Daily Market Analysis From Forexmart

Nasdaq in the red: weak bond auction, tech companies fall

Tech sector under pressure
The U.S. stock market closed lower on Wednesday, with the Nasdaq index losing 1%. The main reason was a decline in tech stocks, exacerbated by weak interest in the 10-year Treasury auction, which caused investor jitters amid volatile trading.

Morning gains turn to losses
Trading started on a positive note with tech giants rising, but both indexes began to lose ground as the day progressed. Investors, still jittery from the recent global sell-off in equities, added to the sell-off after a weak Treasury auction sent the market lower.

Red Zone: All Indexes Die
All three major indexes ended the day in the red, with losses widening just before the close. The tech-heavy S&P 500 (.SPLRCT) fell 1.4%, becoming the biggest drag on the benchmark index.

Recession Worries
Investors are worried about a possible U.S. recession, as well as weaker forecasts from major U.S. companies. These factors are weighing on the market.

Day's Results: Big Losses
The Dow Jones Industrial Average (.DJI) fell 234.21 points, or 0.6%, to 38,763.45. The S&P 500 (.SPX) lost 40.53 points, or 0.77%, to 5,199.5. The Nasdaq Composite (.IXIC) fell 171.05 points, or 1.05%, to 16,195.81.

Expert Opinions
Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina, said investors may also have been taking profits after stocks rebounded Tuesday.

Big Losses
The Nasdaq and S&P 500 each lost at least 3% on Monday, underscoring the volatility of the current market environment.

Impact of Comments from Japan
Stocks received some support Wednesday after Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said the central bank has no plans to raise rates amid volatile financial markets.

Nikkei surges after decline
Japanese stocks rose on the news. The Nikkei (.N225) rose 1%, extending a 10% rebound that began on Tuesday after a sharp decline on Monday. The Nikkei's sudden 12.4% decline triggered a global decline in equities as investors turned away from risky assets.

Japan rate hike fallout
The Bank of Japan's surprise rate hike on July 31 to a level not seen in 15 years triggered a sell-off in global markets. Investors began unloading their yen positions in a carry trade, sending the low-yielding Japanese currency, which is typically used to buy high-yielding assets, sharply higher.

Disappointing Corporate Results
Walt Disney Shares Slide
Walt Disney (DIS.N) shares fell 4.5% after the company warned of "moderate demand" for its theme parks in coming quarters.

Super Micro Computer Slide
Super Micro Computer (SMCI.O) shares tumbled 20.1% after the company reported lower-than-expected quarterly adjusted gross profit. Rival Dell Technologies (DELL.N) also fell 4.9%.

Market Expectations
Federal Reserve Eyes
Investors are eagerly awaiting further comments on monetary policy from the Federal Reserve, with particular attention focused on an event in Jackson Hole, Wyoming, where Fed Chairman Jerome Powell is scheduled to speak.

Trading Activity
Trading volume on U.S. exchanges on Wednesday was 12.93 billion shares, slightly above the 20-day average of 12.63 billion shares.

Declining Stocks Prevail
Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by 1.48 to 1. On the Nasdaq, the ratio was even more pronounced, with decliners outnumbering advancing stocks by 2.08 to 1.

Highs and Lows: Market Trends
S&P 500 and Nasdaq Performance
The S&P 500 posted 16 new 52-week highs and 9 new lows. The Nasdaq Composite posted 34 new highs and 195 new lows, putting the tech sector under significant pressure.

External Factors
Oil Price Rise
Oil prices rose on a bigger-than-expected draw in U.S. crude inventories and a possible escalation in the Middle East. However, investors continue to voice concerns about weak demand in China.

S&P 500 Volatility
Daily Performance
After a morning rally on Wednesday, the S&P 500 began to lose ground around midday and then fell further after the 10-year U.S. Treasury auction.

Profit Taking
Bell also noted that some investors are using short-term stock gains to take profits, adding to the volatility in the market.

MSCI falls, STOXX 600 rises
The MSCI World Share Index (.MIWD00000PUS) fell 0.35 points, or 0.05%, to 770.64, after hitting a session high of 783.83. Meanwhile, Europe's STOXX 600 (.STOXX) ended the day up 1.5%, reflecting positive momentum in European markets.

FX Markets: BoJ Statements React
Yen Falls
The Japanese yen weakened after the Bank of Japan's rate hike announcements, somewhat reassuring investors worried about the volatility of the Japanese currency. The yen strengthened sharply against the dollar on Monday amid concerns about a possible U.S. recession, sending markets falling broadly.

Strengthening dollar
The US dollar strengthened 1.75% against the yen, reaching 146.83. The dollar index, which tracks the greenback against a basket of currencies including the yen and the euro, rose 0.2% to 103.19. The euro, meanwhile, fell 0.08% to $1.0921.

Bond yields: An analysis of supply and demand
US Treasury yields rise
US Treasury yields rose after weak demand at a $42 billion auction of 10-year notes. Companies rushed to place their debt amid growing risk appetite. Traders are closely monitoring supply and awaiting more economic data to assess the health of the US economy.

Specifics
The 10-year Treasury yield rose 7 basis points to 3.958%, up from 3.888% late Tuesday. The 30-year yield also rose, adding 8.1 basis points to 4.2579%.

These moves highlight the current market sentiment, with investors seeking to balance risk and return amid economic uncertainty.

Two-Year Yields Decline
The two-year Treasury yield, which closely tracks interest rate expectations, fell 0.2 basis points to 3.9827%, down from 3.985% late Tuesday. The move reflects a slight softening in investor expectations for future Federal Reserve action.

Energy Markets: Oil Prices Rising
Oil Prices Strengthening
Energy markets are seeing a significant rise in oil prices. US crude oil rose 2.77% to $75.23 per barrel. Brent crude prices also rose, rising 2.42% to $78.33 per barrel. These changes come amid concerns about depleting reserves and a possible escalation of conflicts in the Middle East.

Precious Metals Market: Gold Prices Fall
Gold Price Decline
Precious metal prices declined. Spot gold lost 0.2% to $2,384.59 per ounce. US gold futures also fell, falling 0.05% to $2,387.80 per ounce. These changes may be related to fluctuations in currency markets and changing investor sentiment.

Results and Prospects
Markets continue to show volatility in response to changes in economic indicators and geopolitical risks. Investors are closely monitoring developments, trying to adapt their strategies to the new conditions. Interest rate expectations and rising oil prices play key roles in shaping market sentiment.
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S&P 500 Erases Losses: Week in Review and Wall Street Scenarios for Next Week

Markets Stabilize: S&P 500 Ends Week Little Changed
The S&P 500 stock index showed solid gains on Friday, managing to almost completely recoup losses suffered earlier in the week amid recession fears and a curtailment of global yen-financed trade. The market remained almost flat for the week, despite sharp fluctuations.

Technology Pulls Market Up
Technology was the biggest contributor to the S&P 500's gains on Friday, proving to be the engine that pulled the market out of the negative territory. Meanwhile, the Cboe Volatility Index, known as Wall Street's "fear gauge," fell sharply after a sharp jump earlier in the week.

Monday's swings and recession fears
The market had a particularly bad start to the week, with a sharp drop on Monday continuing the sell-off that began the previous week. Investors were spooked by a weaker-than-expected July employment report, raising concerns about a possible recession. In response, many began to close their carry trades linked to the Japanese yen.

Investors looking for a foothold
"Investors are trying to determine whether the market has bottomed out," said Robert Phipps, managing director at Per Stirling Capital Management in Austin, Texas. He said the market is in a period of high uncertainty, and participants are actively looking for signals for further action.

Fed Offers Confidence
The Federal Reserve said Thursday that slowing inflation is setting the stage for a possible rate cut in the future. However, they said any decisions would be based on current economic data, adding to the uncertainty.

Waiting for More Data
It's been a volatile week, with investors eagerly awaiting more data on inflation, corporate earnings, and presidential polls. These could be key factors in determining the direction of U.S. stocks and helping to smooth out the current market turbulence.

Market Volatility: U.S. Stocks on a Swing
The quiet months in U.S. stock markets have suddenly given way to bouts of volatility. Sharp price movements became a new reality for investors in August, driven by a string of worrisome economic data that coincided with the completion of a major deal financed by the Japanese yen. The deal triggered the biggest selloff in stocks this year. Despite recent recovery efforts, the S&P 500 remains 6% below its all-time high set last month, though it has rebounded from a dramatic plunge earlier in the week.

Recovery May Take Time
While the past few days have brought relief in the form of rising stocks, experts warn against expecting calm to return to markets anytime soon. Historical data on the Cboe Volatility Index, also known as Wall Street's "fear gauge," shows that periodic spikes in volatility can last for months. On Monday, the index posted its biggest one-day gain, indicating a high degree of anxiety among investors.

Wall Street's Fear Gauge: Echoes of Anxiety
The Cboe index measures demand for options, which provide protection against sharp market swings. When the index closes above 35, as it did on Monday, it takes about 170 trading sessions on average for the market to return to calmer levels. This is in line with the index's long-term median of 17.6, signaling significantly less anxiety among market participants.

New Test: Inflation Data
A new potential test for the market is on the horizon. On Wednesday, U.S. consumer price data will be released. If inflation shows too sharp a decline, it could fuel concerns that the Federal Reserve has made a mistake in leaving interest rates high for too long. This could lead to further market instability as investors worry that tight monetary policy will push the economy into recession.

U.S. stocks, which have been going through periods of ups and downs, are in a state of heightened anxiety, and there are no signs that this situation will change quickly. Investors continue to watch the new data closely, hoping for stability that so far seems out of reach.

Market ends week with minimal changes
Friday's trading ended with a slight increase in the main indices, which allowed them to compensate for some of the weekly losses. The Dow Jones Industrial Average added 51.05 points, which corresponds to an increase of 0.13%, and reached 39,497.54. The S&P 500 index rose by 24.85 points, or 0.47%, closing at 5,344.16. The Nasdaq Composite also showed positive dynamics, increasing by 85.28 points, or 0.51%, and ended trading at 16,745.30.

Weekly results: small losses against expectations
Despite the positive end of the week, the indicators for the week as a whole were in the negative. The S&P 500 fell 0.05%, the Dow Jones lost 0.6%, and the Nasdaq Composite slipped 0.2%. The current market situation reflects the nervousness of investors who are waiting for more signals from the Federal Reserve.

Waiting for the Fed's decision: What's next?
Michael James, managing director of equities at Wedbush Securities, notes that the market will remain in a state of heightened uncertainty until the next Federal Reserve meeting on September 17-18. The main focus of traders is on whether the Fed will decide to cut interest rates by 25 or 50 basis points. According to CME Group, the probability of a 50 basis point cut is estimated at 51%, while the probability of a softer 25 basis point cut is 49%.

Investors Await Inflation Data
In addition to the Fed's decisions, investors are eagerly awaiting consumer price and retail sales data for July, due out next week. These figures could provide a clearer picture of whether the U.S. economy will avoid a hard landing and provide direction for the market going forward.

Yearly Gains: Tech on the Rise
Despite recent wobbles, all three major indexes have continued to post strong gains since the start of 2024, helped by strong earnings from major tech companies and optimism around artificial intelligence. Stocks have shown strong gains early in the year, helping the market stay positive amid the overall turbulence.

Investors continue to watch the events unfold, awaiting more economic data and policy decisions to see where the market will head in the near future.

S&P 500 and Nasdaq Continue Strong Gains
The S&P 500 and Nasdaq have both posted impressive gains to end the year, up about 12% each since Dec. 31. The recent selloff in stocks has made tech stocks more affordable on a price-to-earnings basis, bringing them back into the spotlight.

The Day's Winners: Take-Two and Expedia
Friday's trading was marked by gains for individual stocks, particularly in the tech and entertainment sectors. Video game publisher Take-Two Interactive Software jumped 4.4% after forecasting higher net bookings in fiscal years 2026 and 2027. Meanwhile, online travel agency Expedia rose 10.2% after reporting quarterly earnings that beat analysts' expectations.

Trading Activity: What's Happening on the Stock Markets?
Trading volume on U.S. exchanges on Friday was 11.13 billion shares, slightly below the 20-day average of 12.59 billion. Advancing stocks outnumbered declining stocks on the New York Stock Exchange by a 1.39-to-1 ratio. However, the situation was slightly different on the Nasdaq, with decliners outnumbering gainers by a 1.14-to-1 ratio.

New Highs and Lows: Who's Leading the Way?
The S&P 500 posted 15 new 52-week highs and just three new lows, while the Nasdaq Composite was more mixed, with 52 new highs and 159 new lows. The data reflects continued uncertainty in the market despite the overall gains in the indices.

Market Expectations: Rate Cuts on the Horizon?
Futures markets are increasingly biased toward the Federal Reserve cutting its benchmark interest rate by 50 basis points at its next meeting in September. The probability of this scenario is estimated at 55%, a sharp change from the 5% chance recorded a month ago.

Economic Risks: A New Reality
Slower wage growth confirms that economic risks in the U.S. are becoming more balanced, especially against the backdrop of lower inflation and slower economic activity, said Oscar Munoz, chief U.S. macro strategist at TD Securities, emphasizing that the current economic environment requires special attention and caution from investors and analysts.

The market remains in a state of anticipation, and the coming months will show whether U.S. stocks can continue their rally or face new challenges.

Corporate Earnings Do Not Send Clear Signals to the Market
Corporate earnings for the second quarter did not have a significant impact on the market, leaving investors in uncertainty. Charles Lemonides, head of hedge fund ValueWorks LLC, said the results were neither strong nor weak enough to provide a clear direction for the market.

Solid Results: S&P 500 Meets Expectations
The S&P 500 reported results that were, on average, 4.1% above analysts' estimates. That's close to the long-term average of 4.2% above expectations, according to LSEG. While the results suggest stability, they haven't significantly changed market sentiment.

Earnings to Watch: Walmart, Home Depot, Nvidia
Investors will be focused on earnings next week from giants like Walmart and Home Depot, which could provide insight into how U.S. consumers are coping with the effects of a prolonged period of high interest rates. Also expected by the end of the month is earnings from chip giant Nvidia, whose shares have already risen an impressive 110% year-to-date despite recent market wobbles.
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Growth on One Side, Challenges on the Other: Unexpected Financial News from the U.S. and Asia

Sustainable Growth: Wall Street Ends Thursday with Confident Gains
Wall Street's major indexes ended Thursday's trading session with significant gains, with the Nasdaq jumping more than 2%. The gains were helped by fresh retail sales data for July, which confirmed the stability of consumer spending, dispelling fears of a possible recession in the U.S. economy.

Consumer Confidence
Nine of the S&P 500's 11 key sectors advanced, led by consumer staples and information technology.

July's retail sales report showed a 1.0% increase, up sharply from a downwardly revised 0.2% fall in June. The data helped ease concerns about a potential economic slowdown caused by last week's rise in unemployment.

Retail Giants on the Rise
Walmart, one of the world's largest retailers, surged 6.58% after raising its profit forecast for the second time this year, as U.S. consumers flocked to its stores in search of affordable essentials.

Rivals were also on the rise, with Target up 4.35% and Costco up 1.69%.

Unexpected Unemployment Decline
Separate data also helped boost investor sentiment. The number of new U.S. jobless claims unexpectedly fell last week, adding to the market's strength.

"We are seeing the wall of worry begin to crumble as sentiment improves and fundamentals are driving risk appetite," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Retail sales data beat expectations and inflation is in the low range, creating a favorable environment for equity prices to rise."

Treasury Bonds and Rates: Market Reacts to New Data
U.S. Treasury yields rose sharply after the release of new economic data. In particular, two-year and 10-year bonds showed gains, which is due to a change in trader sentiment. The probability of the Federal Reserve cutting rates by 25 basis points has now increased to 76.5%, compared to 65% before the release of the data.

Investors Await Powell Speech
Market participants are closely watching the latest economic data this week before Federal Reserve Chairman Jerome Powell delivers a key speech next week in Jackson Hole. That event could have a significant impact on the markets as investors await cues on the future of monetary policy.

Stock Markets Continue to Rise
The Dow Jones Industrial Average rose 554.67 points, or 1.39%, to close at 40,563.06. The S&P 500 gained 88.01 points, or 1.61%, to close at 5,543.22. The top gainer, the Nasdaq Composite, rose 2.34%, up 401.90 points to close at 17,594.50.

Individual Stocks Score
Cisco Systems posted a stunning 6.8% gain after announcing plans to grow first-quarter revenue above expectations and cut 7% of its global workforce.

Nike shares rose 5.07% after billionaire investor William Ackman announced a new stake, signaling renewed interest in the sportswear maker.

Ulta Beauty soared 11.17% after news that Warren Buffett's Berkshire Hathaway investment fund had acquired a significant stake in the beauty retailer.

Market Balance
Advancing stocks outnumbered declining stocks by a wide margin 3.22-to-1 on the New York Stock Exchange on Thursday. The same pattern was seen on the Nasdaq, where gainers outnumbered decliners by a ratio of 2.66-to-1.

New Record: S&P 500 and Nasdaq Riding a Wave
The S&P 500 posted 30 new 52-week highs and only one new low, while the Nasdaq Composite posted 76 new highs and 104 new lows. The numbers underscore a mixed market where companies continue to set new records despite continued volatility.

Global Trends: Europe and Asia in Focus
The situation in global markets is evolving rapidly. Past market turmoil caused by fears of a global economic downturn is quickly fading into the background. Recent data from the US has given investors confidence that the US economy is avoiding a deep crisis. This positive trend has helped calm markets and reduce fears of a possible recession.

Rates and forecasts: investors are lowering expectations
Investors are revising their expectations for further actions by the US Federal Reserve. Previously, the probability of the Fed cutting rates by 50 basis points was estimated at 55%, but now the market is showing only a 25% chance of such a significant reduction. This is due to the fact that the recent inflation report for July has allayed fears of drastic action by the Fed.

Japan's Nikkei and Yen Slip: Asian Markets Rise
In Asia, Japan's Nikkei Index stood out, jumping 3% on Friday to post its best weekly performance since April 2020. The index is on track to reclaim its record high despite recent wobbles.

The yen, on the other hand, remains under pressure, having fallen nearly 5% from a seven-month high last week.

It was last trading around 149 to the dollar. Despite the currency's apparent cheapness, volatility is forcing investors to rethink their yen exposure.

Expectations vs. Reality: What's Next?
With market sentiment shifting, investors remain cautious, although optimism about the US economy is keeping the tone positive. How the Fed will respond to the data remains a key question, and markets will be watching closely, especially as global economic uncertainty continues.

Futures and retail sales: what awaits European and US markets
Stock futures point to a positive opening in Europe and the US on Friday. Amid these expectations, investors are focused on UK retail sales data, which will be released in the morning hours in London. Forecasts suggest buyers will return to the market after an unexpected decline in June.

The Bank of England and rates: expectations for a cut
Economists and analysts continue to bet that the Bank of England may cut interest rates further this year. Such a decision is justified by easing inflation pressures and a deterioration in the economic outlook in the UK for the rest of 2024. Lower rates could support the economy, which faces new challenges.

Australia takes a different path: a bet on stability
While many central banks around the world are looking to ease monetary policy, Australia is going its own way. Reserve Bank of Australia Governor Michelle Bullock stressed on Friday that it is too early to talk about rate cuts. According to her, the country's core inflation remains too high and the bank continues to closely monitor potential risks to price increases.

Global Markets: Focus on Central Banks
The situation in global markets remains dynamic, with investors closely monitoring the actions of central banks. While the UK may be preparing for further rate cuts, Australia, by contrast, is maintaining a cautious approach. These divergent strategies reflect the different economic realities that countries face, and their possible impact on global financial markets will be in focus in the coming months.
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Hot forecast for EUR/USD on August 19, 2024

The EUR/USD pair ended the past week with a relatively rapid rise. This movement again indicates strong enthusiasm among traders for long positions in the euro.

In the 4-hour chart, the RSI technical indicator is moving in the upper range of 50/70, which suggests an increase in long positions.

Regarding the Alligator indicator in the same time frame, the moving average lines point upwards.

Expectations and Prospects
Stabilization of the price above 1.1050 is necessary to strengthen the current uptrend. In this scenario, moving to the local high of 2023 is possible. Otherwise, the movement within the 1.0950/1.1050 range will likely continue for some time.

The complex indicator analysis suggests an uptrend cycle in the short-term and intraday periods.
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Stocks Slow as Investors Brace for Big Fed, U.S. Labor News

Asian Stocks Fall on U.S. Data Expectations

Asian stocks fell on Wednesday, halting a strong rally in global stocks as they waited for important U.S. economic data. Bond yields and the dollar fell on expectations of interest rate cuts ahead of policymakers.

S&P 500 Ends Gain

The S&P 500 (.SPX), which had been on track for eight straight sessions of gains, was down 0.2% overnight. MSCI's broad index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) also lost 0.5%. Meanwhile, U.S. and European index futures showed modest gains, up around 0.2%.

Hang Seng and JD.com under pressure

Hong Kong's Hang Seng (.HSI) fell 1%, helped by a sharp 10% drop in JD.com (9618.HK) shares after its largest shareholder, Walmart, decided to sell a significant portion of its stake.

Japan's Nikkei struggles with resistance

Japan's Nikkei (.N225) fell 1% at the open, hitting resistance at 38,000 after recently rebounding from its early August decline. However, the index had partially recovered by midday, paring its losses to 0.3%.

Experts predict possible changes

The recent sell-off in stocks has bottomed out, with recession fears replaced by hopes for a softer slowdown, according to Bank of Singapore analyst Mo Siong Sim. However, he notes that markets need confirmation before they can stabilize, and that confirmation should come from new data.

US data on the horizon

Investors will continue to focus on preliminary US employment data due out later on Wednesday. The data is expected to be revised downwards, which could put pressure on interest rates. The Federal Reserve minutes are also expected to be released, which analysts believe will confirm the regulator's appetite for easing.

Index expectations and their impact on global markets

Investors will be closely watching the publication of both US and global purchasing managers' indices on Thursday. These data promise to have a significant impact on markets, shaping future expectations for economic growth and monetary policy.

Dollar Loses Ground as Gold and Yen Rise

The dollar's weakness has served as a catalyst for a sharp rise in gold prices, which have reached new records. Against this backdrop, the Japanese yen has strengthened to 145.67 per dollar, up 1.6% on the week and an 11% rebound from its 38-year low last month.

The Euro and Rate Cut Prospects

The euro has been on a strong run, up nearly 3% since early August. At $1.1132 in Asian trading, the euro hit its highest since December last year, indicating an attempt to break key chart levels.

Interest rate futures point to a strong chance of the Federal Reserve cutting its benchmark rate by 25 basis points next month, with a one-third chance of a 50 basis point cut. Investors are pricing in a rate cut of nearly 100 basis points this year and expecting a similar cut next year.

Dollar under pressure: further weakness likely

Rabobank strategist Jane Foley says the dollar's recent weakness is likely due to rising expectations for easing from the Federal Reserve. However, she warns that these hopes may be overdone, with the risk of a short-term decline in EUR/USD below $1.10.

A look ahead to upcoming speeches and regional currencies

Investors are also looking ahead to Fed Chairman Jerome Powell's speech at the Jackson Hole Symposium on Friday, which could provide further clues as to where the Fed is headed. Meanwhile, the Australian and New Zealand dollars have shown solid gains, reaching $0.6747 and $0.6157 respectively, reflecting their positive momentum amid global economic developments.

US Bonds and Commodities: Strong Positions

Equity markets continued to be supported by bonds, with the US 10-year Treasury yield falling to 3.81% and the two-year yield holding steady at 3.99%. These figures suggest cautious optimism among investors awaiting economic data.

Commodities Resilience and China's Response

Commodities prices stabilised. Brent crude futures settled at $77.12 a barrel, indicating a recovery from recent wobbles. Iron ore in the Dalian market also hit a local bottom, helped by reports that China plans to allow local governments to buy unsold homes. The move is aimed at supporting the housing market, an important signal for the global steel market, where China plays a key role.

Impact of Chinese construction on global markets

Steel markets are sensitive to any developments in the construction industry in China, the world's largest consumer of the metal. Following the news from China, shares of major miners such as BHP, Rio Tinto and Fortescue Metals were stable in Australian markets, reflecting investor confidence in a recovery in demand.

Gold holds close to records

Gold prices remain close to the record highs set on Tuesday, hovering around $2,516 an ounce. The precious metal remains an attractive asset for investors amid global economic uncertainty.

Asia's central banks: decisions awaited

In emerging markets, attention is focused on central bank meetings in Thailand and Indonesia on Wednesday. Although neither country is expected to cut rates before the US Federal Reserve, their decisions could have an impact on regional markets.

Chinese Stocks Under Pressure After Walmart News

The yen continued to strengthen, reaching 145.5 per dollar, which, along with weak sentiment in Japanese stock markets, put pressure on stocks. At the same time, news that Walmart plans to sell its stake in JD.com sent shares of the Chinese online retailer sharply lower in Hong Kong, despite the company's recent upbeat earnings report.

Obama Back on the Frontlines: Endorsing Kamala Harris

Former US President Barack Obama returned to the national political stage on Tuesday evening to throw his support behind Kamala Harris in her tight presidential race against Republican Donald Trump. The move underscores the importance of the election and Obama's determination to ensure a Democratic victory.

Awaiting Data: The Importance of Fed Minutes

Investors are eagerly awaiting the release of Federal Reserve minutes and revisions to US labor market data on Wednesday. According to Goldman Sachs, the number of revised payrolls could fall by 600,000 to 1 million, which could create a false impression of weakness in the labor market. This data will be key to further analysis of the economic situation in the country.

Labor market under close scrutiny

Of particular importance is the upcoming US labor report, which will be released on September 6. It will be closely watched, since the situation in the labor market is now the main focus of economic policy, against the backdrop of falling inflation. It is this report that will be decisive in determining the further actions of the Fed and their impact on financial markets.

Rate markets are pricing in a decline: the dollar is under pressure

Interest rate futures are fully priced in the Fed's 25 basis point rate cut in September, with about a 30% chance of a deeper cut of 50 basis points. These expectations are putting pressure on the dollar, which is showing weakness in almost all areas.

Gold and the Euro: New Horizons

Gold continues to set records, surpassing $2,500 an ounce, reflecting its status as a safe haven in uncertain times. Meanwhile, the euro has reached $1.11, unfamiliar territory for the currency and a sign of new trends in the currency markets.

Risks on the Horizon: The Importance of Powell's Speech

However, not all analysts share the market's optimism. There is a risk that the labor market data could be stronger than expected, or that Fed Chairman Jerome Powell, speaking in Jackson Hole on Friday, will not show enough flexibility in his rhetoric. These factors could significantly change the mood in financial markets and force investors to revise their expectations.

Fear and Greed Index: From Panic to Stability

The CNN Fear and Greed Index, which measures sentiment in the stock, options and credit markets, has risen from extreme anxiety to neutral in a short period of time. This recovery suggests that investors are slowly starting to calm down after the recent turmoil.

Investors on Hold: Confirmation of the Favorable Outlook

Despite the improved sentiment, market participants remain cautious and await new economic data that may confirm or refute current forecasts. Investors are seeking clarity before diving back into risky assets, preferring to first make sure that positive trends are sustainable.

This period of waiting and analysis highlights not only the importance of data, but also the instability that still hangs over the markets, requiring caution and sober calculations from financial players.
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Holding their breath: Wall Street awaits Fed decision, other big global events

Investor expectations: Stocks frozen, await Fed decision
Global stock markets paused their gains on Wednesday, stabilizing after a long rally that took them to recent record highs. Investors are awaiting confirmation that the US Federal Reserve will decide to cut interest rates, in line with their expectations.

The minutes of the Fed's July 30-31 meeting show that officials are leaning toward lowering rates at the upcoming September meeting. Fed Chairman Jerome Powell is expected to reiterate the central bank's commitment to easing policy at its annual conference in Jackson Hole, Wyoming, on Friday. The move comes after the bank successfully quelled the worst surge in inflation in 40 years.

Oil and Gold: Contrasting Trends
Oil prices fell while gold held its high, hovering near the record highs it hit on Tuesday, as the dollar weakened amid expectations of interest rate cuts.

Wall Street and Global Markets: Steady Gains
On Wall Street, the indices showed modest gains, with the Dow Jones Industrial Average (.DJI) up 0.13% to 40,889, the S&P 500 (.SPX) up 0.42% to 5,620, and the Nasdaq Composite (.IXIC) up 0.57% to 17,918.

The MSCI All Country (.MIWD00000PUS) also showed positive dynamics, adding 0.4% and almost reaching its July record. Since the beginning of the year, it has gained an impressive 13.9%.

European Markets: New Peak on the Horizon
The STOXX (.STOXX) index of 600 leading companies in Europe rose 0.3%, moving closer to its all-time high set on June 7.

Market Volatility: Investor Sentiment Under Pressure
World stocks have been volatile this month, as investors worried about U.S. employment data, which has heightened fears of a possible recession in the world's largest economy.

However, the pessimism has since given way to hopes for a soft landing, which investors see as an opportunity thanks to the expected cut in U.S. interest rates, which could begin as early as September.

Labor Market: Key Factor for the Fed
The U.S. Labor Department reported on Wednesday that job creation was significantly lower than initially expected for the period through March. The news has heightened the Federal Reserve's concerns about the health of the labor market, which in turn affects monetary policy going forward.

"The labor report confirms the futures market's assessment that the Fed is likely to cut rates at its September 18 meeting," Quincy Crosby, chief global strategist at LPL Financial, said in an email.

Futures and Bonds: Rate Cut Expectations
Futures markets have already priced in the likelihood of a 25 basis point rate cut next month, as well as a one-in-three chance of a 50 basis point cut. A 100 basis point cut is expected this year, with another 100 basis points expected next year.

U.S. Treasury yields also fell. The benchmark 10-year note shed 2.3 basis points to 3.795%, down from 3.818% late last night. The yield on two-year bonds, which is more sensitive to interest rate expectations, fell by 6.9 basis points, reaching 3.9305% from 4% late Tuesday.

Waiting for a decision: markets frozen
Thus, global markets continue to wait. Investors are focused on the upcoming Fed meeting in September, where the further course of monetary policy will be decided. Any new data on the state of the US economy could significantly affect this course, and therefore, global financial markets.

No Recession Scenario: The Fed's New Approach
Global markets find themselves in a unique situation where the prospect of a significant rate cut is not accompanied by recession risks. This is in stark contrast to five of the last seven rate-cutting cycles, when lower borrowing costs were accompanied by an economic slowdown, according to Ross Yarrow, managing director of U.S. equities at investment bank Baird.

"If we can get to a point where the Fed cuts rates, inflation comes down, and employment stays high, that would be a very positive outcome," Yarrow said. He added that such an environment could create a positive outlook for equity markets to continue to rally.

Asian Markets: Mixed Performance
Asian markets were less optimistic. The MSCI Asia-Pacific Ex-Japan Index (.MIAPJ0000PUS) fell 0.3%. In Hong Kong, the Hang Seng Index (.HSI) fell 0.7%, with JD.com (9618.HK) contributing significantly to the decline, falling 8.7% after Walmart (WMT.N) decided to sell its large stake in the company.

Japan's Nikkei (.N225) also fell 0.3%, pausing its recovery at 38,000, which had become resistance after the August collapse.

FX and Gold: Dollar Under Pressure
The weaker dollar helped gold, which neared record highs, while strengthening the yen, which has returned to 145.135 per dollar from a multi-year low hit last month.

The euro also strengthened, gaining about 3% in August to reach $1.115, its highest since December last year.

Gold and Oil: Mixed Movements
Gold prices continued to hover around $2,510 per ounce, remaining close to the record highs reached on Tuesday. At the same time, oil prices went down again: US crude oil fell by 1.69% to $71.93 per barrel, while Brent fell by 1.49% to $76.05 per barrel.

Looking Ahead: What's Next?
Overall, markets remain awaiting further actions by the Fed and their impact on the global economy. Whether the US economy can avoid a recession amid rate cuts remains an open question, but current investor sentiment is increasingly leaning towards an optimistic scenario.

Retail Sector on the Rise: JD Sports' Success
The retail sector showed strong growth, leading the leaderboard amid a significant increase in JD Sports (JD.L) shares. The UK sportswear retailer rose 5.3% after reporting a strong improvement in core sales in the second quarter, spurring investors.

Energy under pressure as oil prices fall further
The energy sector was among the laggards, falling 0.6% as oil prices fell for a fifth straight session. Investors are concerned about a possible slowdown in global oil demand, putting pressure on companies in the sector.

Key data ahead: PMIs and consumer confidence
Markets are focused on the upcoming flash purchasing managers' index (PMI) data for France, Germany, the UK and the eurozone, due between 07:15 and 08:30 GMT. These figures will help to gauge the current state of the region's economies.

Eurozone consumer confidence data is also due out today at 14:00 GMT. Later in the day, US PMI and initial jobless claims data will be released, which could have a significant impact on the market.

Key Market Moves: Aegon and Deutsche Bank
Among individual stocks, Aegon (AEGN.AS) was a notable loser, falling 4% after the Dutch insurer reported a decline in its key capital generation figure for the first half of the year. This caused concern among investors and led to a sell-off.

Meanwhile, Deutsche Bank (DBKGn.DE) shares rose 2.5% after the bank reached a settlement with more than half of the plaintiffs who had accused it of underpayment. The progress was welcomed by the market, which was reflected in the bank's share price rising.

Looking Ahead: Key Data Expectations
Investors continue to closely monitor upcoming economic data, which could be key indicators for future market developments. Particular attention will be paid to the PMI and consumer confidence indicators, which will provide an indication of the current state of the European economy and may influence sentiment in other regions.
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Blackwell Delay, Stock Drop: What's Happening at Nvidia?

Nvidia: Investor Expectations Were Not Met

Nvidia's (NVDA.O) quarterly guidance on Wednesday disappointed investors who had been counting on a continued run for the company, a symbol of success in generative AI. While Nvidia delivered impressive results, it was not enough to meet lofty market expectations.

The company's shares fell 6% in after-hours trading, dragging down other chipmakers. The report was a moment of truth for the tech sector, where even Nvidia's strong results have drawn mixed reviews. Despite impressive financials, including strong growth and profits, investors were left scratching their heads.

Strategy in Question

Carson Group chief market strategist Ryan Detrick noted that the problem was the scale of expectations. "The bit size this time was much smaller than we've seen in the past," he explained. Even the company's updated guidance failed to excite investors in the same way it had in previous quarters, he said. "Nvidia remains a standout with 122% revenue growth, but it appears the bar was set too high this earnings season," he added.

Guidance Underperforms

While Nvidia's revenue and gross profit guidance for the current quarter were close to analyst expectations, they failed to continue the trend of recent quarters in which the company has consistently beaten Wall Street estimates. This eclipsed even the impressive figures for revenue and adjusted profit in the second quarter, as well as the announcement of a $50 billion share buyback.

Nvidia has shown more than 200% revenue growth over the past three quarters, but each success puts more pressure on the company. As Wall Street continues to raise its targets, Nvidia now faces a challenge that is becoming increasingly difficult to overcome.

Nvidia is betting on Blackwell

Nvidia announced that it has begun shipping test samples of its new chips, codenamed Blackwell, to partners and customers. These chips have been finalized and are ready for market. The company expects their sales to bring in several billion dollars in the fourth quarter, which should support the current financial results.

However, even such ambitious plans could not save the market from a wave of sell-offs. Shares of chipmakers such as Advanced Micro Devices (AMD.O) and Broadcom (AVGO.O) fell almost 4%. Asian giants SK Hynix and Samsung also felt the impact, falling 4.5% and 2.8%, respectively, in Thursday morning trading.

Market on Edge: What Nvidia's Decline Means

Nvidia's fate largely determines the dynamics of the entire tech sector. The company's shares have soared more than 150% since the start of the year, adding $1.82 trillion to its market value and pushing the S&P 500 to new all-time highs. However, if the stock continues to slide after the close of trading on Wednesday, the company could wipe out as much as $175 billion in market value.

The outlook has raised concerns among investors about potential ROI issues in generative AI, with some beginning to question whether tech giants can continue to invest so heavily in the data centers needed to support AI without risking their bottom lines. These concerns have already begun to reverberate through the market, dampening the recent AI-related gains in stocks.

AI Giants: What's Next for Them?

Nvidia's biggest customers, such as Microsoft, Alphabet, Amazon, and Meta Platforms (a banned organization in Russia), are expected to spend more than $200 billion on capital expenditures in 2024. Much of that money is being spent on building AI infrastructure.

But even those investment plans haven't kept the tech giants' stocks from falling. They were down less than 1% in over-the-counter trading on Wednesday, reflecting growing tensions in the market. Whether Nvidia and other tech leaders can live up to investors' lofty expectations remains an open question.

Investors are starting to worry about the future of AI

The once-unshakable generative AI market is starting to raise more and more questions among investors. "The entire market is now kind of tied to Nvidia's success, and that's becoming increasingly worrisome," eMarketer analyst Jacob Borne said. It seems like any swing in Nvidia's performance could have a significant impact on the overall perception of the AI sector.

Regulators are ramping up the pressure

Nvidia is also facing increasing pressure from regulators. In its latest quarterly report, the company reported requests for information from regulators in the US and South Korea. The requests cover various aspects of Nvidia's business, including GPU sales, supply chain allocation, base models, and partnerships and investments in AI companies.

Previously, the company had only mentioned similar requests from regulators in the EU, UK, and China. In this context, it is particularly noteworthy that the French antitrust authority is preparing to charge Nvidia with alleged anti-competitive practices. US media have also reported that Nvidia is being investigated by US regulators for possible attempts by the company to tie its networking equipment to popular AI chips.

Profit outlook: high, but under pressure

Despite the challenges, Nvidia continues to deliver strong financial results. In the third quarter, the company expects adjusted gross margins of 75%, with possible deviations of 50 basis points. For comparison, analysts predict a slightly higher figure of 75.5%, which, however, is not much different from the second quarter, where Nvidia posted a profit of 75.7%.

Even taking these figures into account, Nvidia's gross margins remain significantly higher than those of its competitors. In particular, AMD showed an adjusted profit of 53% in the second quarter. The gap is due to the high prices of Nvidia's chips, which continue to lead in speed and performance. However, the question remains whether the company's strong performance can be sustained amid mounting regulatory pressure and growing investor anxiety.

Nvidia's Outlook: Falls short of lofty expectations

Nvidia is forecasting revenue of $32.5 billion for the third quarter, with a 2% margin of error, slightly above the average analyst estimate of $31.77 billion, according to LSEG. The company posted revenue of $30.04 billion in the second quarter, significantly beating expectations of $28.70 billion. Adjusted earnings per share were 68 cents, also above the 64 cents expected.

Impressive Growth in the Data Center Segment

One of the keys to Nvidia's success is its rapid growth in data center sales. In the second quarter, this segment brought in $26.3 billion for the company, up 154% year-over-year and well above the $25.15 billion forecast. Compared to the first quarter, revenue in this segment increased by 16%.

In addition, Nvidia continues to generate significant revenue from the sale of chips to gaming and automotive companies, which also supports the company's overall financial results.

The market reacts to forecasts

Despite such significant gains, shares of some other companies, such as Broadcom and Advanced Micro Devices, fell by about 2%, while Microsoft and Amazon fell by almost 1%. This is due to the general tension in the market caused by Nvidia's forecasts, which turned out to be less ambitious than investors expected.

If the downward trend in Nvidia shares that began on Wednesday continues on Thursday, it could be a serious blow to the company, although not as severe as the 11% drop recorded earlier this year.

Demand for AI Chips: High Expectations and Harsh Reality

Relentless demand for AI chips has allowed Nvidia to beat analyst estimates multiple times in previous quarters, driving investor expectations to new heights. However, today's more subdued forecasts have eclipsed even the company's impressive second-quarter revenue growth and strong adjusted profit, not to mention its massive $50 billion share buyback.

The question remains: Can Nvidia continue to meet rising market expectations, or will its financials face greater challenges in the future?

Over-Expectations: Nvidia Fails to Meet Market

Despite its impressive financial performance, Nvidia is facing a situation where even good results fail to meet investors' wildly high expectations. "They beat expectations, but when expectations are that high, it's hard to meet market expectations," says JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. His words reflect the sentiment of many market participants who expected Nvidia to deliver on its promise.

Fall Volatility: Market Ahead of Unstable Season

A weak reaction to Nvidia's earnings report could set the tone for market sentiment heading into what has historically been a volatile fall. According to CFRA, the S&P 500 has fallen an average of 0.8% in September since World War II, making it its worst month of the year. The stats are adding to investor anxiety, especially in the context of the current market volatility.

Investors will also be focused on next week's U.S. employment report, which could shed light on whether the weakness in the labor market that rocked stock markets in early August has been overcome.
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USD/JPY: Analysis and Forecast

During the Asian session today, following the release of the CPI (Consumer Price Index) data from Tokyo, the Japanese yen attempted to regain its recent gains against the U.S. dollar. The rise in inflation in Tokyo strengthens the Bank of Japan's aggressive monetary policy stance, which supports the yen and pressures the USD/JPY pair downward. However, during the European session, the dollar began to reclaim its strength.

The downward potential for the USD/JPY pair is limited as the U.S. dollar, following yesterday's stronger-than-expected economic data, is trying to maintain its recent gains. However, dovish comments from the Federal Reserve could restrain the further growth of the U.S. dollar.

Today, traders should focus on the U.S. PCE (Personal Consumption Expenditures) index for insights into the future direction of U.S. interest rates and potential trading opportunities.

From a technical standpoint, the pair is above the downward trendline, indicating a weakening of the bearish bias. However, the RSI (14-day Relative Strength Index) remains above 30, confirming the bearish trend.

Additionally, the USD/JPY pair may test the downward trendline at the 144.50 level.

A break below this level could see the pair move toward the seven-month low recorded on August 5, with further support at 140.25.

Regarding resistance, if the pair consolidates above the 145.00 level, it could open the path to 146.00, and a move into the 146.500 supply zone could increase the likelihood of a bullish trend.
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Hot forecast for EUR/USD on September 9, 2024

It seems almost unbelievable, but the United States Department of Labor reported a decrease in the unemployment rate from 4.3% to 4.2%. This is even though employment growth over recent months should have led to an increase in unemployment, which had been occurring consistently for several months. Considering the population size, growth rate, and age demographics, employment in the United States should increase by just over 200,000 jobs per month to maintain a stable unemployment rate. However, it increased by only 1,717,000 jobs over the last twelve months, or approximately 143,000 jobs monthly. The United States Department of Labor also publishes data on the number of new jobs created outside of agriculture. This figure indicates the maximum potential for employment growth. According to the latest data, 142,000 jobs were created. Over the same previous twelve months, 2,358,000 jobs were created, or about 196,000 per month, which is also not enough. Thus, even if we assume that the employment data is not entirely accurate, there still aren't enough new jobs to stabilize the labor market.

Moreover, only 673,000 new jobs were created in the last five months, or about 135,000 monthly. With such figures, unemployment should only rise, as observed in previous months. But now, inexplicably, it has decreased.

Nonetheless, despite apparent inconsistencies and troubling questions, the dollar somewhat strengthened its positions. Considering the ongoing election campaign and the fact that the majority of American media clearly support the Democrats, one should not expect further development of this issue. On the contrary, leading media outlets will point to the decrease in the unemployment rate without any questions or the like, citing it as an argument in favor of Kamala Harris. Thus, the oddities with the labor market data will quickly be forgotten, at least in the media space, thereby creating a basis for strengthening the dollar.

The EUR/USD pair showed significant volatility towards the end of last week. The lever for speculators has been the information and news flow, particularly the U.S. Department of Labor's report. As a result, the quote initially jumped above the 1.1150 mark, then plummeted below 1.1100.

In the 4-hour chart, the RSI technical indicator has lost strength due to high volatility. However, it is worth noting that towards the close of trading, the indicator stabilized below the average level of 50, indicating an increase in the volume of short positions on the euro.

Regarding the Alligator indicator in the same time frame, the moving average lines are intertwined with each other. In this case, the indicator is in confusion.

Expectations and Prospects
Based on the inertial-speculative cycle, the movement towards the upper area of the psychological level of 1.1000/1.1050 is not ruled out. This price area serves as a support for sellers in the market. However, the speculation factor, which will continue this week, should be noted. Thus, price movements can quickly change directions.

The complex indicator analysis points to a downward cycle in the short-term and intraday periods. Indicators point to an upward trend in the medium term.
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Hot Forecast for EUR/USD on September 12, 2024

The slowdown in inflation in the United States turned out to be more significant than even the most optimistic forecasts, yet the situation in the currency market remained unchanged. Almost immediately after it was revealed that the consumer price growth rate had slowed from 2.9% to 2.5%, major media outlets began focusing on core inflation, particularly in its monthly measure rather than the annual one. Core inflation increased by 0.3%. Although the U.S. central bank never mentions this indicator and is thus largely insignificant, the media started claiming that the Federal Reserve will slowly lower interest rates because of core inflation. As a result, the media frenzy somewhat balanced out the actual data, leaving the market in its previous position.

Today, all eyes are on the European Central Bank's board meeting. The market has long been prepared for the refinancing rate to be lowered from 4.25% to 4.00%, so this fact will not affect investor sentiment. Everything will depend on the statements ECB President Christine Lagarde may make during the subsequent press conference, particularly regarding the central bank's future actions. The market is concerned only with the pace of monetary policy easing at least until the end of this year. If the head of the ECB announces even one more rate cut, it will substantially boost the U.S. dollar, allowing it to continue strengthening its position.

The EUR/USD pair reached the 1.1000 level during high volatility, but no significant changes occurred. The volume of short positions on the euro decreased again, leading to stagnation within the upper deviation of the psychological range of 1.1000/1.1050.

In the four-hour chart, the RSI technical indicator is moving in the lower 30/50 area, indicating bearish sentiment among market participants.

Regarding the Alligator indicator in the same time frame, the moving average lines point downwards, aligning with the price movement's direction.

Expectations and Prospects
For the next stage of decline, the price needs to stabilize below the 1.1000 mark. However, this will only shift the support level locally to the lower region of the psychological level. Until then, traders are likely to consider a scenario of stagnation or a price rebound from the psychological level. A significant increase in long positions on the euro is possible if the price stabilizes above the 1.1050 mark.

The complex indicator analysis points to a price rebound in the short term, while indicators focused on a downward cycle in the intraday period.
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