General Market Analysis – 23/09/24

Stocks to Start the Week on a Positive Note – Dow Above 42,000

Markets are set to begin the week on a positive footing after Wall Street ended last week near record highs. Although it was a mixed day for the major indices, they remain close to their highest levels, with the Dow closing at a new all-time high. The Dow rose 0.09%, while the S&P and Nasdaq saw slight declines of 0.19% and 0.36%, respectively. The dollar regained some lost ground, with the DXY index up 0.12% and USD/JPY rallying back to the 144.00 level. Treasury yields edged lower, with the 2-year yield dropping 2.4 basis points to 3.580% and the 10-year yield falling 1.4 basis points to 3.726%. Oil prices dipped following their recent rally, with Brent closing down 0.52% at $74.49 and WTI down 0.40% at $71.92. However, the standout mover was once again gold, which surged to a new record high, closing up 1.36% at $2,621.95.

Gold Breaks Through Barriers – Now Above $2,600

Gold prices surged again on Friday, reaching fresh record highs. In the current environment, traders are anticipating further gains in the coming week. Last Wednesday’s 0.5% rate cut by the Federal Reserve was seen as a strong signal for bulls, as lower returns on the dollar have made gold more attractive. The shift from a 25-basis point cut to a 50-basis point cut has also raised concerns among investors that the Fed may be aware of potential economic declines in the coming months. Gold has now climbed over 6% from its September low to peak, and over 3% from its post-Fed dip on Wednesday. Unless the dollar’s trajectory changes significantly this week, many traders expect this trend to continue ahead of key US inflation data on Friday.

Busy Monday to Kick off the Trading Week

Global financial markets are set for a busy week after investors welcomed the Fed’s 0.5% rate cut on Wednesday, pushing stocks to new highs. There is little on the event calendar in the Asian session today to disrupt this momentum, but Yen traders should be cautious, as Japan is on holiday just one day after the latest BOJ rate decision, which could lead to volatile conditions. Following the European open, a series of Service and Manufacturing PMI numbers will be released across major economies, including France, Germany, the Eurozone, the UK, and the US. Later in the day, we have the first of many Fed speakers for the week, with members Goolsbee and Kashkari scheduled to speak.

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