Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
------------------------------------------------------------------
The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.
In the news:
Macro:
Macro events: SNB Policy Announcement, US Durable Goods (Aug), GDP Final (Q2), PCE Prices Final (Q2), Initial Jobless Claims (w/e 21st Sep)
Earnings: Costco, Accenture and Jabil
Equities: U.S. stocks saw mixed performances on Wednesday as investors evaluated the Federal Reserve's rate cut trajectory. The S&P 500 and the Dow declined by 0.2% and 0.7%, respectively, pulling back from earlier highs, with energy stocks such as Chevron (-2.4%) and Exxon Mobil (-2%) leading the losses. Conversely, tech stocks including Nvidia (+2.2%), Intel (+3.2%), and AMD (+2.3%) provided some support, helping the Nasdaq close flat. Micron surged 13% post market after reporting revenue and earnings that beat estimates and in additon projecting this quarter’s revenues to be between $8.5-$8.9 billion, above the $8.5 billion estimates. Looking ahead, investors are now focused on upcoming key economic data, including the GDP report tonight and the PCE inflation index on Friday.
Fixed income: Treasuries ended weaker across the curve as the market absorbed a $70 billion 5-year note auction and a surge in corporate bond supply. U.S. yields had decreased by 4 to 5 basis points across the curve, with spreads remaining within a narrow intraday range. The 10-year yields settled around 3.77%, down by 5 basis points for the day. With no major price catalysts, market focus shifted to duration events. The busy corporate issuance schedule was led by Oracle’s four-part offering, with the day’s total expected to exceed the top end of dealers’ forecasts of $25 billion for the week. The $70 billion 5-year note auction was solid, resulting in minimal price movement and stopping on the screws. Additionally, Treasury Secretary Janet Yellen is scheduled to speak at the U.S. Treasury Market Conference at 11:15 AM ET. Federal Reserve Governor Adriana Kugler expressed strong support for the central bank’s recent decision to lower borrowing costs by half a point last week, noting that further rate cuts would be appropriate if inflation continues to ease as anticipated.
Commodities: Oil stabilized after its largest drop in two weeks, as Libya's rival factions agreed on new central bank leadership, potentially allowing some crude production to resume. West Texas Intermediate stayed below $70 a barrel after a 2.6% decline on Wednesday, while Brent crude hovered near $73. Libya's eastern and western administrations "initialed an agreement" on the central bank board, with a signing ceremony scheduled for Thursday, according to the UN. A stronger dollar also pressured commodities priced in the currency, including oil. Spot gold hit a record $2,670.57 an ounce before trimming gains, having surged 29% this year, while silver climbed 34%. Indian gold demand is expected to be strong due to a reduction in import tax and an anticipated robust festival and wedding season. Base metals steadied as investors assessed the impact of a Chinese stimulus package on the world's largest metals consumer.
FX: The US dollar turned back higher due to its safe-haven appeal after significant Middle Eastern escalations and focus will turn back slightly to Fed today as Chair Powell and NY Fed’s Williams take to the wires along with a host of other committee members. Labor market focus also makes it key to watch the weekly US jobless claims print that will be out today. Activity currencies led the losses against the US dollar, with kiwi dollar plunging back below 63 cents and Aussie dollar failing at 69 cents and back below 0.6850. Japanese yen and Swiss franc were also in red despite being safe-havens with the former reaching three-week lows against the US dollar. The offshore Chinese yuan also retreated after trading below the key 7 handle against US dollar for a brief period yesterday.
For all macro, earnings, and dividend events check Saxo’s calendar.
For a global look at markets – go to Inspiration.
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)