September rate cut back on the cards after CPI data - US indices to see more volatility?

▪Two days after we ran our Monday post asking “Will the market get fresh clues on rate cuts this week?”, the US markets inched to yet another record high, while the overnight US CPI data has led the market to expect an impending rate cut in September.

▪Will US stock indexes continue to rally on the premise that the Fed and other central banks will be reducing policy interest rates (further) this year.

▪Investors expecting volatility in the US markets may wish to consider using US index warrants which offer leveraged exposure to three US indices at a small capital outlay! When the three US indices of Dow Jones, Nasdaq-100 and S&P500 rose around 1.3% to 1.5% this month, Macquarie’s US index call warrants that cost between SGD 0.08 made gains between 7.2% to 9.6%, while put warrants which cost between SGD 0.058 to 0.076 fell as much as 18%.

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