Outlook for the US market: Significant rate cut in the USA, S&P 500 reaches a new record high! S&P 500 starts with an 84-point increase.
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Market Overview
The Dow Jones Industrial Average, which is composed of high-quality stocks, started the U.S. market at $41,972.56, up $469.46. The Nasdaq Composite Index, which has a high proportion of technology stocks, started at 17,980.89, up 407.59 points. The S&P 500 Index, which consists of 500 large-cap stocks in the U.S., rose 84.37 points to 5,702.63.
The Dow Jones Industrial Average, which is composed of high-quality stocks, started the U.S. market at $41,972.56, up $469.46. The Nasdaq Composite Index, which has a high proportion of technology stocks, started at 17,980.89, up 407.59 points. The S&P 500 Index, which consists of 500 large-cap stocks in the U.S., rose 84.37 points to 5,702.63.
Top News
Hawkish move, 50bp!
The Federal Reserve, at the FOMC, decided to cut the policy interest rate by 0.50%, to 4.75-5.00%.
●Chair Powell stated that we should not expect further rate cuts of 0.5%, and additional adjustments will be determined by data, outlook, and balanced risks at each meeting.
The Federal Reserve, at the FOMC, decided to cut the policy interest rate by 0.50%, to 4.75-5.00%.
●Chair Powell stated that we should not expect further rate cuts of 0.5%, and additional adjustments will be determined by data, outlook, and balanced risks at each meeting.
Nick Timiraos, a Fed watcher, pointed out the next question is where the rate cut will end and at what pace it will be carried out.
Bullish on precious metals.
The decrease in interest rates reduces the opportunity cost of holding bullion.
UBS notes that silver also benefits from rising gold prices.
UBS predicts that the silver market will continue to face a supply shortage in the coming years, leading to a continuous decrease in above-ground inventory.
Investors see gold as an effective hedge during periods of uncertain economic growth.
The decrease in interest rates reduces the opportunity cost of holding bullion.
UBS notes that silver also benefits from rising gold prices.
UBS predicts that the silver market will continue to face a supply shortage in the coming years, leading to a continuous decrease in above-ground inventory.
Investors see gold as an effective hedge during periods of uncertain economic growth.
The future of US stocks.
The 50bp rate cuts in 2001 and 2007 were carried out as a "rescue rate cut" due to the dot-com bubble and subprime mortgage crisis, while this time it seems to be "preventive rate cuts."
● The Dow and S&P500 are close to historical highs. At present, the 2024 earnings growth rate for the S&P500 index is expected to be 9.8%, exceeding the 10-year average of 8%.
● In May, the TTM PER of the S&P500 is over 25 times, exceeding the average + standard deviation of the past 10 years.
● According to BofA, the main reason for the rise of the S&P500 is performance.
The 50bp rate cuts in 2001 and 2007 were carried out as a "rescue rate cut" due to the dot-com bubble and subprime mortgage crisis, while this time it seems to be "preventive rate cuts."
● The Dow and S&P500 are close to historical highs. At present, the 2024 earnings growth rate for the S&P500 index is expected to be 9.8%, exceeding the 10-year average of 8%.
● In May, the TTM PER of the S&P500 is over 25 times, exceeding the average + standard deviation of the past 10 years.
● According to BofA, the main reason for the rise of the S&P500 is performance.
The US government faces another shutdown threat.
●On the 18th, the US House of Representatives rejected the Republican-proposed interim budget of 6 months with a majority vote against it.
● If an interim budget is not passed by September 30, some government agencies will be shut down.
●On the 18th, the US House of Representatives rejected the Republican-proposed interim budget of 6 months with a majority vote against it.
● If an interim budget is not passed by September 30, some government agencies will be shut down.
The Bank of Japan announced the policy interest rate.
●It is expected that there will be no policy changes in this September meeting, butDepending on the comments of Governor Ueda and others regarding the acceleration of interest rate hikes, the dollar-yen exchange rate and stock prices could have a significant impact once again, and there is also the possibility of heading towards a second bottom..
●BofA expects that this meeting will have a minimal impact on the yen exchange rate, and the USD/JPY is expected to return to 150 yen by the fourth quarter of 2024.
●According to Kohei Onishi of Mitsubishi UFJ Morgan Stanley Securities, the impact of exchange rates on the volatility of the Japanese stock market is likely to be small, and there is a possibility of a gradual appreciation of the yen in the future, but the overall trend is expected to be more stable.
Related articles
Will the 'nightmare' come again? Second bottom in BOJ meeting? If the hawkish sentiment strengthens for interest rate hike within this year, it will have a significant impact on the market. [BOJ meeting preview]
●It is expected that there will be no policy changes in this September meeting, butDepending on the comments of Governor Ueda and others regarding the acceleration of interest rate hikes, the dollar-yen exchange rate and stock prices could have a significant impact once again, and there is also the possibility of heading towards a second bottom..
●BofA expects that this meeting will have a minimal impact on the yen exchange rate, and the USD/JPY is expected to return to 150 yen by the fourth quarter of 2024.
●According to Kohei Onishi of Mitsubishi UFJ Morgan Stanley Securities, the impact of exchange rates on the volatility of the Japanese stock market is likely to be small, and there is a possibility of a gradual appreciation of the yen in the future, but the overall trend is expected to be more stable.
Related articles
Will the 'nightmare' come again? Second bottom in BOJ meeting? If the hawkish sentiment strengthens for interest rate hike within this year, it will have a significant impact on the market. [BOJ meeting preview]
Summary from an analyst's perspective
The FRB is focusing on the labor market, and employment statistics are an important indicator according to Citi.
The FRB has a further sense of caution about the easing cycle, according to JP Morgan.
The FRB's easing cycle will continue for two years, according to BlackRock.
The threshold for the FRB's expansion of interest rate cuts is low, according to Goldman Sachs.
The FRB's interest rate cuts are aimed at job security, and two rate cuts are expected by the end of the year, according to BofA.
The FRB is focusing on the labor market, and employment statistics are an important indicator according to Citi.
The FRB has a further sense of caution about the easing cycle, according to JP Morgan.
The FRB's easing cycle will continue for two years, according to BlackRock.
The threshold for the FRB's expansion of interest rate cuts is low, according to Goldman Sachs.
The FRB's interest rate cuts are aimed at job security, and two rate cuts are expected by the end of the year, according to BofA.
-moomoo News Citron
This article is partially translated using auto-translation.
This article is partially translated using auto-translation.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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james_007 : The S&P 500 average rose by 84.37 points to 5702.63. That's great! The evaluation price of eMAXIS Slim S&P has increased today, so we can expect more tomorrow!