Friday's Market Update (September 20, 2024)

24 Sep 2024 by rate3

On Friday, stocks traded mixed, following a volatile week. The S&P and Nasdaq declined slightly, while the Dow rose. Fed policymakers had differing views on inflation, with one supporting a larger rate cut and another warning against premature action. For the week, stocks posted gains. Internationally, the Central Banks of China and Japan held their rates steady, while gold reached new ATH on the Fed's easing. BTC rose until it hit its 200-day moving average and then retreated to around 63K. ETH followed but at a much slower pace, barely reaching 2.6K.

Crypto

Solana (SOL) has over 75 million monthly active addresses. However, traders remain cautious about its prospects as technicals indicate a southward trend. This exemplifies how detrimental political considerations are for crypto markets, where even coins with rapidly growing user numbers are unable to perform well due to negative expectations about the regulatory climate.

World Markets

Consumer confidence in the Euro Area and European Union improved in September, reaching the highest levels since early 2022 (-12.9) but still remained negative. This positive trend follows recent interest rate cuts by the European Central Bank. 1Y trend: "Up" (EC)
The People's Bank of China (PBoC) kept its key lending rates unchanged in September at 3.35%, aligning with market expectations. This decision came despite a rate-cutting cycle in the US and uncertainty in China's economic recovery. The PBoC focused on short-term rates and delayed a medium-term lending facility operation. 1Y trend: "Down" (PBC)
India's foreign exchange reserves reached a new high of $689.5B in September, driven by strong capital inflows. The Sensex hit a record high, and the 10-year G-Sec yield fell below 6.8%. The RBI likely purchased foreign exchange to support Indian exports and maintain currency competitiveness. 1Y trend: "Up" (RBI)
The Bank of Japan maintained its key interest rate at 0.25% in September, signaling a cautious approach to further tightening. The central bank expressed concerns about financial market volatility and the need for more time to assess economic conditions. While Japan's economy is recovering, some areas remain weak. Inflation has risen, but underlying inflation is expected to increase gradually.
1Y trend: "Up" (BoJ)
Turkey's government debt increased in August 2024 to a new ATH of 8.34T TRY. It's 4x in 4 years. The debt has been on an upward trend in recent years, rising significantly from its record low of 15 TRY million in 1986. 1Y trend: "Up" (TR)
Spain's trade deficit narrowed in July to 3.2B (2016 level), with exports growing faster than imports. Exports increased in various sectors, led by food, energy, and raw materials. Imports also rose, but at a slower pace, with declines in automotive products, capital goods, and energy. 1Y trend: "Up (Decreasing)" (ES)
Switzerland's current account surplus rose to a 1.5-year high in Q2. The surplus increased due to a wider goods surplus and a narrower services deficit. Secondary income deficit declined sharply, while primary income deficit rose slightly. 1Y trend: "Up (Decreasing)" (CH)
Namibia's economy grew by 3.5% in Q2 2024, driven by financial services and trade. The financial services sector expanded by 30%, with insurance and banking subsectors leading the growth. Mining and quarrying contracted due to lower diamond and uranium production. Agriculture and forestry also shrank due to insufficient rainfall. 1Y trend: "Side" (NSA)

Currencies

The Brazilian real appreciated against the dollar in September, reaching a one-month high (5.45). This was driven by the Brazilian central bank's interest rate hike and the US Federal Reserve's unexpected rate cut. While inflation in Brazil has eased, concerns about government spending and its long-term impact on inflation led to the rate hike. The larger interest rate differential between Brazil and the US also favored the real. 1Y trend: "Up (Depreciates)"

Commodities

Gold prices hit a record high (2622) on Friday, driven by expectations of lower interest rates and rising geopolitical tensions. The Fed's recent rate cut and projections for further cuts boosted gold's appeal. Additionally, escalating tensions in the Middle East increased demand for gold as a safe-haven asset. 1Y trend: "Up"

Week 39, will feature inflation data, consumer spending, and Fed speeches. Globally, PMI data, interest rate decisions, and inflation reports will be released for various countries.