Markets at the window in the wake of the possibility of a rate cut by the Fed already in September, thanks to the good inflation data.
FED: Bet on rate cut boosts markets
“Growing confidence in a Fed rate cut pushed up all three major U.S. indices at the close of markets on Tuesday. That optimism temporarily lifted Asian stocks on Wednesday, before profits were booked downsized”, explains Richard Flax, Chief Investment Officer of Moneyfarm stressed that “the MSCI AC Asia Pacific index was penalised by Japan’s Nikkei following US warnings to allies to take a tougher stance on China: the Biden administration has in fact signalled that it will impose severe trade restrictions if companies such as Tokyo Electron Ltd. and ASML Holding NV continue to supply Beijing with advanced semiconductor technology”.
Unknown Elections
In the United States “A renewed appetite for risk has emerged as investors bet on a Fed rate cut starting in September. The S&P 500 closed up 0.64% on Tuesday, the Dow Jones Industrial Average rose 1.85% and the Russell 2000 small-cap index rose 3.5%; the Russell index rose more than 10% after last week’s encouraging inflation data.”
Will it be Trump bis?
The Trump 2.0 – Flax also reports – “is starting to have a greater weight on the markets, while investors remain concerned about trade tariffs and geopolitical uncertainties, whose impact is real and tangible. Taiwan semiconductor stocks fell today after the Republican candidate questioned the commitments of thethe United States nand comparisons of the island in an interview published Tuesday”.
“The evolution of U.S. foreign policy under a second Trump presidency will have global repercussions, with effects all around, from energy markets to inflation. Wall Street firms including Goldman Sachs, Morgan Stanley and Barclays are warning clients to brace for higher inflation, as increase the possibilities that Trump reconquers the White House and implements protectionist trade policies,” concludes the expert
