Friday's Markets Update (September 13, 2024)

17 Sep 2024 by rate3

On Friday, stocks continued to rise on momentum, fueled by expectations of a 50-basis-point Fed rate cut due to lower inflation and rising unemployment. Tech and semiconductor stocks led the rally. Internationally, gold reached a new ATH while silver surged past 30 as industrial production in the Eurozone declined. BTC climbed above 60K, while ETH broke past 2.4, following MicroStrategy's announcement of purchasing 1B worth of BTC.

Details

The University of Michigan’s consumer sentiment index rose in September, reaching its highest point since May. Consumers’ optimism about future financial conditions and the economy improved, while inflation expectations for the coming year declined. However, long-term inflation expectations rose slightly. 1Y trend: "Up" (SCA)

Crypto

PolitiFi meme coins, inspired by political figures, have experienced a significant price drop after a strong first half of 2024. Despite the upcoming US elections and growing political interest in crypto, these tokens have lost nearly 90% of their peak value. The decline is attributed to a combination of factors, including the broader crypto market's volatility and the waning excitement surrounding spot BTC ETFs. (source)

World Markets

Industrial production in the Eurozone fell by 2.2% in July YoY. This marks a decline from the average growth rate of 0.89% since 1991. The highest level (41.4) was recorded in April 2021, while the lowest point (-28.4) was in April 2020. 1Y trend: "Down" (EU)
Chinese banks increased lending in August to CNY 900B , but the total remained below expectations. Outstanding loans grew at a slower pace (8.5%), indicating weaker demand. Total social financing rose (CNY 3030B), but remained below year-ago levels (CNY 31279). The PBoC's rate cuts have not significantly boosted credit appetite, partly due to government regulations. 1Y trend: "Down" (CN)
The IBC-Br, a leading indicator of Brazil's economic activity, declined in July by 0.4% after three consecutive months of growth. Industry activity fell sharply, while services and retail sectors expanded. Despite the July decline, the IBC-Br remains higher compared to previous year. 1Y trend: "Up" (BCB)
The Russian ruble weakened past 91 as the central bank raised interest rates (19%) to combat rising inflation (7%). Increased government military spending has fueled inflation, leading to concerns about stagflation. 1Y trend: "Side"

Commodities

Gold hit a record high (2580) due to a weaker dollar and lower bond yields. Rising jobless claims and stronger-than-expected producer prices fueled expectations of more aggressive Fed rate cuts. The ECB also cut rates as anticipated, indicating confidence in declining inflation. 1Y trend: "Up"
Silver prices surged past 30 this week due to speculation of a larger-than-expected Fed rate cut. China's economic outlook and growing renewable energy sector are also influencing silver demand. 1Y trend: "Up"

On Week 38, investors focus will be on the Fed meeting at Wed, Sept 18 as well on other central banks worldwide which will announce interest rate decisions, including the Bank of England and Bank of Japan. Economic data releases will focus on inflation, retail sales, manufacturing activity, housing indicators, and GDP growth.