21/08/2024 Daily Reports
Market momentum hit a snag as Asian shares fell on Wednesday, interrupting the S&P 500’s rally just before it could match a 20-year winning streak.
Investors are back to assessing recession risks and U.S. political dynamics, with Barack Obama re-emerging to support Kamala Harris in her presidential bid against Donald Trump.
Key data points loom large, with Fed minutes and labor data revisions due later today. Goldman Sachs expects a significant downward revision in U.S. job figures, though they caution it might exaggerate labor market weakness. With a 25 basis point rate cut already priced in for September, much depends on upcoming labor reports and Fed Chair Jerome Powell’s tone at Jackson Hole.
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Asian stocks ended a three-day winning streak, reflecting Wall Street’s pause as investors anticipate US payrolls data and Federal Reserve minutes for clues on potential interest rate cuts.
Chinese shares in Hong Kong led the decline, dropping as much as 2%, driven by concerns over the country’s consumption outlook and disappointing earnings from key tech players.
The dollar steadied after three days of losses, while investors remained cautious ahead of Fed Chair Jerome Powell’s Jackson Hole speech.
In other markets, Japanese stocks fell despite positive export data, and bond yields in Australia dropped amid expectations of steady interest rates in Indonesia and Thailand.
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Gold rose toward $2,520 per ounce on Wednesday, nearing a record high as investors anticipated the latest FOMC minutes and Fed Chair Powell’s upcoming speech at the Jackson Hole Symposium. These events are expected to provide crucial insights into the Federal Reserve’s monetary policy, with markets currently pricing in 100 basis points of rate cuts by the Fed this year due to cooling inflation and a weakening labor market.
However, there is uncertainty about whether the Fed will implement a 25 or 50 basis point cut in September, especially after strong retail sales data in July. Geopolitical tensions and significant global ETF inflows are also contributing to the bullish momentum in gold, reinforcing its appeal as a safe-haven asset.
