Ipek Ozkardeskaya
Swissquote Bank Ltd
We went from ‘the Federal Reserve (Fed) could hardly cut in September’ to ‘it would be a mistake not to cut in July or September’ (source: Mohammad El Erian’s Linkedin feed) in a blink of an eye. We’ve been seeing the lower S&P500 and Nasdaq countered by a rise in economically sensitive sectors since about two weeks now. And diving into the S&P500, around 300 of the stocks in there actually gained yesterday, US crude rebounded after testing the $77pb support and the Russell 2000 stocks rallied 1.26% – reinforcing the rotation trend – from tech to non-tech - after the latest growth update showed that the US economy not only secured a 2% growth but grew at an impressive pace of 2.8% last quarter – double the first quarter number which had seen the growth rate fall to 1.4%.
Interestingly, the US strong GDP read yesterday didn’t discourage the Fed doves yesterday. All eyes are on the core PCE data today.
Unfortunately, European stocks don’t benefit from the reflation vibes as earnings from the European companies fail to keep investors optimistic about the future.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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