Stephen Innes
SPI Asset Management
As the sun rises over Asia, the markets calmly grab the baton from a relatively serene US scene. The current buzz isn't about whether the Fed will trim rates at its spotlight-stealing September 17-18 gathering but how deep they'll dig into the cuts. Market whispers are flirting with a conservative 25 basis point shave, though the door is still ajar for a bold 50 bps chop, with the odds sitting pretty at nearly 40% for the latter, per the eagle eyes at CME FedWatch.
The anticipation cranks up a notch as we approach the Fed’s annual pow-wow in Jackson Hole, slated for August 22-24. Here, Chair Jerome Powell is expected to don his maestro's cap, fine-tuning the Fed's symphony of rate strategies before the main event in September. The economic data parade isn’t taking a breather either. Come Thursday, the spotlight swings to the monthly retail sales and weekly jobless claims—figures set to be scrutinized more intensely in the wake of early August's lacklustre job numbers that sent a shiver of recession fears through the markets.
For now, global stocks are feeding off a diet of calming disinflation and a robust series of rate cuts from central banks across the globe, pulling volatility indices to lounge comfortably low. With inflation taking a back seat and the Fed poised to snip away soon, the backdrop of almost 3% real growth and a hearty 14% annual surge in corporate profits sketches a rosy panorama for US stocks and global equities will most certainly feed off.
SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.
Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.
Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.
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Feeding off a diet of calming disinflation
As the sun rises over Asia, the markets calmly grab the baton from a relatively serene US scene. The current buzz isn't about whether the Fed will trim rates at its spotlight-stealing September 17-18 gathering but how deep they'll dig into the cuts.