Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Senior Relationship Manager
Summary: A busy week ahead with US Inflation, the ZEW, Retail Sales and important earnings.
Good morning,
I had the pleasure of discussing last week’s market move and how to trade it with Finanzfabio (in German) : Korrektur oder Crash? Aktuelle Börsenlage (youtube.com)
Friday was a calm day for once which was probably good for the mental state of traders. The Dow gained 0.1% on Friday and lost 0.6% for the week, the S&P 500 gained 0.5% to end the week flat, the Nasdaq rose 0.5% to close the week at -0.18%. The GER40 rose 0.33% to finish the week in the green. Rheinmetall rose 12% last week on strong orders and broker reviews.
Please see Peters weekly equity comment Low recession probability, strong earnings, and US inflation
Adani Group is in focus of Hindenburg Research again, the shares fall in India
Ten year yields remained near 3.93 and the USD Index 103.18 EURUSD is 1.0920, GBPUSD 1.2765 and USDJPY 147.20, Gold and Silver are friendly at 2432 and 27.60, Bitcoin loses 3.5% to trade at 58500
With rate cuts looming, Althea points out High Interest Rates Leading to Recession: High interest rates, initially implemented to combat inflation, often precipitate economic slowdowns and lead to recessions. This pattern was evident in the early 1990s, 2001, and 2007-2009 recessions, where the Federal Reserve's rate hikes to control inflation contributed to the onset of economic downturns.
Ole commented on commodities Cocoa rose more than 10% on Friday.
In the coming week markets should remain on edge for a number of reasons:
Trade safely