SVET Reports
Friday's Markets Update (September 27, 2024)
On Friday, stocks closed mixed, with the S&P and Nasdaq falling slightly while the Dow reached a new record. Investors weighed recent mixed data. The PCE price index hit its lowest level since Feb 2021, while the Michigan consumer index reached a 5-month high. Internationally, EU economic sentiment declined, while natural gas prices jumped to a 3-month high due to a hurricane causing power outages. BTC crossed the 200MA and continued to test $66K, while ETH is still stuck under $2.7K.
Details
The PCE price index rose 2.2% in August, the lowest since February 2021. This is down from 2.5% in July and below expectations of 2.3%. 1Y trend: "Side" (BEA)
The University of Michigan consumer sentiment index rose to 70.1 in September, the highest in five months. This was higher than the preliminary reading and market expectations. Consumers were more optimistic about current conditions and future prospects. Inflation expectations for the next year fell slightly, while those for the next five years rose. 1Y trend: "Down" (SCA)
Crypto
ETF assets exceeded $10T in September 2024, driven partly by $20B inflows into crypto ETFs. Investors have allocated $691B to US ETFs this year, with crypto ETFs contributing 3%. Bloomberg predicts ETF assets will reach $25T within a decade. (source)
World Markets
The Euro Area's economic sentiment indicator (ESI) slightly declined in September (96.2) from August's high (96.5). While optimism rose in services, consumer and construction sectors, pessimism deepened in industry and retail. France and Germany saw ESI decline, while Spain and Italy experienced significant increases. Employment expectations remained stable, but economic uncertainty rose. 1Y trend: "Side" (EC)
Brazil's unemployment rate dropped to 6.6% in August 2024, the lowest since 2014. This is good news for the economy and allows the central bank to raise interest rates to combat inflation. The number of unemployed people decreased by 500,000, while net employment reached a new high of 102.5 million. 1Y trend: "Side" (IBGE)
China's stock market had a best week since 2008. This followed policy announcements aimed at boosting economic growth, including a cut in bank reserve requirements and interest rates. High-growth sectors like technology, healthcare, consumer, new energy, and finance led the gains. 1Y trend: "Side"
Currencies
The Japanese yen rose 1% against the dollar after former defense minister Shigeru Ishiba won the leadership of Japan's ruling party. Ishiba is seen as less dovish than his rival, Sanae Takaichi, and favors economic stimulus. Tokyo's core inflation rate slowed to 2% in September, supporting the Bank of Japan's cautious approach to rate hikes. 1Y trend: "Side"
Commodities
Hurricane Helene caused a 5% surge in natural gas prices. The storm forced Gulf of Mexico producers to cut output, leading to power outages in several states. Despite the storm's impact, LNG exports remained strong, supporting prices. While gas production has been affected, the majority of US output remains secure. Natural gas prices have seen a substantial increase this week. 1Y trend: "Side"
On Week 40, will be busy with the labor market report and speeches from Fed officials, including Powell. Key data to watch includes JOLTS job openings, ISM Manufacturing and Services PMI, and factory orders. Inflation data will be released for several countries, including Germany, Italy, and South Korea. Japan will report on industrial production and retail sales, while China releases PMI data. Australia, Brazil, and South Korea will also report trade data.