FX Trader, Loonieviews.net
Summary: Equity markets remain in a funk following earnings disappointments from Amazon and Alphabet, but US GDP came in ahead of forecasts into the New York bell.
Amazon (AMZN: Nasdaq) and Alphabet (GOOGL: Nasdaq) didn’t do global equity markets any favours when their earnings releases disappointed analysts, but this morning’s GDP data may have been the balm for the burn. However, the evidence is sparse in early trading.
Wall Street is taking it on the chin at the market open. The tech-heavy Nasdaq is down 2.25%, the S&P 500 is down 1.5%, and the Dow Jones Industrial Average dropped 1.02%. However, this morning’s GDP report lifted equity futures off their lowest levels, and there is still hope for additional gains into the weekend.
US GDP rose 3.5% in Q3, beating the 3.3% forecast. The US Bureau of Economic Analysis attributed the gain to increases in personal consumption (PCE), private industry investment. and federal government spending. FX markets channelled Shaina Twain and sang “that don’t impress me much”; the US dollar stopped rising, but the retreat has been shallow.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
