Global stock indices fell into negative territory on Thursday’s trading (18/7/24) triggered by a sell-off in overvalued Technology stocks spreading to the rest of the market; while the DOLLAR INDEX turned higher after US economic data released above expectations.
The US administration seems to be considering expanding the ban on companies exporting chip-making equipment to China, Bloomberg Businessweek reported on Tuesday; dragging down the Philadelphia SE Semiconductor index by 6.8%, which is the biggest daily decline since March 2020.
The DJIA surged 243pts / +0.6% to a new closing high of 41,198 on Wednesday (17/7/24), led by the Finance & Energy sector due to a wave of sector rotation from the Technology sector after a 6% plunge in Nvidia shares sent the NASDAQ down 2.8% and the S&P500 down 1.4%
After stronger than expected US RETAIL SALES data was seen as support for the Federal Reserve’s interest rate cut prospects in order to achieve a soft landing.
Most global stock markets moved in the green, along with the US Dollar in Tuesday’s trading (16.07.24) after stronger than expected US RETAIL SALES data was seen as support for the Federal Reserve’s interest rate cut prospects in order to achieve a soft landing.
Fed Chairman Jerome Powell said recent inflation data has added to the central bank’s confidence that inflation is safely under control, and therefore could make the Fed more willing to cut interest rates (even though inflation has not yet reached the Fed’s target of 2%).
The DJIA closed at a record high on Monday (15.07.24) amid increasing speculation of a September rate cut, after Fed Chairman Jerome Powell said recent inflation data has added to the central bank’s confidence that inflation is safely under control, and therefore could make the Fed more willing to cut interest rates (even though inflation has not yet reached the Fed’s target of 2%).
LATEST US CPI FURTHER CONFIRMS THE FED’S DOVISH TONE. The main highlight that market participants were waiting for last week was none other than US CPI for June, which proved to have slipped further to 3.0% yoy from 3.3% in the previous period, also lower than the 3.1% forecast.
There is speculation from some market strategists that FED CHAIRMAN JEROME POWELL may be uncomfortable cutting rates before the Presidential Election, although that reluctance could be overridden by concrete economic data that makes it clear that the US economy is clearly slowing & a rate cut is warranted.
