[Preview] Will the FRB rate cut be a boost? The CPI is expected to slow down in August, and the market's focus is on avoiding a hard landing.
The U.S. Bureau of Labor StatisticsAt 21:30 on Wednesday, September 11th (Japan time)atThe U.S. Consumer Price Index (CPI) for August is scheduled to be released.
According to market estimates,CPI has decreased from 2.9% to 2.6%, and core CPI remains at 3.2%.If the inflation rate decreases, concerns about economic recession and expectations of aggressive interest rate cuts increase, leading to a weaker dollar and a decline in US stocks.This may also lead to a decline in gold. If core CPI remains unchanged,the rate cut in September may be postponed until the end.There is a possibility that the inflation rate has steadily softened over the past few months, and economistshave been postponing the last rate cut in September.
Inflation rates have been steadily softening over the past few months, and economists areThe overall trend will continue in August.According to Mr. Bostjanic, the decline in gasoline prices will push down the overall inflation rate.
However, some service prices are expected to lag behind. Bank of America analysts have been predicting that there is a disparity between core commodity prices and core service prices. This is largely due to sticky rent inflation.
Over the past two years, rising housing costs have been one of the biggest contributors to overall inflation. Bank of America cautions that month-on-month data for rent inflation may remain volatile, but expects it to return to pre-trend levels in the medium term.
While overall inflationary pressures are expected to weaken due to cooling labor market and slowing wage growth rate, there is a possibility that inflation in the transportation services sector will remain sticky in August.
![]()
Interest in avoiding a hard landing.
The inflation rate is approaching the Federal Reserve's target, and the Federal Reserve is focusing its policy goals on the labor market in preparation for interest rate cuts. Therefore, inflation rate data is not as important for US stocks. Instead,The weakness in employment conditions and whether the Federal Reserve can avoid a hard landing is important.Is becoming.
According to market estimates,CPI has decreased from 2.9% to 2.6%, and core CPI remains at 3.2%.If the inflation rate decreases, concerns about economic recession and expectations of aggressive interest rate cuts increase, leading to a weaker dollar and a decline in US stocks.This may also lead to a decline in gold. If core CPI remains unchanged,the rate cut in September may be postponed until the end.There is a possibility that the inflation rate has steadily softened over the past few months, and economistshave been postponing the last rate cut in September.
Inflation rates have been steadily softening over the past few months, and economists areThe overall trend will continue in August.According to Mr. Bostjanic, the decline in gasoline prices will push down the overall inflation rate.
However, some service prices are expected to lag behind. Bank of America analysts have been predicting that there is a disparity between core commodity prices and core service prices. This is largely due to sticky rent inflation.
Over the past two years, rising housing costs have been one of the biggest contributors to overall inflation. Bank of America cautions that month-on-month data for rent inflation may remain volatile, but expects it to return to pre-trend levels in the medium term.
While overall inflationary pressures are expected to weaken due to cooling labor market and slowing wage growth rate, there is a possibility that inflation in the transportation services sector will remain sticky in August.
The inflation rate is approaching the Federal Reserve's target, and the Federal Reserve is focusing its policy goals on the labor market in preparation for interest rate cuts. Therefore, inflation rate data is not as important for US stocks. Instead,The weakness in employment conditions and whether the Federal Reserve can avoid a hard landing is important.Is becoming.
Eric Diton, President and Managing Director of Wealth Alliance, said, "The key issue facing stock market investors is whether the FRB waited too long to cut interest rates now that the risk of a recession has increased from two months ago. Inflation is no longer a major concern."
$S&P 500 Index (.SPX.US)$Has just finished its worst week since the Silicon Valley Bank's major crash in March 2023. Volatility has also increased, with the Chicago Options Exchange's $CBOE Volatility S&P 500 Index (.VIX.US)$Risen to nearly 24 from 15 between August 30 and September 6.
Option traders are betting on this number to rise, butSmaller than the market expects on CPI release dayAs of Friday morning,The S&P 500 is expected to fluctuate up and down 0.85% on WednesdayAs compiled by Piper Sandler, if so,Since the beginning of this year, the increase on the CPI announcement days has been the smallest..
On the other hand, ahead of the weak employment statistics last Friday, traders expected the implied volatility of the S&P500 to be 1.1%. According to data from Susquehanna International Group, this is the highest level this year in absolute terms, exceeding the average implied volatility of 2024 by 83%. The stock index fell by 1.7%, surpassing expectations.
Option traders are betting on this number to rise, butSmaller than the market expects on CPI release dayAs of Friday morning,The S&P 500 is expected to fluctuate up and down 0.85% on WednesdayAs compiled by Piper Sandler, if so,Since the beginning of this year, the increase on the CPI announcement days has been the smallest..
On the other hand, ahead of the weak employment statistics last Friday, traders expected the implied volatility of the S&P500 to be 1.1%. According to data from Susquehanna International Group, this is the highest level this year in absolute terms, exceeding the average implied volatility of 2024 by 83%. The stock index fell by 1.7%, surpassing expectations.
![[Preview] Will the FRB rate cut be a boost? The CPI is expected to slow down in August, and the market's focus is on avoiding a hard landing.](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20240909/32378a82abbe4837b27bf766975c9bd9.jpg?area=105&is_public=true)
Basically, the market sentiment is currently changing, and a rate cut from the Federal Reserve is seen as inevitable,The magnitude of the rate cut is not yet clear..
現在、FRBは最大限の雇用を維持するという二重の使命のもう一方に目を向けている。先週金曜日に発表された雇用統計によると、非農業部門雇用者数は先月0.14 million2000人増加し、3ヵ月平均では2020年半ば以来の低水準となった。
9月18日のFRBの利下げ決定を見据えて、スワップは少なくとも25bpの引き下げ予想を全面的に反映した。一方、UBSがまとめたデータによると、インプライド・ボラティリティは主要な雇用関連マクロ・イベントを前に加速しており、トレーダーが株式市場のさらなる下落リスクをヘッジするため、株式市場のボラティリティ指標（スキュー指数など）は高止まりしている。
デリバティブ・アナリスト会社Asym500の創設者であるロッキー・フィッシュマン氏は、「マクロ的な観点から見て、今回の結果が本当に期待外れであった場合、今回の株式市場の下落の可能性は、以前考えられていたよりも大きくなる可能性がある」と指摘した。
![[Preview] Will the FRB rate cut be a boost? The CPI is expected to slow down in August, and the market's focus is on avoiding a hard landing.](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20240909/a4a4127a918f48b481c21b77158f5c18.jpg?area=105&is_public=true)
Investors There are plenty of reasons for investors to be cautious about employment statistics rather than inflation dataThe S&P 500 index recorded its worst employment statistics release date since March 2022 last month. It fell 1.8% on Friday, August 2, and further by 3% on Friday, August 5, following weak employment statistics. Two weeks later, the inflation rate turned out to be almost as expected, and the S&P 500 stock price index rose by just 0.4%.
![]()
Rising US stock market volatility
According to UBS data, traders are expecting an increase in volatility of the S&P 500 index. According to UBS, commodity trading advisors (CTAs) make long and short bets in the futures market, understanding the price movements of assets, but believe there is little room to increase positions at the moment.
The Volatility Index (VIX) measures the implied volatility of stock index futures through over-the-counter options, and is currently in the low 20s, which in itself does not necessarily signal danger. However, this index has exceeded this year's average by as much as 52%, and the volatility curve suggests increasing risk in the coming months.From the commodity trading advisors to those using options, CTAs and various other asset managers are watching for signs of increasing market volatility, preparing to act as and when necessary.The index rose by 52% above average this year, suggesting that the volatility curve indicates an increased risk in the next few months.
According to UBS data, traders are expecting an increase in volatility of the S&P 500 index. According to UBS, commodity trading advisors (CTAs) make long and short bets in the futures market, understanding the price movements of assets, but believe there is little room to increase positions at the moment.
The Volatility Index (VIX) measures the implied volatility of stock index futures through over-the-counter options, and is currently in the low 20s, which in itself does not necessarily signal danger. However, this index has exceeded this year's average by as much as 52%, and the volatility curve suggests increasing risk in the coming months.From the commodity trading advisors to those using options, CTAs and various other asset managers are watching for signs of increasing market volatility, preparing to act as and when necessary.The index rose by 52% above average this year, suggesting that the volatility curve indicates an increased risk in the next few months.
![[Preview] Will the FRB rate cut be a boost? The CPI is expected to slow down in August, and the market's focus is on avoiding a hard landing.](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20240909/0d41386cb9884f759f3add66707af17c.jpg?area=105&is_public=true)
The Federal Reserve is entering a period of silence until the next policy decision, so no comments will be released until September 18th.
However, according to the latest Beige Book released by the Federal Reserve, business contacts are more concerned about economic slowdown than inflation. The Beige Book compiles information from business contacts in the Federal Reserve's twelve regions. However, there is no mention of a "recession" and only ten mentions of "inflation", the lowest level in 2024, according to DataTrek Research.
According to the GDPNow model of the Atlanta Fed, the real GDP growth rate for the third quarter has decreased to an annualized rate of 2.1% from about 3% a few weeks ago. This is just another signal that the Federal Reserve needs to cut interest rates before it's too late to prevent an economic slowdown. If the Federal Reserve does not cut interest rates, investors who have been driving the stock market higher on expectations that policy authorities will lower borrowing costs immediately, may have to consider the old saying "be careful what you wish for".
Diton of Wealth Alliance says it could especially be the case if concerns about the Federal Reserve's inadequate response to an economic slowdown in the stock market intensify.An economic slowdown will eventually impact corporate earnings and increase selling pressure.will it be.
ーmoomoo News Evelyn
Source: moomoo, Bloomberg, Morningstar
This article uses auto-translation in part.
However, according to the latest Beige Book released by the Federal Reserve, business contacts are more concerned about economic slowdown than inflation. The Beige Book compiles information from business contacts in the Federal Reserve's twelve regions. However, there is no mention of a "recession" and only ten mentions of "inflation", the lowest level in 2024, according to DataTrek Research.
According to the GDPNow model of the Atlanta Fed, the real GDP growth rate for the third quarter has decreased to an annualized rate of 2.1% from about 3% a few weeks ago. This is just another signal that the Federal Reserve needs to cut interest rates before it's too late to prevent an economic slowdown. If the Federal Reserve does not cut interest rates, investors who have been driving the stock market higher on expectations that policy authorities will lower borrowing costs immediately, may have to consider the old saying "be careful what you wish for".
Diton of Wealth Alliance says it could especially be the case if concerns about the Federal Reserve's inadequate response to an economic slowdown in the stock market intensify.An economic slowdown will eventually impact corporate earnings and increase selling pressure.will it be.
ーmoomoo News Evelyn
Source: moomoo, Bloomberg, Morningstar
This article uses auto-translation in part.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
Read more
Comment
Sign in to post a comment
大負けネコ : It is possible that the American market, not only investments but also manufacturing, services, energy resources, and other sectors, is experiencing a slowdown in growth due to the Federal Reserve spending too much time on alleviating inflation and mistakenly overlooking the "recessionary phase after the trigger=indicators such as manufacturing index and an increase in unemployment insurance claimants". In reality, Americans have a tendency (=bias?) to "buy everything on credit without thinking about the consequences first". That's why "credit card payments with VISA and Master" are frequently used. Even with "high interest loans", a small number of "affluent individuals" live prosperously and have strong consumer appetites thanks to "high interest deposits, long-term government bonds, and other financial products". However, it is the "middle class, impoverished individuals, and others who truly support the economy" that reflect the true nature of the real economy. For them, the current prices of food, clothing, gasoline, and ridiculously high rent are causing significant damage to their lives. The period of "economic indicators and sentiment analysis until the Bank of Japan's decision to raise interest rates" caused great confusion in the market due to the pressure of foolish politicians. However, initially, there was doubt (=personal opinion) that the periods of each economic indicator conducted by the Federal Reserve were actually "too long and missed the timing of rate cuts". For now, the extent of the rate cut at the FOMC meeting next week, September 17-18, will have a significant impact on the economic environment, including the stock markets of both Japan and the United States, whether positive or negative. In the end, there is also a possibility of "market turmoil continuing until the presidential election", but it might be a good idea to reduce positions a bit and observe the future of the markets in both Japan and the United States, don't you think? This year, many things (=horse racing predictions & contests & giveaways, etc.) have been "accurate
", but I sincerely wish that this prediction alone turns out to be wrong. Oho My Buddha 
️