of 11.9 billion shares over the past 20 sessions. This may indicate that investors are taking a wait-and-see approach amid uncertainty about the Fed's future moves.

Global markets on hold
World stock markets also reacted to expectations of an imminent cut in US interest rates. Despite rising oil prices, caused by tensions in the Middle East, markets closed in the red. European stocks ended the day slightly lower, while London, closed for a public holiday, showed sluggish results. Japan's Nikkei also slid amid a stronger yen, ending trading down almost 0.7%.

Indices closed mixed: Dow Jones rises, Nasdaq falls
US stock indices ended the trading session with mixed results on Monday. The Dow Jones Industrial Average rose 0.16% to 41,240.52. Meanwhile, the S&P 500 lost 0.32% to end at 5,616.84 and the Nasdaq Composite fell 0.85% to end the day at 17,725.77. The MSCI World Index also fell 0.20% to end at 829.64.

Market Digests News: Reaction to Powell's Comments
Stock markets continue to react to a flurry of news, including recent comments from Federal Reserve Chairman Jerome Powell. "We saw a rally on Friday driven by Powell's comments and some strong durable goods orders data," said Ben MacMillan, principal and chief investment officer at IDX Insights in Florida. However, he added that historically, rate cuts often foreshadow weakness in the stock market because the cuts come for a reason.

Oil Futures Rise Amid Market Jitters
Brent crude futures ended the day up 3.05% to $81.43 a barrel. U.S. crude also posted significant gains, rising 3.5% to $77.42 a barrel. This reflects market volatility and investor anxiety amid global economic uncertainty.

Durable Goods Orders Beat Expectations
New data from the U.S. Commerce Department showed a sharp rise in orders for durable goods such as toasters and airplanes. These orders increased 9.9% in July, a significant rebound from a decline in June and beating analysts' forecasts. The surge signals a rebound in demand for U.S. manufactured goods.

Powell signals possible easing
Jerome Powell stressed at a symposium in Jackson Hole on Friday that the Fed is ready to ease monetary policy, noting the need to prevent further weakness in the labor market. His remarks drew interest from investors expecting lower interest rates to support the economy, but also hinted at possible challenges ahead.

European Central Bank remains cautious: Progress in tackling inflation, but risks remain
European Central Bank chief economist Philip Lane gave a cautiously optimistic assessment of the current situation at a symposium in Jackson Hole. According to him, the ECB has made significant progress in reducing eurozone inflation to its target of 2%, but stressed that it is too early to guarantee a final victory. The comment reflects the central bank's caution about the next steps in monetary policy.

Bond yields rise as market braces for rate hike
On the back of Lane's comments, the yield on the benchmark 10-year Treasury note rose 1.3 basis points to 3.82%. Two-year notes, which are more sensitive to interest rate changes, also rose 2.7 basis points to 3.94%. This suggests that markets are beginning to price in potential policy changes.

Market Expectations: Rates Under Closer Attention
Fed funds futures are fully pricing in a quarter-point rate hike at the Fed's upcoming Sept. 18 meeting, and are also offering a 39.5% chance of a more dramatic 50 basis point move. Investors are looking for 103 basis points of easing by the end of the year and another 122 basis points in 2025.

ECB Continues Rate Cuts
The European Central Bank has already started its easing cycle, cutting rates by 25 basis points in July. Two more such cuts are expected this year. Ben McMillan of IDX Insights expects the ECB to cut rates by 75 basis points this year, but he believes the market may adjust its expectations towards a less aggressive rate cut.

Key Economic Data on the Horizon
Key data on personal consumption and core inflation in the US are due on Friday, along with preliminary inflation data from the EU. These reports could be crucial for determining the direction of monetary policy in September, and most analysts expect them to support the idea of rate cuts.

Japanese Yen Strengthens Against Dollar
In the forex market, the Japanese yen strengthened to a three-week high against the US dollar, reaching 143.45 yen per dollar. However, the dollar then partially recovered its positions, increasing by 0.14% to 144.56 yen. This increase in the yen indicates increased investor interest in safe assets amid global economic uncertainty.

Dollar gains strength: index strengthens amid euro weakness
The dollar index, which tracks the exchange rate of the American currency against six major currencies, including the euro and the yen, showed a rise of 0.24%, reaching 100.84. At the same time, the euro weakened by 0.28%, falling to $1.1159. This movement reflects the strengthening of the dollar amid global economic uncertainty and demand for safer assets.

Gold continues to rise: investors seek safe havens
Gold prices continue to show steady growth, approaching their historical highs. Spot gold rose 0.31% to $2,518.27 an ounce amid increased demand for safe-haven assets. U.S. gold futures also showed positive dynamics, rising 0.28% to $2,515.50 an ounce. The gains highlight investors' desire to protect their capital amid instability in financial markets.
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Nvidia rally saves Wall Street, Asia shares fall on weak PDD Holdings, Nongfu Spring earnings

Wall Street Rises: Records Ahead of Nvidia Earnings
The S&P 500 ended slightly higher on Tuesday, while the Dow Jones closed at a record high. Investors are eagerly awaiting Nvidia's quarterly earnings report on Wednesday, which could shed light on where the market is headed. Additionally, economic data due later this week could provide further clues about a possible interest rate cut.

Tech Bigs in Focus
The tech sector has been mixed, especially ahead of earnings from Nvidia (NVDA.O), the semiconductor giant that has been at the center of Wall Street's recent rally in artificial intelligence stocks. Nvidia shares rose 1.5% to become the most traded stock on U.S. markets, according to LSEG.

Nvidia shares have risen an astonishing 159% since the start of 2024, making the company the leader in the AI tech race. With competition and costs rising among giants like Microsoft (MSFT.O) and Alphabet (GOOGL.O), investors are watching Nvidia closely for more data on the state of the industry.

Expectations are high: Nvidia in focus
"Nvidia has an extremely high bar to meet, not just in terms of its financials but also in terms of its vision for the future of AI. This could have a significant impact on the entire tech sector, which has recently seen a downturn," said Ross Mayfield, an investment strategist at Baird.

Apple and Amazon: Opposite Directions
Apple (AAPL.O) shares ended the session up slightly 0.4%, while Amazon (AMZN.O) shares fell 1.4%.

The S&P 500 Index rose 0.16% to close at 5,625.80, underscoring investors' cautious optimism ahead of major market events.

Nasdaq and Dow Jones: Steady Gains Amid Expectations
On Tuesday, the Nasdaq Index rose 0.16% to 17,754.82, while the Dow Jones Industrial Average edged up 0.02% to end the day at a record high of 41,250.50. This was the second straight day that the Dow Jones has set a new high, underscoring the market's resilience.

Tech and Finance: The Gainers
Of the S&P 500's eleven major sectors, six ended the day with positive dynamics. The leader was the information technology sector (.SPLRCT), which added 0.63%. In second place was the financial sector (.SPSY), which rose 0.48%. The results suggest that investors continue to bet on leading industries despite economic uncertainty.

Consumer Confidence and the Labor Market: Contrasting Signals
Data released on Tuesday showed that U.S. consumer confidence hit a six-month high in August. However, despite the optimism, consumers showed concerns about the labor market, especially after the country's unemployment rate rose to a nearly three-year high of 4.3% last month.

Awaiting Key Economic Data
Investors now turn their attention to Friday's release of personal consumption spending data for July, which could provide further clues about the possible pace of interest rate cuts. Ahead of that event, traders are actively speculating on the likelihood of the Federal Reserve cutting rates by 25 or 50 basis points in September, based on data from the CME Group's Fed Watch tool.

Economic Outlook: Recession Risks Rising
Meanwhile, UBS Global Wealth Management raised its chances of a U.S. recession to 25% from 20%, citing a weakening labor market. The move reflects growing concerns about a possible economic slowdown despite continued gains in stock markets.

Paramount Global: Slump as Deal Drops
Paramount Global (PARA.O) shares plunged more than 7% after Edgar Bronfman Jr. decided to drop his bid for the company. The move cleared the way for Skydance Media to take control of Shari Redstone's media empire, sending the stock sharply lower amid uncertainty about the future.

Tesla: Slump as Trade Barriers Rise
Tesla (TSLA.O) shares fell 1.9% after the Canadian government announced a 100% tariff on imported electric vehicles made in China. The measure will affect all electric cars coming from China, including those made by Tesla, raising investor concerns about a potential decline in demand in the region.

Super Micro Computer under pressure: Hindenburg Research steps in
Super Micro Computer (SMCI.O) shares fell 2.6% after Hindenburg Research said it had taken a short position in the AI-focused server maker. The announcement added to the tension around the company, sending its stock sharply lower, underscoring the influence of big players on market volatility.

Housing: High mortgage rates under pressure
The PHLX Housing Index (.HGX) fell 1.2% amid data showing single-family home prices fell in June. Rising mortgage rates continue to weigh on housing demand, raising concerns about the future of the sector.

Market balance: Declines dominate
Amid mixed economic data, decliners outnumbered advancers in the S&P 500 (.AD.SPX) by 1.1 to 1. However, the S&P 500 posted 50 new highs and just one new low, while the Nasdaq posted 62 new highs and 57 new lows, indicating continued uncertainty among investors.

Trading Volumes: Market Activity Declines
Trading volumes on U.S. exchanges were below average, with 8.6 billion shares traded, well below the 11.9 billion average over the past 20 sessions. This decline in activity may indicate that investors are waiting for more concrete cues to inform their decisions.

Global Markets: Nvidia Results Awaited
Global stock markets were poised for new records on Wednesday, but further developments depended on the upcoming results from semiconductor investor favorite Nvidia. Meanwhile, the British pound hovered near a 2.5-year high amid expectations that the U.K. could lag the U.S. in cutting interest rates.

Asia Pacific: Mixed Results
MSCI's broadest index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) fell 0.2%. Meanwhile, Japan's Nikkei (.N225) was unchanged, indicating that investors in the region are cautious amid global economic challenges.

Oil: Uncertainty on Chinese demand
After the recent surge in tensions in the Middle East, oil prices have come under renewed pressure. The main factor was growing concerns about weak demand from China, which has caused a pullback in prices. Brent crude futures are trading just below $80 a barrel, reflecting uncertainty in global markets.

Nvidia: A Game-Changing Giant
Nvidia's (NVDA.O) market value continues to soar, driven by its leading role in developing artificial intelligence hardware. Since 2019, the company's shares have risen a whopping 3,000%, and its market cap has reached $3.2 trillion. This makes Nvidia a key player whose moves affect the entire market.

Nvidia's Market Impact: Forecasts and Expectations
According to Capital.com analyst Kyle Rodda, Nvidia's results not only determine the future of the company itself, but also set the tone for the entire tech sector. "Nvidia's revenue outlook serves as an indicator of the level of investment in AI, as well as the prospects of other large tech companies," Rodda said.

Global Markets: Moderate Growth and Caution
The S&P 500 (.SPX) showed a slight increase of 0.2% in the latest session, but Asian futures remained stable. Nasdaq 100 futures fell 0.1%, while FTSE futures rose 0.2%, reflecting mixed sentiment in markets.

Hong Kong: Consumer stocks fall
In Hong Kong, the Hang Seng (.HIS) index fell 1.1%, led by declines in consumer stocks. Particularly hard hit was water maker Nongfu Spring (9633.HK), whose shares fell 12% after weak financial results. This came amid a negative outlook from discount online retailer PDD Holdings, adding to the negative sentiment.

Tabcorp: Biggest drop in 15 years
Shares in Australian gambling company Tabcorp suffered a sharp decline, falling 17% to their lowest in four years. This was the biggest decline since 2008. The collapse was triggered by the company's warning that rising compliance and other costs would mean it would miss its profit targets.

Asian Markets: Stability Amid Currency Swings
In Asia, debt and currency markets were broadly stable. However, the Australian dollar briefly jumped to its highest since January at $0.6813. The gain was fueled by slightly better-than-expected inflation data, which sparked short-term optimism among investors.

Global Currencies: Dollar Slips
In global markets, the dollar's weakness, fueled by expectations of a US rate cut, helped other currencies gain. With short-term US interest rates above 5.25%, investors were starting to speculate that this is where the biggest declines will occur. In Asia, the dollar steadied at 144.42 yen and also strengthened 0.3% to $1.1145 per euro.

Interest Rate Outlook: Is a Cut Imminent?
Interest rate futures are now pricing in the possibility of a 100 basis point rate cut in the US this year. Last week, Federal Reserve Chairman Jerome Powell reiterated the possibility of a cut soon, saying "the time is now." The statement supported investor expectations for looser monetary policy in the near future.

BoE: Cautious Approach, Strengthening Pound
Unlike the US, the Bank of England has remained cautious in its actions, making sterling the best-performing currency in the G10 so far this year, up 4.1%. Sterling hit its highest in more than two years on Tuesday, hitting $1.3269, before retreating to $1.3227 in Asian trading.

UK Inflation: A Persistent Threat
Rabobank senior strategist Jane Foley said in a note that UK services inflation remains "uncomfortably high," adding pressure on the Bank of England and keeping the pound high. This confirms the need for further measures to combat inflation risks in the country.

BoE rates: Caution above all
Experts believe that the Bank of England is likely to cut interest rates no more than once a quarter. This view contrasts with the outlook of the US Federal Reserve, which is expected to make four successive 25 basis point rate cuts from September to January. This approach reflects the Bank of England's caution in the face of economic uncertainty.

Bond markets: Narrow gap
The rates market was stable, with the 10-year US Treasury yield at 3.83% and the two-year yield at 3.87%. Notably, the gap between the two was the narrowest in three weeks, indicating a convergence of long-term and short-term yield prospects. This could signal a stabilization in investor expectations for future interest rate movements.

Bitcoin and Gold: Mixed Movements
Cryptocurrency markets came under severe pressure as heavy selling in New York sent Bitcoin down 4% to $59,450. Meanwhile, gold held its ground at $2,517 an ounce, showing resilience amid market volatility. The mixed movements highlight growing instability in the financial sector and investors' differing perceptions of safe haven assets.
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[KostiaForexMart]

Blackwell Delay, Stock Drop: What's Happening at Nvidia?

Nvidia: Investor Expectations Were Not Met

Nvidia's (NVDA.O) quarterly guidance on Wednesday disappointed investors who had been counting on a continued run for the company, a symbol of success in generative AI. While Nvidia delivered impressive results, it was not enough to meet lofty market expectations.

The company's shares fell 6% in after-hours trading, dragging down other chipmakers. The report was a moment of truth for the tech sector, where even Nvidia's strong results have drawn mixed reviews. Despite impressive financials, including strong growth and profits, investors were left scratching their heads.

Strategy in Question

Carson Group chief market strategist Ryan Detrick noted that the problem was the scale of expectations. "The bit size this time was much smaller than we've seen in the past," he explained. Even the company's updated guidance failed to excite investors in the same way it had in previous quarters, he said. "Nvidia remains a standout with 122% revenue growth, but it appears the bar was set too high this earnings season," he added.

Guidance Underperforms

While Nvidia's revenue and gross profit guidance for the current quarter were close to analyst expectations, they failed to continue the trend of recent quarters in which the company has consistently beaten Wall Street estimates. This eclipsed even the impressive figures for revenue and adjusted profit in the second quarter, as well as the announcement of a $50 billion share buyback.

Nvidia has shown more than 200% revenue growth over the past three quarters, but each success puts more pressure on the company. As Wall Street continues to raise its targets, Nvidia now faces a challenge that is becoming increasingly difficult to overcome.

Nvidia is betting on Blackwell

Nvidia announced that it has begun shipping test samples of its new chips, codenamed Blackwell, to partners and customers. These chips have been finalized and are ready for market. The company expects their sales to bring in several billion dollars in the fourth quarter, which should support the current financial results.

However, even such ambitious plans could not save the market from a wave of sell-offs. Shares of chipmakers such as Advanced Micro Devices (AMD.O) and Broadcom (AVGO.O) fell almost 4%. Asian giants SK Hynix and Samsung also felt the impact, falling 4.5% and 2.8%, respectively, in Thursday morning trading.

Market on Edge: What Nvidia's Decline Means

Nvidia's fate largely determines the dynamics of the entire tech sector. The company's shares have soared more than 150% since the start of the year, adding $1.82 trillion to its market value and pushing the S&P 500 to new all-time highs. However, if the stock continues to slide after the close of trading on Wednesday, the company could wipe out as much as $175 billion in market value.

The outlook has raised concerns among investors about potential ROI issues in generative AI, with some beginning to question whether tech giants can continue to invest so heavily in the data centers needed to support AI without risking their bottom lines. These concerns have already begun to reverberate through the market, dampening the recent AI-related gains in stocks.

AI Giants: What's Next for Them?

Nvidia's biggest customers, such as Microsoft, Alphabet, Amazon, and Meta Platforms (a banned organization in Russia), are expected to spend more than $200 billion on capital expenditures in 2024. Much of that money is being spent on building AI infrastructure.

But even those investment plans haven't kept the tech giants' stocks from falling. They were down less than 1% in over-the-counter trading on Wednesday, reflecting growing tensions in the market. Whether Nvidia and other tech leaders can live up to investors' lofty expectations remains an open question.

Investors are starting to worry about the future of AI

The once-unshakable generative AI market is starting to raise more and more questions among investors. "The entire market is now kind of tied to Nvidia's success, and that's becoming increasingly worrisome," eMarketer analyst Jacob Borne said. It seems like any swing in Nvidia's performance could have a significant impact on the overall perception of the AI sector.

Regulators are ramping up the pressure

Nvidia is also facing increasing pressure from regulators. In its latest quarterly report, the company reported requests for information from regulators in the US and South Korea. The requests cover various aspects of Nvidia's business, including GPU sales, supply chain allocation, base models, and partnerships and investments in AI companies.

Previously, the company had only mentioned similar requests from regulators in the EU, UK, and China. In this context, it is particularly noteworthy that the French antitrust authority is preparing to charge Nvidia with alleged anti-competitive practices. US media have also reported that Nvidia is being investigated by US regulators for possible attempts by the company to tie its networking equipment to popular AI chips.

Profit outlook: high, but under pressure

Despite the challenges, Nvidia continues to deliver strong financial results. In the third quarter, the company expects adjusted gross margins of 75%, with possible deviations of 50 basis points. For comparison, analysts predict a slightly higher figure of 75.5%, which, however, is not much different from the second quarter, where Nvidia posted a profit of 75.7%.

Even taking these figures into account, Nvidia's gross margins remain significantly higher than those of its competitors. In particular, AMD showed an adjusted profit of 53% in the second quarter. The gap is due to the high prices of Nvidia's chips, which continue to lead in speed and performance. However, the question remains whether the company's strong performance can be sustained amid mounting regulatory pressure and growing investor anxiety.

Nvidia's Outlook: Falls short of lofty expectations

Nvidia is forecasting revenue of $32.5 billion for the third quarter, with a 2% margin of error, slightly above the average analyst estimate of $31.77 billion, according to LSEG. The company posted revenue of $30.04 billion in the second quarter, significantly beating expectations of $28.70 billion. Adjusted earnings per share were 68 cents, also above the 64 cents expected.

Impressive Growth in the Data Center Segment

One of the keys to Nvidia's success is its rapid growth in data center sales. In the second quarter, this segment brought in $26.3 billion for the company, up 154% year-over-year and well above the $25.15 billion forecast. Compared to the first quarter, revenue in this segment increased by 16%.

In addition, Nvidia continues to generate significant revenue from the sale of chips to gaming and automotive companies, which also supports the company's overall financial results.

The market reacts to forecasts

Despite such significant gains, shares of some other companies, such as Broadcom and Advanced Micro Devices, fell by about 2%, while Microsoft and Amazon fell by almost 1%. This is due to the general tension in the market caused by Nvidia's forecasts, which turned out to be less ambitious than investors expected.

If the downward trend in Nvidia shares that began on Wednesday continues on Thursday, it could be a serious blow to the company, although not as severe as the 11% drop recorded earlier this year.

Demand for AI Chips: High Expectations and Harsh Reality

Relentless demand for AI chips has allowed Nvidia to beat analyst estimates multiple times in previous quarters, driving investor expectations to new heights. However, today's more subdued forecasts have eclipsed even the company's impressive second-quarter revenue growth and strong adjusted profit, not to mention its massive $50 billion share buyback.

The question remains: Can Nvidia continue to meet rising market expectations, or will its financials face greater challenges in the future?

Over-Expectations: Nvidia Fails to Meet Market

Despite its impressive financial performance, Nvidia is facing a situation where even good results fail to meet investors' wildly high expectations. "They beat expectations, but when expectations are that high, it's hard to meet market expectations," says JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. His words reflect the sentiment of many market participants who expected Nvidia to deliver on its promise.

Fall Volatility: Market Ahead of Unstable Season

A weak reaction to Nvidia's earnings report could set the tone for market sentiment heading into what has historically been a volatile fall. According to CFRA, the S&P 500 has fallen an average of 0.8% in September since World War II, making it its worst month of the year. The stats are adding to investor anxiety, especially in the context of the current market volatility.

Investors will also be focused on next week's U.S. employment report, which could shed light on whether the weakness in the labor market that rocked stock markets in early August has been overcome.

AI Rally: Is Confidence Losing?

The optimism surrounding AI technology has been fueled in large part by Nvidia's incredible run, which has helped fuel Wall Street's strength over the past year. However, confidence in the rally has begun to fade in recent weeks as earnings results have disappointed many investors.

Tech giants like Microsoft and Alphabet have been particularly hard hit, failing to meet high expectations. Investors have also expressed concern about the companies' significant spending on new AI technologies. This spending, aimed at maintaining their leadership in AI, has raised concerns about its impact on future profitability. Microsoft and Alphabet shares have remained under pressure since their earnings reports last month, reflecting growing skepticism in the market.

The market is heading into a potentially challenging period, where inflated expectations and historical volatility could weigh heavily on investors. Questions remain about whether tech leaders can continue to deliver on expectations, creating uncertainty heading into the fall.

Nvidia Outlook: Steady Growth Amid High Expectations

Nvidia provided guidance for its fiscal third quarter, expecting revenue of $32.5 billion, with a potential for variation of 2%. That number is well above the average analyst estimate of $31.8 billion, according to LSEG, and represents an impressive 80% growth compared to the same quarter last year.

Gross Margin: Ambitious Targets

The Santa Clara, California-based company is also targeting adjusted gross margin of 75%, with a potential for variation of 50 basis points. That's slightly below the average analyst estimate of 75.5%, reflecting the market's high expectations for the leading chipmaker.

Market reaction: Pre-earnings correction

Nvidia shares were down 2.1% on Wednesday ahead of its quarterly earnings report. However, despite this temporary dip, the company remains one of the leaders of the AI rally, with shares up 150% since the start of 2024. This phenomenon makes Nvidia one of the main beneficiaries of the current AI-driven boom on Wall Street.

Stock valuation: A comparative analysis

Interestingly, despite its impressive growth, Nvidia shares trade at a price-to-earnings multiple of 36 times earnings, below the average of 41 times over the past five years. Meanwhile, the S&P 500, which is often used to gauge major market trends, is trading at 21 times expected earnings, above the five-year average of 18 times. Nvidia's guidance continues to surprise and excite investors, but it also highlights the mounting pressure and high expectations for the company. Nvidia faces some tough quarters ahead, and the entire market will be watching to see if the company can meet and exceed the expectations it has set for itself.
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[KostiaForexMart]

USD/JPY: Analysis and Forecast

During the Asian session today, following the release of the CPI (Consumer Price Index) data from Tokyo, the Japanese yen attempted to regain its recent gains against the U.S. dollar. The rise in inflation in Tokyo strengthens the Bank of Japan's aggressive monetary policy stance, which supports the yen and pressures the USD/JPY pair downward. However, during the European session, the dollar began to reclaim its strength.

The downward potential for the USD/JPY pair is limited as the U.S. dollar, following yesterday's stronger-than-expected economic data, is trying to maintain its recent gains. However, dovish comments from the Federal Reserve could restrain the further growth of the U.S. dollar.

Today, traders should focus on the U.S. PCE (Personal Consumption Expenditures) index for insights into the future direction of U.S. interest rates and potential trading opportunities.

From a technical standpoint, the pair is above the downward trendline, indicating a weakening of the bearish bias. However, the RSI (14-day Relative Strength Index) remains above 30, confirming the bearish trend.

Additionally, the USD/JPY pair may test the downward trendline at the 144.50 level.

A break below this level could see the pair move toward the seven-month low recorded on August 5, with further support at 140.25.

Regarding resistance, if the pair consolidates above the 145.00 level, it could open the path to 146.00, and a move into the 146.500 supply zone could increase the likelihood of a bullish trend.
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[KostiaForexMart]

Hot forecast for EUR/USD on September 9, 2024

It seems almost unbelievable, but the United States Department of Labor reported a decrease in the unemployment rate from 4.3% to 4.2%. This is even though employment growth over recent months should have led to an increase in unemployment, which had been occurring consistently for several months. Considering the population size, growth rate, and age demographics, employment in the United States should increase by just over 200,000 jobs per month to maintain a stable unemployment rate. However, it increased by only 1,717,000 jobs over the last twelve months, or approximately 143,000 jobs monthly. The United States Department of Labor also publishes data on the number of new jobs created outside of agriculture. This figure indicates the maximum potential for employment growth. According to the latest data, 142,000 jobs were created. Over the same previous twelve months, 2,358,000 jobs were created, or about 196,000 per month, which is also not enough. Thus, even if we assume that the employment data is not entirely accurate, there still aren't enough new jobs to stabilize the labor market.

Moreover, only 673,000 new jobs were created in the last five months, or about 135,000 monthly. With such figures, unemployment should only rise, as observed in previous months. But now, inexplicably, it has decreased.

Nonetheless, despite apparent inconsistencies and troubling questions, the dollar somewhat strengthened its positions. Considering the ongoing election campaign and the fact that the majority of American media clearly support the Democrats, one should not expect further development of this issue. On the contrary, leading media outlets will point to the decrease in the unemployment rate without any questions or the like, citing it as an argument in favor of Kamala Harris. Thus, the oddities with the labor market data will quickly be forgotten, at least in the media space, thereby creating a basis for strengthening the dollar.

The EUR/USD pair showed significant volatility towards the end of last week. The lever for speculators has been the information and news flow, particularly the U.S. Department of Labor's report. As a result, the quote initially jumped above the 1.1150 mark, then plummeted below 1.1100.

In the 4-hour chart, the RSI technical indicator has lost strength due to high volatility. However, it is worth noting that towards the close of trading, the indicator stabilized below the average level of 50, indicating an increase in the volume of short positions on the euro.

Regarding the Alligator indicator in the same time frame, the moving average lines are intertwined with each other. In this case, the indicator is in confusion.

Expectations and Prospects
Based on the inertial-speculative cycle, the movement towards the upper area of the psychological level of 1.1000/1.1050 is not ruled out. This price area serves as a support for sellers in the market. However, the speculation factor, which will continue this week, should be noted. Thus, price movements can quickly change directions.

The complex indicator analysis points to a downward cycle in the short-term and intraday periods. Indicators point to an upward trend in the medium term.
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[KostiaForexMart]

Apple Slows Down, Boeing Takes Off: How Are Trends Changing?

Wall Street Gains After Selloff
The key U.S. stock indexes posted solid gains of more than 1% on Monday as market participants looked for bargains after last week's big selloff. Investors' expectations were also focused on upcoming inflation data and Federal Reserve decisions to be announced in the coming days.

Last Week's Slide and Why It Mattered
It was a tough week for investors, with Friday's reports showing weaker-than-expected employment data for August. This followed disappointing manufacturing data released on Tuesday, which sent the Nasdaq Composite (.IXIC) to its biggest weekly loss since January 2022, while the S&P 500 (.SPX) posted its biggest decline since March 2023.

Awaiting key data and decisions
Amid uncertainty and new economic data, market participants continue to brace for potential volatility from the release of fresh inflation data and the Federal Reserve's monetary policy decision, which could significantly impact the future direction of markets.

Investors bet on recovery: Wall Street in positive territory
Wall Street indices confidently moved higher on Monday, with the Dow Jones Industrial Average (.DJI) adding 484.18 points, or 1.20%, to 40,829.59. The S&P 500 (.SPX) rose 62.63 points, or 1.16%, to end at 5,471.05, while the Nasdaq Composite (.IXIC) gained 193.77 points, or 1.16%, to end at 16,884.60.

Awaiting Economic and Political News
Investors are focused this week on the Consumer Price Index (CPI) release, which is expected Wednesday morning, the day after the first presidential debate between Democrat Kamala Harris and Republican Donald Trump. The debate and economic data could set the tone for the market ahead of the November 5 election.

'High-Quality Stocks' Are Back in Focus
Phil Blancato, chief market strategist at Osaic Wealth in New York, says investors are actively looking at "high-quality stocks that are now available at attractive prices." Among such holdings, Blancato singled out Nvidia (NVDA.O), a leader in the market for artificial intelligence chips. The company's shares rose 3.5% on Monday after a sharp 15.3% drop the previous week.

Experts Caution
Despite the current gains, Blancato is concerned about the rally continuing ahead of a key inflation report. Wednesday's CPI data could play a key role in the Federal Reserve's decision on interest rates. Investors are hoping for a "soft" reading that could confirm further rate cuts by the Fed — by 25 or 50 basis points.

"But what if it doesn't?" — Blancato warns, noting that any unexpected Fed move could trigger serious market volatility.

Fed Fears: A Dilemma on the Horizon
Investors are bracing for either scenario: Some will be disappointed if the Fed decides to cut rates by just 25 basis points, while others will be worried if the cut is more significant — up to 50 basis points. This could indicate serious concerns on the part of the regulator about the state of the economy. "It turns out that either way, it's not a win-win situation," one market strategist noted.

Inflation Data: Expectations and Forecasts
Wednesday's inflation report is expected to show a slowdown in headline price growth in August to 2.6% year-on-year, with the monthly figure likely to remain unchanged at 0.2%. The consumer price inflation (CPI) data will be followed by the producer price report on Thursday, which will also be closely analyzed by the market.

Apple underwhelms: a poor start with the new iPhone
Shares of Apple Inc (AAPL.O) were little changed on Monday, closing with a minimal gain of 0.04%, despite an earlier loss of almost 2%. Investors showed little enthusiasm for the launch of the new iPhone 16 with artificial intelligence features, which the company presented earlier in the week.

S&P 500 Sectors in the Green: Consumer Staples, Industrials Lead the Way
All 11 major sectors of the S&P 500 ended the day in the green. Consumer staples led the gains, up 1.63%, followed by industrials, which added 1.56%. Communications companies were the weakest performers, up just 0.04%.

Tech Competition: Apple vs. Huawei
Apple's unveiling of its new phone came hours after Chinese tech giant Huawei (HWT.UL) began accepting pre-orders for its triple-phone Mate XT, adding intrigue to an already intense standoff between the two tech giants.

Boeing's Gain: Avoiding a Strike

Boeing (BA.N) shares jumped 3.4% after the company and its largest union reached a tentative agreement covering more than 32,000 workers. This helped prevent an impending strike, which had a positive impact on investor sentiment.

Palantir and Dell Technologies: Gains on S&P 500 Upgrades
Palantir (PLTR.N) jumped 14% and Dell Technologies (DELL.N) gained 3.8% after it was announced that they would be added to the S&P 500 index on Sept. 23. The move prompted investor buying and strengthened the companies' positions in the market.

American Airlines and Etsy Lose Index Spots
As a result of the S&P 500 changes, American Airlines Group (AAL.O), which rose 3.9%, and Etsy (ETSY.O), which fell 1.6%, will be removed from the index. Bio-Rad Laboratories (BIO.N), which ended the day down 2%, will also be removed.

Trading Volumes: Activity on U.S. Exchanges
A total of 10.75 billion shares changed hands on U.S. exchanges, slightly above the 20-day moving average of 10.72 billion shares. Advancing stocks outnumbered declining stocks on the New York Stock Exchange (NYSE) by a 2.16-to-1 ratio, with 258 new highs and 111 new lows. On the Nasdaq, 2,548 stocks advanced and 1,616 declined, for a 1.58-to-1 ratio in favor of gainers.

New Highs and Lows: S&P 500 and Nasdaq on the Move
The S&P 500 posted 27 new 52-week highs and 4 new lows, while the Nasdaq Composite posted 45 new highs and 177 new lows. The data suggests continued buying interest despite market volatility.

Hewlett Packard: Falling as Offering Goes On
Hewlett Packard Enterprise (HPE.N) shares fell sharply by 6.4% in after-hours trading after the company announced it would offer $1.35 billion in mandatory convertible preferred shares to finance its acquisition of Juniper Networks (JNPR.N). The news has raised investor concerns and put pressure on the stock.

HPE Strengthens AI Market Position with Juniper Networks Deal
Earlier this year, Hewlett Packard Enterprise (HPE) announced it would acquire networking company Juniper Networks for $14 billion in cash. The acquisition is intended to strengthen HPE's AI offerings and expand its market share in infrastructure solutions.

Funds for the Transaction: Convertible Share Financing
HPE said the net proceeds from the mandatory convertible preferred stock offering will be used to cover all expenses associated with the acquisition of Juniper Networks. The offering allows investors to purchase preferred shares, which typically pay higher dividends than common shares, and also gives holders the right to convert their shares into common shares at a future date.

Automatic Share Conversion: Terms and Conditions
The preferred shares offered by HPE will automatically convert into common shares on or about September 1, 2027, unless they are redeemed or exchanged by then. This provision provides investors with the flexibility to choose between a stable dividend income and the potential for common share appreciation.

Major Banks Support the Deal
Leading investment banks, including Citigroup, J.P. Morgan and Mizuho, will coordinate the issuance of preferred shares and act as joint bookrunners. This support validates the value of the deal and the credibility of HPE's strategy.

Growing Demand for AI Servers Raises Revenue Outlook
Last week, HPE raised its full-year revenue guidance, citing increased demand for AI-focused servers. The growth is driven by companies' significant investments in AI infrastructure, creating additional opportunities for HPE in the coming years.
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[KostiaForexMart]

Oil storm and political intrigue: What's happening to US markets?

Markets react to presidential debate: stocks fall, dollar holds
US stock futures fell, the dollar held its ground and bond prices jumped after a tense US presidential debate in which Vice President Kamala Harris put Republican nominee Donald Trump on the defensive.

Fiery debate puts investors on edge
The presidential contenders focused on hot-button issues such as abortion, the economy, immigration and Trump's legal woes in the first debate. That has raised concerns among investors, especially ahead of upcoming U.S. inflation data that could shape Federal Reserve policy next week.

Bond yields fall on rate cut expectations
Bond yields, which move in the opposite direction to their prices, fell after Harris's strong speech, fueling expectations for interest rate cuts while investors also anticipate higher spending if Trump wins. Ten-year Treasury yields fell to 3.6068%, their lowest since June 2023. Meanwhile, 10-year German bond yields, the euro zone's benchmark, fell 2.5 basis points to 2.12%, a new one-month low.

Political battle intensifies after Biden exit
Harris's late entry into the presidential race following Joe Biden's resignation in July has intensified the political battle. Her confident debate only added to market jitters that have become more pronounced in anticipation of Trump's possible return to the White House.

Investors weigh the implications of a potential victory
S&P 500 futures fell 0.3% as the market speculates that a Harris presidency is unlikely to bring major spending or tax cuts.

Asian shares fall, Europe stays afloat
The MSCI index of Asia-Pacific shares excluding Japan fell 0.3%, reflecting broader trends in Asian markets.

European markets gain on US hurricane
European stock markets were more upbeat, with the pan-European STOXX 600 index up 0.4%. The gains were helped by gains in oil and gas stocks, driven by concerns that Hurricane Francine could impact US oil production.

Rates Tilt to Harris, But Fiscal Policy Remains Cloudy
The presidential debates provided little clarity on fiscal policy, but financial markets showed a bias in favor of Kamala Harris. Pop star Taylor Swift has thrown her weight behind her campaign, saying she will back Harris in the Nov. 5 election.

Dollar Weakens, Yen Strengthens
The U.S. dollar index, which tracks the dollar against six other major currencies, was down 0.256 percent at 101.38. Meanwhile, the Japanese yen rose more than 1 percent to 140.71 per dollar, its highest since late December. The gains came after Bank of Japan Governor Junko Nakagawa reiterated that the bank will continue to raise interest rates if the economy and inflation meet its forecasts.

US Crypto Assets Slip
US crypto and blockchain stocks fell in premarket trading after Bitcoin dropped 2%. This comes amid previous statements by Donald Trump, who positioned himself as a supporter of cryptocurrencies at the Bitcoin 2024 convention in Nashville in July.

Awaiting inflation data: investors focus on reports
Investors are closely watching the upcoming publication of the US Labor Department's Consumer Price Index (CPI), which is scheduled for Wednesday. The report is expected to provide further clues about the possible course of monetary policy, although the Federal Reserve has already emphasized that employment is taking precedence over inflation.

Inflation forecasts remain stable
According to the data from an analyst survey, the core consumer price index is expected to increase 0.2% in August from the previous month, in line with previous readings. This stability in the outlook leaves the question of the future of interest rates open, especially given that the latest employment report released on Friday did not provide a clear direction for the Fed's actions.

Fed rates in question: What to expect next week?
While most economists expect the Fed to cut interest rates next week, the size of the cut is still up for debate. After the mixed jobs report, it's clear the central bank needs more evidence of a slowdown or recession, particularly in the labor market.

"For the Fed to take more decisive action, we need more evidence of a slowdown in the economy, particularly in employment. I don't think the latest payrolls report provided that evidence," said ING's Carnell.

Market Price in Rate Cut Probability
Investors are currently pricing a 65% chance of the Fed cutting rates by 25 basis points, with a 35% chance of a more aggressive 50 basis point cut when the central bank makes its decision on September 18, according to the CME FedWatch tool.

Oil prices recover amid hurricane concerns
In commodity markets, oil prices began to recover from a significant drop in the previous session. Amid a decrease in US crude inventories and the threat of Hurricane Francine, which could disrupt production in the country, quotes rose by 2%. These factors partially offset concerns about a decrease in global demand.

Oil futures rise: Brent and WTI gain momentum
Brent crude rose by 2% to reach $70.64 per barrel, while US West Texas Intermediate (WTI) futures rose by 2.25% to reach $67.21 per barrel. These figures reflect a mixed reaction of markets to the current uncertainty around production and demand.

Cryptocurrency stocks under pressure: Growing chances of Harris alarm the market
Shares of US companies related to cryptocurrencies are falling in premarket trading on Wednesday. This comes after Democratic nominee Kamala Harris successfully attacked her opponent Donald Trump in a heated debate, putting him on the defensive.

Trump as a cryptocurrency supporter: the industry is waiting
Trump, who has previously positioned himself as a Bitcoin supporter, has promised to support the cryptocurrency sector. His possible return to the White House could mean favorable changes for the industry, which has been critical of the current administration for excessive regulatory measures. However, after the debate, the crypto market is showing warning signs: Bitcoin, the world's largest digital currency, fell 1.6% on Wednesday, while Ethereum lost 2%.

Analysts assess the impact of the debate on the crypto market
"Despite the fact that the debate was not directly about cryptocurrencies, market sentiment is changing in favor of Kamala Harris," comments Valentin Fournier, an analyst at BRN.

"This is a bit of a chilling outlook for Bitcoin, in contrast to the more optimistic forecasts Trump made at the Bitcoin 2024 conference," Fournier adds, pointing to a shift in sentiment that could impact the future of cryptocurrencies.

Harris's odds are rising: Markets are taking bets
Kamala Harris's odds of winning the election have increased from 53% to 56% after the presidential debate, while Donald Trump's chances of winning have fallen from 52% to 48%, according to online betting site PredictIt.

Trump and the Crypto Industry: Promises and Hopes
Back in July, Donald Trump was actively seeking support from the crypto industry, speaking at a conference with promises of more favorable regulations. During his speech, he urged: "Never sell your Bitcoin," hoping to attract votes and donations from the crypto community.

Markets Watch Bitcoin: A Preference Indicator
Ahead of the debate, many analysts and traders looked to Bitcoin as an indicator that could tell which candidate is leading the race. The cryptocurrency market, known for its high volatility, is often seen as a risky asset. It attracts the attention of the US Securities and Exchange Commission (SEC), which accuses market participants of violating securities laws.

Cryptocurrencies Are Growing in Popularity Despite Risks
Despite the risks and regulatory pressure, interest in cryptocurrencies continues to grow thanks to support from Wall Street and large corporations such as Elon Musk's Tesla, as well as the growing popularity of cryptocurrency exchange-traded funds.

Crypto Stocks Fall: React to Debate
Crypto stocks were under pressure ahead of the opening bell. Riot Platforms, Marathon Digital, and Hut 8 lost between 2.5% and 3.4%. Software developer and major Bitcoin buyer MicroStrategy fell 4%, while cryptocurrency exchange Coinbase Global fell 2.5% and blockchain farm operator Bitfarms fell 3%.

These crypto market swings highlight the uncertainty surrounding the outcome of the election and its possible impact on future regulation of the industry.

US Inflation Takes a Backseat as Political Battles Rumble
Amid the heated US presidential debate, upcoming inflation data has taken a backseat for now, but the lull could be temporary.

Last Stand Before Big Fed Decision
Wednesday's August consumer price report will be the last major economic data before the Federal Reserve's expected decision on September 18. With markets pricing in a roughly 35% chance of a sharp 50 basis point rate cut, and a 25 basis point cut already fully priced in, the upcoming data could significantly change traders' bets and positioning.

Economists See Inflation Stable
Economists surveyed expect both headline and core CPI to rise 0.2% month-on-month, with annual inflation falling to 2.6% in August from 2.9% in July. That outlook could impact the Fed's policy decisions.

Markets react to shifting balance of power
U.S. Treasury yields fell, while the dollar and Bitcoin, as well as U.S. stock futures, also fell. The market reaction is interpreted as a sign that the debate has given Harris a slight advantage ahead of the November 5 presidential election.

The yield on the 10-year U.S. Treasury note fell to 3.605%, the lowest since June 2023, while the dollar was at 141.68 yen.

Trump's budget forecasts and plans
Amid the election race, budget analysts expect Trump's policies to be aimed at creating new federal debt, which may become one of the key points of his agenda.

Treasury interest: markets await auction
The auction of 10-year Treasury notes scheduled for Wednesday will be an indicator of investor sentiment and their interest in U.S. government securities. The auction will help gauge how markets are assessing the current state of the economy and the outlook for interest rates.

Bank Stocks Under Pressure: Regulators Step Up Scrutiny
Bank stocks remain in focus after a sharp decline. On Tuesday, the Federal Reserve chairman unveiled a plan to increase capital requirements for the largest banks by 9%. The proposal was less stringent than the initial version, which met with considerable resistance from Wall Street, but still disappointed bank investors and some critics.

Mixed Signals from Wall Street: Earnings at Risk
Adding pressure on the banking sector were comments from JPMorgan Chase and Goldman Sachs. JPMorgan Chase cut its interest income forecasts, while Goldman Sachs CEO David Solomon said trading income could fall 10% in the current quarter.

UniCredit Targets Commerzbank: New Deal on the Horizon?
Meanwhile, in Europe, attention was drawn to Italian bank UniCredit, which announced Wednesday that it would acquire a 9% stake in Germany's Commerzbank. UniCredit is also seeking approval to potentially increase its stake in the bank, part of CEO Andrea Orcel's strategy to acquire a major German lender. The move is fueling speculation that UniCredit is preparing to make a move in the German market.
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[KostiaForexMart]

Hot Forecast for EUR/USD on September 12, 2024

The slowdown in inflation in the United States turned out to be more significant than even the most optimistic forecasts, yet the situation in the currency market remained unchanged. Almost immediately after it was revealed that the consumer price growth rate had slowed from 2.9% to 2.5%, major media outlets began focusing on core inflation, particularly in its monthly measure rather than the annual one. Core inflation increased by 0.3%. Although the U.S. central bank never mentions this indicator and is thus largely insignificant, the media started claiming that the Federal Reserve will slowly lower interest rates because of core inflation. As a result, the media frenzy somewhat balanced out the actual data, leaving the market in its previous position.

Today, all eyes are on the European Central Bank's board meeting. The market has long been prepared for the refinancing rate to be lowered from 4.25% to 4.00%, so this fact will not affect investor sentiment. Everything will depend on the statements ECB President Christine Lagarde may make during the subsequent press conference, particularly regarding the central bank's future actions. The market is concerned only with the pace of monetary policy easing at least until the end of this year. If the head of the ECB announces even one more rate cut, it will substantially boost the U.S. dollar, allowing it to continue strengthening its position.

The EUR/USD pair reached the 1.1000 level during high volatility, but no significant changes occurred. The volume of short positions on the euro decreased again, leading to stagnation within the upper deviation of the psychological range of 1.1000/1.1050.

In the four-hour chart, the RSI technical indicator is moving in the lower 30/50 area, indicating bearish sentiment among market participants.

Regarding the Alligator indicator in the same time frame, the moving average lines point downwards, aligning with the price movement's direction.

Expectations and Prospects
For the next stage of decline, the price needs to stabilize below the 1.1000 mark. However, this will only shift the support level locally to the lower region of the psychological level. Until then, traders are likely to consider a scenario of stagnation or a price rebound from the psychological level. A significant increase in long positions on the euro is possible if the price stabilizes above the 1.1050 mark.

The complex indicator analysis points to a price rebound in the short term, while indicators focused on a downward cycle in the intraday period.
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