Rate Cut Hopes Dashed: What's Next for the Market? [Learn Premium Weekly Review]
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🌐 Inflation and Employment Surge Together, Toppling Rate Cut Expectations
After the U.S. The Bureau of Statistics released the hot non-farm payroll data for March last week. This Wednesday's key CPI data showed a higher-than-expected increase for the second month in a row, with growth rates exceeding expectations for three consecutive months. Housing and energy continue to be the main drivers of the CPI increase. 👇
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The two core data suggest that the recent high-interest rate environment has not further deteriorated employment, while inflation has shown signs of rebound.
Following the release of the CPI data, investor expectations for an imminent rate cut by the Fed were completely dashed. The pricing of interest rate swap contracts suggests that traders now expect the first rate cut to be delayed from September to November, with the size of the cut reduced from 75 basis points to around 40 basis points.
The muted enthusiasm for a rate cut was reflected in the stock market, with all three major stock indexes falling more than 1% after the CPI release. 🥶
Market expectations for Fed rate cuts have been overly optimistic this year. However, a recent string of strong inflation numbers may lead to a temporary correction in the stock market. Everyone needs to cautiously plan their positions and set profit-taking and stop-loss levels. To know the market's future direction, we can pay attention to the upcoming earnings season. 🎓
🔥 Gold, Silver, and Base Metals Rally: What Signals Are Being Sent?
According to a research report by JP Morgan's Commodity Research Team, the value of non-position-squaring contracts in the global commodities market increased by about 3.5% (about $47 billion) weekly, driven by the sharp rise in international crude oil, refined oil products, and metals market prices, to reach a total value of about $1.39 trillion, the highest level since June 2022.
The S&P GSCI global commodity price index is up 12% this year, outperforming the $S&P 500 Index (.SPX.US)$, which is up 9.1%. $Copper (LIST2510.US)$ and oil are up more than 10% and 17%, respectively. $Gold (LIST2110.US)$ also set a new record, rising 13% to $2,332 per troy ounce. 📈
The rally is based on economic growth that will increase demand in the U.S. and China. Two reports last week showed a rebound in manufacturing activity in both countries, sparking a fresh wave of buying and further boosting the share prices of energy and materials companies. Looking ahead, gold prices are expected to rise further, driven by global central bank buying and the impact of tensions in the Middle East. 🎯
The rapid growth of the commodities market has attracted a wave of new entrants, such as technology-focused trading participants, hedge funds, banks, and mining and processing participants, creating demand for additional liquidity and risk management products. In addition, the strong resilience of U.S. economic growth and the easing trend in financial conditions have significantly increased the likelihood that the Federal Reserve will achieve its vision of a "soft landing" for the U.S. economy before 2025. Expectations of the Fed's monetary easing cycle will also support the continued rise of the commodity market.
The S&P GSCI global commodity price index is up 12% this year, outperforming the $S&P 500 Index (.SPX.US)$, which is up 9.1%. $Copper (LIST2510.US)$ and oil are up more than 10% and 17%, respectively. $Gold (LIST2110.US)$ also set a new record, rising 13% to $2,332 per troy ounce. 📈
The rally is based on economic growth that will increase demand in the U.S. and China. Two reports last week showed a rebound in manufacturing activity in both countries, sparking a fresh wave of buying and further boosting the share prices of energy and materials companies. Looking ahead, gold prices are expected to rise further, driven by global central bank buying and the impact of tensions in the Middle East. 🎯
The rapid growth of the commodities market has attracted a wave of new entrants, such as technology-focused trading participants, hedge funds, banks, and mining and processing participants, creating demand for additional liquidity and risk management products. In addition, the strong resilience of U.S. economic growth and the easing trend in financial conditions have significantly increased the likelihood that the Federal Reserve will achieve its vision of a "soft landing" for the U.S. economy before 2025. Expectations of the Fed's monetary easing cycle will also support the continued rise of the commodity market.
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Wafer foundry reported hefty losses. $Intel (INTC.US)$ fell more than 8% on April 3 and continues to fall. Large losses and disappointing performance are undoubtedly a major blow to Intel, which has undergone a major transformation and is trying to surpass TSMC and regain its leading position. This week, combining hot news and technical analysis, let's dive into $Intel (INTC.US)$, to see its opportunities and challenges.
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