Wednesday's Markets Update (September 25, 2024)

26 Sep 2024 by rate3

On Wednesday, stocks were mixed, with energy stocks declining while tech stocks gained, led by Nvidia, Intel, and AMD, suggesting strong AI demand. The overall market sentiment remains cautious due to concerns about a slowing economy, despite the recent rate cut. Internationally, the Euro rose (strengthened) to a 14-month high on Fed easing and China stimulus, while Argentina's economy shrank less than expected, confirming some success of Milei's drastic cost-cutting economic policies. BTC and ETH were stalled on 63K and 2.5K.

Details

The number of building permits issued in the US increased slightly in August MoM. Most regions saw increases, with the Midwest experiencing the largest jump. However, the West saw a slight decline. Single-family home permits and those for larger buildings both rose. 1Y trend: "Down" (Census)
Mortgage rates have been declining for eight weeks in a row, hitting a new low since September 2022 (6.13%). This drop is due to the Fed's interest rate cut. However, jumbo mortgage rates have increased slightly. 1Y trend: "Down" (MBA)

Crypto

Despite growing cryptocurrency ownership (15.5% of global 560M holders), its adoption as a payment method remains low. While many Americans own crypto, the majority (80%) still prefer traditional payment methods like credit cards for online shopping (10% prefer mobile wallets), with less than 1% (approximately 0.5%) using crypto. This suggests that crypto is often seen as an investment rather than a daily currency. Additionally, limited availability of crypto as a payment option among retailers (only 4% offer it) further hinders its widespread use. (source)

World Markets

The consumer confidence index in France increased in September for the first time in seven months. This rise was driven by less pessimism about personal finances and living standards, as well as improved views on savings and employment prospects. However, concerns about future inflation persisted. 1Y trend: "Up" (Insee)
Argentina's economy shrank less than expected in July , with a 1.3% YoY decline. This improvement was driven by rebounds in utilities and mining, as well as slower contractions in construction and manufacturing. Seasonally adjusted data showed growth, while the trend-cycle indicator slightly declined. 1Y trend: "Side" (Indec)

Currencies

The Euro rose above $1.11 - 14 month high - due to positive news from China and hints of a rate cut from the Fed. However, disappointing economic data in the Eurozone, particularly in Germany, increased expectations for an ECB rate cut. The Ifo business climate index for Germany fell to 85.4 in September, and recent PMI data showed a return to contraction in the Euro Area. The ECB had already reduced interest rates in September and hinted at more cuts to come. 1Y trend: "Up"