Goldman Sachs Suggests Fed Rate Cut in July Amid Rising Confidence  After Powell predictably avoided giving any clues about the timing of the Federal Reserve's next move, he did note that the last three inflation reports had "added to confidence." Speculation is now focused on when, not if, action will be taken. Goldman Sachs chief economist J...

Rotation in Action The Russell 2000 Index surged past the Nasdaq by 5.82% on Thursday, showing one of the biggest differences in performance in the last five years This major shift indicates a move from large-cap to small-cap stocks As 10-year bond yields dropped to a four-month low of 4.2%, small caps are gaining from these easing rates Investors ...

PPI Rises in June, Signals Potential Disruptions in Disinflation Trend  Following yesterday's soft Consumer Price Index (CPI) report, this morning's Producer Price Index (PPI) appears underwhelming. However, as previously mentioned, it is crucial to the ongoing disinflationary trend and indicates potential irregularities in this trajectory. In...

CPI Falls 0.1% in June, Fueling Rate Cut Speculations  Heading into today's CPI release, expectations were high for more signs of a return to disinflation. These expectations were exceeded as headline consumer prices fell 0.1% month-over-month in June, contrasting with the forecasted 0.1% increase, marking the largest month-over-month decline ...

Fed Signals September Rate Cut Amid CPI Expectations  Nick Timiraos has published two previews of a September rate cut within 24 hours, just as expected, following the guidance of his Federal Reserve sources. The message is clear: while the Fed may not cut rates at the July FOMC meeting, it will strongly indicate that a cut in September is imm...

U.S. Housing Market Faces Potential Crash Amid Rate Hike Effects  For the past two years, the Federal Reserve's approach to raising interest rates seemed to defy expectations, with home prices continuing to climb despite tighter financial conditions. This phenomenon, akin to "Erdoganomics," occurred because the housing market was dominated by ...

Inflation Expectations Fall; Modest Gains in Three-Year Outlook  Inflation expectations for the next year have decreased for the second consecutive month, dropping to 3.02% in June from 3.17% in May and a peak of 3.26% in April, according to the New York Fed's survey of consumer expectations. Meanwhile, three-year inflation expectations increa...

Updated Rate Outlook: Anticipating 2-3 Fed Cuts Amid Market Volatility  As we focus on the Fed's upcoming announcement on July 31st, we want to reiterate our prediction of two to three rate cuts this year, totaling 75 basis points. We also have some updated thoughts based on recent developments. Current yields for two-year and ten-year bonds a...

Global Markets Weekly Wrap KW 26 : US Equity Markets Reach New Highs Amid Lower Trading Volumes in July  Market Movers As the second half of 2024 begins, US stock markets hit new record highs despite reduced activity during the holiday-shortened trading week. Trading volume decreased by 19.1% compared to the 20-day average of 1.76 billion shar...

Fed Minutes Reveal Inflation Concerns, Divided Views on Rate Hikes  Since the last FOMC statement on June 12, prices for oil, gold, stocks, the dollar, and parts of the bond market have increased. The shorter end of the yield curve has decreased in yield since the last FOMC meeting, but the longer end remains higher despite today's drop in yie...

Upcoming July Rate Cut May Trigger Biggest Market Shock of the Year  Biden's tendency to distort economic data to make it appear stronger than it is in order to gain more votes has turned the analysis of nearly everything into a nightmare. We have now reached a point where any further data manipulations are as evident as Biden's dementia, some...

Fed's Reverse Repo Usage Drops Amid Renewed Financial System Stress  The Federal Reserve's Reverse Repo facility usage has decreased by $220 billion in the past two days, reflecting a decline in demand similar to the stress observed in December, rather than previous quarter-ends. However, this decrease is less pronounced than the $313 billion ...

Surge in Government Job Openings While Private Sector Declines  Following two months of significant drops in job openings, the Biden administration's Department of Labor announced a surprising increase in May. Job openings rose by 221,000, reaching 8.140 million, surpassing the forecast of 7.950 million. This came after April's figures were re...

Hedge Funds Aggressively Sell Tech Stocks Amid Record Highs  Last week, tech stocks reaching new record highs daily, Goldman's prime brokerage noted significant net selling of tech stocks by hedge funds over the past month, particularly in the Semiconductor and Semiconductor Equipment sectors, with Nvidia reversing its year-to-date trend. June...

Global Markets Weekly Wrap KW 26 : French and UK Bond Yields Rise as Elections Approach  French and UK Bond Yields Rise Ahead of Elections U.S. Small Caps and Tech Stocks Lead in Quiet Week Most major U.S. stock indexes saw gains in a relatively uneventful week, attributed to a lull before the release of second-quarter earnings reports, accord...

Election Risk Creeps into Markets: Investors Brace for Volatility  In a year marked by complacency and widespread option selling, the S&P 500 has enjoyed an almost uninterrupted rise, nearing 400 trading days without a 2% drop. It's no wonder that the upcoming elections haven't garnered much attention, despite their potential significant i...

Q1 GDP Growth at 1.4%, Consumer Spending Drops, Inflation Rises  No one paid much attention to today's final Q1 GDP figure, which is understandable since it reflects a period that ended over three months ago. Nonetheless, there were two key points worth noting: the GDP grew at an annualized rate of 1.4%, slightly above last quarter's downward ...

Strategists Cautious on European Stocks Amid Political Uncertainty  European stocks are expected to show limited growth potential, according to strategists who are taking a cautious approach due to upcoming elections in France that could significantly impact economic policy. The Stoxx Europe 600 is predicted to end the year at 517 points, clos...

Fed Reduces 2024 Rate Cut Projections Despite Softer April Inflation  U.S. inflation eased in April according to the Consumer Price Index (CPI) data released on Wednesday. Despite this softer inflation data, Federal Reserve policymakers reduced their expectations for interest rate cuts this year. The new dot plot published on Wednesday showed ...

Federal Reserve's Role: Economic Instability and Wealth Inequality  Few events in financial news garner as much attention as an announcement from the Federal Reserve. About eight times a year, the Federal Reserve's Federal Open Market Committee convenes to decide and announce its monetary policy plans. These announcements can significantly imp...