Market News by OnEquity

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Market Highlights for the Week: Powell, Dems, PM
The future path of U.S. interest rates may become clearer this week when Federal Reserve Chairman Jerome Powell delivers his speech at the central bank's annual retreat in Jackson Hole. Before then, the Democratic National Convention will begin, global PMI data will shed light on economic strength and energy markets are likely to remain volatile amid heightened geopolitical tensions. Here's a look at what will happen in the markets this week.

Powell at Jackson Hole

On Friday at 10:00 a.m. ET (14:00 GMT), Federal Reserve Chairman Jerome Powell will deliver the keynote address at the central bank's annual economic symposium in Jackson Hole, Wyoming.

Markets will be watching closely for indications of the pace and timing of rate cuts in the months ahead. Expectations of a soft landing for the economy are buoying U.S. stock markets again, as recent positive data have eased worries about the likelihood of a recession, after concerns over the pace of growth triggered a brutal sell-off earlier this month.

Most market participants believe the Fed will cut rates at its next meeting in September, with the biggest debate centering on the size of the cut: a quarter or half a percentage point.

US data

The Fed will release the minutes from its July meeting on Wednesday. Last month, the Fed kept the door open to a rate cut in September, with Powell acknowledging progress on inflation. Also on Wednesday, the Bureau of Labor Statistics will release a preliminary forecast of the benchmark revision to the March 2024 nonfarm payrolls levels.

On Thursday, the weekly report on initial jobless claims will be released. Several Fed officials are also scheduled to make appearances throughout the week, including Fed Governor Christopher Waller, Atlanta Fed President Raphael Bostic, and Fed Vice Chairman for Supervision Michael Barr.

The Democratic Convention

The U.S. presidential contest heats up as Democrats try to boost the candidacy of Vice President Kamala Harris at the party's convention in Chicago, which begins on Monday. During the four-day event, prominent Democratic Party figures are expected to give speeches aimed at solidifying support for Harris.

Harris, who entered the race after President Joe Biden's decision to drop out of the campaign, has energized the Democratic base and has closed the gap on Republican candidate Donald Trump in certain opinion polls. Harris has even outperformed Trump in several betting markets ahead of the November 5 election.

As the race heats up, investors are eager to know what Harris's policy positions are. The candidate has emphasized her commitment to preserving the Fed's independence, a position that clashes head-on with the views of her Republican rival, former President Trump.

PMI data

Purchasing managers' indices (PMIs) provide a real-time snapshot of economic activity and, with most of them released on Thursday, will provide important insights into global growth prospects. The July PMIs point to an economic slowdown coupled with persistent inflation, highlighting the dilemma facing central banks.

U.S. manufacturing activity slowed, and German figures were unexpectedly gloomy, pointing to a contraction in the eurozone's largest economy.

However, manufacturing input prices in advanced economies hit 18-month highs.

Inflation will determine the pace and intensity of future rate cuts. A reiteration of the disappointing July PMI data could mean that monetary easing will come more slowly than markets would like.

Energy markets

Global energy markets have been volatile amid a combination of risk factors, with no immediate relief in sight. Growing concerns about the escalating conflict in the Middle East have pushed international crude oil prices above $80 per barrel, reflecting fears of potential supply disruptions in the region. At the same time, uncertainty about oil demand, especially in China, is preventing oil prices from rising further.

Wholesale gas prices in Europe have also experienced notable fluctuations, exacerbated by the possible disruption of Russian gas supplies via Ukraine. Ongoing conflicts near the Russian city of Sudzha, a key transit point for gas flowing to Ukraine, have raised fears of a possible disruption of gas deliveries before a five-year deal with Gazprom expires.

 

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Bitcoin Accumulation Initiatives in US Politics
At the recent Bitcoin2024 event, two U.S. political figures proposed significant initiatives regarding the accumulation of Bitcoin (BTC) as a reserve asset by the U.S. government. Robert F. Kennedy Jr., an independent presidential hopeful, stated that if elected, his administration plans to stockpile four million Bitcoin as a strategic reserve asset. Simultaneously, Senator Cynthia Lummis unveiled a bill that would prompt the government to purchase one million BTC, which is about 5% of the total Bitcoin supply, over a five-year period.

Raoul Pal, a former Goldman Sachs executive and renowned macroeconomics expert, expressed his concerns during a conversation with Anthony Scaramucci, founder of Skybridge Capital. Pal highlighted the potential conflicts and risks of the U.S. government becoming one of the largest holders of Bitcoin. While a new buyer of such magnitude could initially boost Bitcoin's price, Pal expressed fears of possible market manipulations.

Consequences of Government Involvement in Bitcoin

Pal argues that while the cryptocurrency market could benefit from additional demand, the prospect of the U.S. government positioning itself as a major buyer of Bitcoin is concerning. In his view, Bitcoin was conceived to minimize the government's role in controlling money, and such a government takeover would run counter to the fundamental principles of decentralization and financial autonomy that cryptocurrency promotes.

Possible Consequences of Government Manipulation

The expert warned that if the government manages the Bitcoin market, it could, for example, sell large amounts to influence the price or buy more to keep prices high, similar to how it manages interest rates in the conventional economy. This ability to influence could undermine the independence that Bitcoin aims to offer in the financial world.

The debate raises a major dilemma: while the accumulation of Bitcoin by the U.S. government could further validate the cryptocurrency as a legitimate investment asset, it could also lead to control and manipulation, contrary to the ideals of free markets and autonomy that characterize Bitcoin. These concerns highlight the delicate trade-off between the official adoption of cryptocurrencies and the preservation of their decentralized spirit.

 

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Dollar declines on rate cut expectations; euro near yearly highs
The U.S. dollar declined on Tuesday, approaching seven-month lows, amid expectations that the Federal Reserve will cut interest rates in September.

Dollar weakens on optimism ahead of Fed rate cut

The U.S. dollar has fallen by approximately more than 2% over the past month, on par with U.S. Treasury yields, amid growing optimism that the Federal Reserve will cut interest rates next month.

Fed Chairman Jerome Powell will have the opportunity to speak at the Jackson Hole symposium this Friday and traders are looking for more signals as to when and by how much the central bank will cut rates.

The Federal Reserve has held its benchmark overnight rate at the current 5.25%-5.50% range since last July, and traders have been compellingly discounting a 25 basis point rate cut in September, with a 24.5% probability of a 50 basis point move.

EUR/USD hits its highest level so far this year

Turning to Europe, EUR/USD traded flat at 1.1086, with dollar weakness driving the euro to record and touch its highest level so far this year.

The euro is up about 2% this month and is on track for its best monthly performance since November.

Europe's consumer price index remained little changed in July, rising 2.6% on a yearly basis, which serves to confirm that inflation pressures remain subdued.

GBP/USD was up 0.2% at 1.3009, reaching its highest level in a month, due to weakness in the dollar.

Market traders are currently divided on the likelihood of the Bank of England lowering rates again in a month's time, after a tight rate cut campaign earlier this month.

The yen is unchanged ahead of Ueda's speech.

In Asia, USD/JPY fell to 146.35, close to last session's near two-week high, but well off the seven-month low of 141.67 reached at the beginning of August.

Market investors' attention will be focused on Bank of Japan Governor Kazuo Ueda when he testifies in front of Parliament next Friday. Ueda is expected to speak on the bank's decision last month to raise rates and attention will focus on whether he maintains his recent hawkish tone.

USD/CNY traded flat at 7.1395, with slight support from the People's Bank of China maintaining its benchmark lending rate preference as expected.

The August hold was due to the People's Bank of China unexpectedly cutting the benchmark lending rate in July in an attempt to stimulate economic development.

 

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U.S. stock markets stabilize with Jackson Hole and DNC top of mind
U.S. stock indexes were trading steady on Tuesday, consolidating after another session of positive numbers on Wall Street, with attention focused on the Jackson Hole Symposium for further signs.

Wall Street's benchmark indices were able to close higher on Monday, with the S&P 500 up nearly 1% and the Nasdaq Composite up 1.4%. Both indices were able to post their eighth straight session in positive territory, the first for the S&P 500 since November 2023, and the most positive streak for the Nasdaq since December of last year. The Dow Jones Industrials gained 0.6%.

Jackson Hole awaits signals on rate cuts

The Jackson Hole Symposium, a meeting of top central bank leaders and Indian finance ministers later this week, with a speech by Federal Reserve Chairman Jerome Powell on Friday.

Powell's speech will be closely watched amid growing conviction thinking that the central bank is getting ready to cut interest rates by about 25 basis points next month, as recent economic readings pointed to some cooling of inflation.

Powell could signal the possibility of a 50 basis point cut, according to analysts at Evercore, although they do not expect the Fed chairman to speak explicitly on what average he plans to start cutting rates.

Any comments regarding a possible recession will also be in focus, particularly if Powell still envisions a soft landing for the U.S. economy.

DNC in the spotlight in the race for Chair 202

This week, attention will likewise be focused on the Democratic National Convention, where President Joe Biden will speak on Tuesday.

Vice President Kamala Harris was officially named the Democratic Party's nominee for president in early August, and chose Minnesota Governor Tim Walz as her running mate.

Harris had received Biden's endorsement in July, and recent polls have seen her closing in fast on Republican frontrunner Donald Trump, which means a tight race for the presidency in 2024.

Lowe's Result.

Tuesday's economic data agenda is virtually eventless, with investors set to remain focused on the minutes of the Federal Reserve's latest meeting on Wednesday and Chairman Jerome Powell's speech in Jackson Hole on Friday.

Home improvement retailer Lowe's (LOW) will release its results, while shares of cybersecurity company Palo Alto Networks (PANW) rose nearly 2% after reporting positive fiscal fourth-quarter results.

The fight to take control of Paramount Global (PARA) has intensified with media executive Edgar Bronfman Jr. submitting a bid of about $4.3 billion to buy National Amusements, the company that owns a controlling stake in the media giant.

The move puts the planned acquisition by David Ellison, founder and CEO of Skydance Media, in jeopardy.

Crude oil loses ground as geopolitical risks recede

Crude oil prices declined on Tuesday on easing geopolitical risks in the wake of progress on a possible Gaza ceasefire deal.

U.S. Secretary of State Antony Blinken said Monday that Israeli Prime Minister Benjamin Netanyahu accepted a "bridging proposal" put forward by Washington to resolve disagreements blocking a Gaza cease-fire deal, and invited Hamas to do the same.

This indicates a greater likelihood of a ceasefire agreement, which would cause market participants to discount the potential dangers of an escalation across the region, something that could affect supply in this oil-rich area.

The decision by the People's Bank to leave its benchmark interest rate unchanged disappointed some traders, given the weakness of the country's latest economic data.

In the United States, the American Petroleum Institute will release its estimate of crude oil reserves.

 

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Dubai Admits Cryptocurrencies as Legitimate Salary Payment
Dubai’s justice administration has officially recognized the use of cryptocurrencies as a valid means of paying salaries.

The landmark decision, adopted by the Dubai Court of First Instance, marks a milestone in the development of cryptocurrencies in the city, which aims to lead innovation in disruptive technologies.

Recently, the court issued an order recognizing cryptocurrencies as a lawful method of paying salaries, a decision that not only reinforces Dubai and the UAE’s position as leaders in the adoption of cryptocurrencies but also sets a significant precedent for the future development of cryptocurrency labor relations.

Dubai Sets a New Precedent in Labor Law​

As reported by Lexology, a legal analysis and news platform, the decision by the Dubai Court of First Instance stems from a case last year in which a former employee sued his employer for unpaid wages, partly paid in a cryptocurrency called EcoWatt.

Lexology notes that in that case, the court was cautious regarding salary payments in cryptocurrency due to difficulties related to volatility, calculating value in fiat currency, and, in general, the lack of precise regulation on the matter.

However, in a recent order, registered in case number 1739 of 2024, the court made a 180° turn, adopting a more progressive stance and accepting cryptocurrencies as a legal method of paying labor remunerations.

This, Lexology noted, represents a marked change from the 2023 ruling, highlighting the evolving legal interpretation of cryptocurrencies in the city and reflecting greater acceptance of cryptocurrencies as a legitimate form of remuneration.

According to the resolution, cryptocurrencies are valid not only for paying salaries, but also employees will be able to receive cryptoassets as remuneration without the need to convert them to fiat currency.

The Evolution of Cryptocurrencies in the UAE Judicial Scenario​

The recent ruling by the Dubai Court of First Instance comes in a context where cryptocurrency regulation in the UAE has been continuously evolving.

As mentioned earlier, last year the city’s court took a more cautious and conservative stance, requiring a clear methodology for calculating the value of cryptocurrencies to enforce payments claimed in these cryptoassets. However, the change in the court’s decision this month signals greater receptivity toward cryptocurrencies, aligning with the country’s vision of transforming into a global hub for technological and financial innovation.

The court based its ruling on the principle that salary is a worker’s right and reiterated that employment contracts must be fully enforced, as long as they do not violate laws or public policies.

Experts have pointed out that this decision has set a precedent that could influence future litigation related to remuneration in cryptocurrencies. It could also motivate more companies to consider including digital assets in their pay structures and transform how labor relations are handled in the country.

Dubai and UAE, pioneers in the regulation of cryptocurrencies​

The recognition of cryptocurrencies as a legitimate mode of remuneration in the workplace has significant implications for the UAE economy. With the official recognition of these digital assets, Dubai establishes itself as a pioneer in the integration of cryptoassets into the conventional financial system, potentially attracting more cryptocurrency and blockchain companies to the emirate and fostering an innovation ecosystem that benefits the local economy.

Experts believe that the recent court decision may impact other sectors, encouraging more industries to explore the use of cryptocurrencies in their business transactions.

This could make cryptocurrencies and blockchain technology more widely accepted globally, while also highlighting Dubai and the UAE’s progressive stance in modernizing their economies by adapting legal frameworks to new and emerging technologies.

Dubai’s decision could be the catalyst that leads other countries to reconsider their policies on the use of cryptocurrencies in the workplace and beyond.

 

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Dollar Rebounds but Continues Near Seven-Month Lows
The U.S. dollar rose in early European trading on Wednesday but remains near seven-month lows, as the Federal Reserve minutes from its last meeting and likely revisions to payroll data point to a rate cut next month.

The dollar loses strength in anticipation of Fed minutes and payroll revisions​

The dollar has been under pressure, falling more than 2% over the past month, with U.S. bond yields falling to more than a one-year low after unexpectedly weak employment figures sparked fears of a possible economic recession.

As a result, the revised payroll data, due out Wednesday, is in focus, and the likelihood of a possible downward revision is weighing on the dollar.

The minutes of the Fed’s late July meeting are likewise being released a few hours later in the session, and traders will be paying close attention to estimates that the Fed will cut interest rates at its policy meeting in the middle of next month.

Since July, the Fed has kept its benchmark overnight interest rate between 5.25% and 5.50%.

Nomura expects continued weakness in the U.S. dollar, supported by various macroeconomic factors, positioning adjustments, and, ultimately, portfolio reallocations, which are expected to put downward pressure on the dollar in the coming months.

The euro heads for a strong month​

Turning to Europe, EUR/USD was down about 0.1% to 1.1120, slightly below a high of 1.1130, the highest level since November 28.

Nomura expects a narrowing of the growth differential between the U.S. and Europe, which has been an important factor in the dollar’s strength.

GBP/USD was down about 0.1% at 1.3020, just below last session’s high of 1.3054, a level last reached in July of last year.

Data released on Wednesday showed that U.K. government borrowing rose more than expected in July, with public sector net borrowing of £3.1 billion the previous month, £1.8 billion higher than a year ago, and the highest July borrowing recorded since 2021.

Traders are divided on the odds regarding a further rate cut by the Bank of England in mid-September, after starting a rate-cutting campaign earlier this year in a very tight decision.

Yen loses ground​

Turning to Asia, USD/JPY rose 0.5% to 146.01, although it remained well below the high of 160 reached earlier in the year.

USD/JPY had fallen to 141 in early August as the yen carry trade had largely unraveled on signs of strength from the Bank of Japan, with rising interest rates in Japan expected to underpin the yen and further weaken the carry trade in the coming months.

USD/CNY traded virtually flat at 7.1326 after a slightly stronger midpoint fixing by the PBOC. During Tuesday’s trading, the central bank also kept its prime lending rate unchanged.

 

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U.S. Stocks Rise Ahead of Payroll Revisions and Fed Minutes
U.S. stock indexes rose on Wednesday, with investors cautious ahead of revisions to U.S. payroll data and the release of minutes from the Federal Reserve’s latest monetary policy meeting.

Wall Street indexes closed lower on Tuesday, ending an eight-day upward streak, despite recovering from weakness and volatility in early August.

Payroll revisions and Fed minutes in focus​

Markets are trading cautiously as investors look for more signals about the Federal Reserve’s intentions for its September meeting.

The Bureau of Labor Statistics report on likely revisions to the latest nonfarm payroll data is due later in the session, and most economists expect a downward revision.

Goldman Sachs estimates that about 600,000 to 1 million fewer jobs were created between April 2023 and March 2024 than previously reported, although the influential investment bank noted the likelihood of a downward revision.

Minutes from the Fed’s July monetary policy meeting will also be released later today, ahead of Fed Chairman Jerome Powell’s speech at the Jackson Hole symposium on Friday.

Although investors expect Powell to provide more dovish signals amid recent signs of cooling inflation, he is not expected to explicitly outline plans for an interest rate cut in September.

However, the Fed is widely expected to cut rates next month, with about a 67% chance of a 25 basis point cut and a 33% chance of a 50 basis point reduction, according to CME FedWatch.

Walmart plans to sell its stake in JD.com​

The quarterly earnings season is winding down, although results from several high-profile retailers are still pending.

Target Corporation (TGT) and TJX Companies (TJX) will release their results later on Wednesday, and investors will be watching closely to see if they gain market share with back-to-school sales.

Elsewhere, shares of Chinese e-commerce company JD.com (JD) fell sharply before the market opened after Bloomberg reported that Walmart (WMT) was considering selling its stake in the company for about $3.7 billion.

Shares of Keysight Technologies (KEYS) rose after its earnings beat forecasts, while 3D Systems (DDD) lost value after reporting lower-than-expected earnings.

Shares of furniture maker La-Z-Boy Incorporated (LZB) fell as weaker-than-expected forecasts largely offset strong results.

 

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Tether Launches Dirham-Backed Stablecoin in the UAE
Tether is partnering with Phoenix Group and Green Acorn Investments in the United Arab Emirates to create a dirham-linked stablecoin aimed at facilitating international trade and remittances. Tether, the largest stablecoin provider in the digital asset sector, has announced its plans to launch a new stablecoin pegged to the United Arab Emirates dirham (AED). According to a press release shared with Cointelegraph, the new stablecoin will be launched in partnership with Phoenix Group and Green Acorn Investments, both UAE-based companies.

The main objective of this collaboration is to establish a digital representation of the dirham currency, which will be “fully backed by liquid reserves in the UAE.” This will ensure the stability and reliability of its value. “Following Tether’s transparent and robust reserve standards, each dirham-linked token is guaranteed to be pegged to the value of the AED, providing stability and confidence.”

Tether expands its market in the UAE​

Separately, Tether’s expansion into the UAE financial market with its new dirham-linked stablecoin is expected to provide users with a cost-effective and easily accessible means to “access the benefits of the AED.”

The press release states that the new stablecoin will “streamline international trade and remittances” by lowering transaction fees and providing a hedge against currency fluctuations. Paolo Ardoino, CEO of Tether, explained that the company is “delighted” to add the dirham-linked stablecoin to its “range of stablecoin options.”

“The UAE is transforming into a major global economic hub, and we believe our users will find our dirham-linked token to be a valuable and versatile addition.”

Collaboration with Phoenix Group​

In partnership with Phoenix Group, a multi-billion-dollar technology conglomerate based in Abu Dhabi, Tether seeks to provide businesses and individuals with an “essential tool” for transactions.

According to the press release, the use of cryptocurrencies in the UAE has grown exponentially since 2022, driven primarily “by the establishment of the Virtual Assets Regulatory Authority.” Indeed, this boom reflects a considerable shift in the adoption of digital assets in the region.

Seyed Mohammad Alizadehfard, co-founder and CEO of Phoenix Group, stated that the partnership “reflects” the firm’s “dedication to providing financial solutions” to its clients.

Tether’s expansion to the Aptos blockchain​

On August 19, Tether introduced its USDT token on the Aptos Layer 1 blockchain, with the goal of improving access to and use of the digital currency worldwide and reducing transaction costs. Thanks to the speed and scalability of Aptos, Tether aims to offer blockchain users “extremely low gas fees, costing only a fraction of a cent.”

Through this integration, transaction fees on Aptos using USDT will become “economically viable” for many use cases, including larger-scale enterprise operations and microtransactions.

 

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U.S. Stock Markets Rise With Rate Cuts and Nvidia Results Leading the Way
U.S. stock indices were slightly higher on Monday, with markets taking a breather after a week of strong gains amid growing expectations of an interest rate cut by the Federal Reserve.

Caution mainly gripped the markets ahead of several important events this week, most notably the results of NVIDIA Corporation (NVDA), one of the market’s most heavily weighted companies, with results due on Wednesday. The PCE price index data, the Federal Reserve’s favorite inflation gauge, will also be released near the end of the week.

S&P 500 futures were up about 0.1% to 5,661.75 points, while Nasdaq 100 futures were up 0.2% to 19,835.7 points. Dow Jones futures were little changed at 41,289.0 points.

Nvidia’s Results, AI Recovery in Focus​

On Wednesday, Nvidia will release its results for the first three months of July, focusing on whether the company has been able to maintain its stellar earnings growth rate due to the artificial intelligence push.

The chipmaker’s results and estimates will also provide further signals on the state of demand for artificial intelligence, coming just after a series of mixed results from other technology heavyweights cast doubt on whether last year’s market rally, driven by artificial intelligence, could be justified. Heavyweights such as Alphabet (GOOGL) and Microsoft Corporation (MSFT) had fallen after their second-quarter earnings reports.

Nvidia, the company that manufactures the most high-tech AI chips on the market, was one of the main beneficiaries of the increased interest in artificial intelligence, doubling its value and becoming one of the most valuable companies on Wall Street this year.

However, this trend will come under scrutiny on Wednesday. Earnings from other chipmaking titans, such as TSMC (TSM) and ASML (ASML), released in July, indicated that chipmakers at least continue to profit from AI demand.

PCE Inflation May Impact the September Rate Cut Expectations​

This week, attention will also focus on data from the PCE price index, the Fed’s preferred inflation gauge. The reading will be released on Friday and is likely to provide further signals about the path of interest rates.

Comments made by Fed Chairman Jerome Powell on Friday cemented estimates for a September rate cut, even though CME Fedwatch indicated that market traders were split on a 25 or 50 basis point reduction.

It is possible that the PCE inflation reading will influence bets on the extent of the September cut.

Dow Jones and S&P 500 Hover Near All-Time Highs​

Optimism regarding interest rate cuts sent Wall Street indexes to near record highs on Friday.

The S&P 500 rose 1.2% to 5,634.62 points, while the Dow Jones Industrial Average lost about 1.1% to 41,175.08 points. The Nasdaq Composite rose nearly 1.5% to 17,877.79 points.

While the Dow Jones and S&P 500 were approaching recent highs, the Nasdaq continued to trade below its all-time high achieved earlier in the year, as a mix of profit-taking and doubts about the artificial intelligence rally hit all technology stocks in July.

Rate cut expectations also caused traders to sell technology stocks and move into sectors that are more sensitive from an economic and value-oriented perspective.

 

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Market Highlights for the Week: Nvidia, Inflation, Gold
The rally in U.S. markets will come under scrutiny this week when chip manufacturing giant Nvidia’s (NVDA) results are released. U.S. inflation data is likely to bolster expectations for long-awaited rate cuts, while the Eurozone and Australia will also release inflation data that will influence the path of interest rates. Here is a summary of what will happen in the markets this week.

Nvidia Results​

After the close on Wednesday, Nvidia’s results could challenge investors’ enthusiasm for artificial intelligence.

The earnings report, coupled with guidance on whether it expects corporate investments in AI to follow, could be a key turning point for market sentiment at a time of historic volatility. Nvidia shares are up about 150% so far this year, which accounts for a quarter of the S&P 500’s 17% year-to-date rise. However, the impressive multi-year streak and AI mania have also prompted references to the dot-com bubble that burst more than two decades ago.

The data comes at the end of an earnings season in which investors have been less tolerant of tech companies whose profits have not justified high valuations or huge spending on artificial intelligence. These include Microsoft, Tesla and Alphabet, whose shares have declined since their July reports.

U.S. Data​

The highlight of the economic calendar will be Friday’s Personal Consumption Expenditure (PCE) price index, the Fed’s favorite inflation gauge. Speaking at the Fed’s annual symposium in Jackson Hole on Friday, Fed Chairman Jerome Powell acknowledged recent gains in inflation and said, “The time has come to tighten policy.” “We do not see or welcome further weakening in labor market conditions,” Powell added in a speech that seemed to all but guarantee a rate cut at next month’s policy meeting, which would mark the first such cut in more than four years.

The economic calendar also includes a durable goods orders report on Monday and revised second-quarter GDP figures on Thursday, in addition to the weekly initial jobless claims report.

Eurozone Inflation​

Eurozone inflation data for August, due Friday, will prove decisive for the European Central Bank’s interest rate decision in September.

This report, which is released starting Thursday, follows a small but unanticipated rise in inflation in July, posing a challenge for inflation control. While headline inflation is expected to decline, thanks in part to falling oil prices, the focus will be on core inflation and the services sector, where price increases have been the most steady. Upside surprises in the data could lead to caution, especially considering that traders have increased their expectations for an ECB rate cut in recent weeks.

Market expectations are largely in favor of a 25 basis point rate cut on September 12, with a high possibility of additional cuts through the end of the year.

Australian Inflation​

Australian July inflation figures, due on Wednesday, may show headline inflation within the Reserve Bank of Australia’s target range of 2-3% for the first time in three years.

Any sign of easing inflationary pressures could increase scrutiny on the central bank, which is seen as a global outlier for its reluctance to cut rates when many other central banks have begun or are contemplating easing cycles. Investors are also looking ahead to Wednesday’s data, which could help ease consumer confidence, battered by high borrowing costs.

In addition, Tokyo’s August inflation report, due Friday, may offer further clues on Japan’s monetary policy outlook.

Gold​

Gold has set consecutive record highs since 2022 and is up more than 20% so far this year, with $3,000 an ounce already in sight.

The precious metal, traditionally considered a safe haven in times of heightened security risks and political and economic instability, has benefited from several converging factors. Russia’s invasion of Ukraine in February 2022 triggered an initial rally in gold prices. Rising commodity prices and the resulting inflation, which undermines the value of fiat currencies, further supported the uptrend.

Ongoing pressures in the Middle East and uncertainty surrounding the upcoming U.S. presidential election also contributed to gold’s gains. In addition, expectations of interest rate cuts in the United States have put pressure on the dollar, making gold, which tends to have an inverse relationship with the U.S. currency, more appealing.

However, gold investors should be cautious, as markets often experience corrections, following the adage “nothing goes up in a straight line,” which aligns with the “buy the rumor, sell the news” trend.

 

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Cryptocurrencies lead spending in U.S. elections
The cryptocurrency industry is influencing this year’s elections, to which it has contributed $119 million.

Cryptocurrencies as major political backers​

Cryptocurrency companies have morphed into the biggest political funders of federal elections, contributing nearly half of the corporate money going into this year’s elections, according to data from the nonprofit consumer advocacy organization Public Citizen.

The funds are coming primarily from two companies – Coinbase and Ripple – that are sending money to super PACs such as Fairshake PAC, dedicated to “elevating pro-cryptocurrency candidates and attacking cryptocurrency skeptics,” according to Public Citizen. Companies are not limited in the amount of money they can invest in political candidates following the 2010 Supreme Court ruling in Citizens United v. Federal Election Commission. However, they must contribute those funds to groups that are not directly involved with a candidate’s official campaign.

Elections 2024:​

The cryptocurrency industry has especially stepped up spending for the 2024 election, following the contributions it made for the 2020 election, when Sam Bankman Fried was still its figurehead. Now the stakes are higher. “The industry sees this election as existential,” Veronica McGregor, chief legal officer at cryptocurrency wallet firm Exodus, told Wired. “No matter who comes to power, changes are required for our industry to thrive as it should.”

Candidates’ stance on cryptocurrencies​

The influx of money heading into the presidential election has prompted this year’s candidates to contemplate cryptocurrencies as an issue that will entice voters. Moreover, it could be a pivotal moment for an industry that has come under fire for skirting laws and has been the subject of federal investigations.

At the Bitcoin 2024 conference in Nashville in February, Trump – who called Bitcoin (BTC) “ highly volatile and air-based” in 2019 – said he was going to present a plan “to ensure that America is the cryptocurrency capital of the planet and the Bitcoin superpower of the world.” Trump has already won the support of several cryptocurrency enthusiasts, including running mate JD Vance, who owns at least $250,000 worth of Bitcoin. Harris, in turn, has been more cautious in his support for the industry. “She’s going to support policies that ensure that emerging technologies and this type of industry can continue to grow,” one of her campaign advisors told Bloomberg.

Crypto4Harris’ role in the Harris campaign​

Behind the scenes, a new group called Crypto4Harris, headed by former PayPal chief blockchain strategist Johnathan Padilla, is dedicated to “developing a nuanced crypto-policy approach for the Harris For President campaign,” according to its X-page.

Padilla is confident the group can bridge the gap between the Democratic Party and the cryptocurrency industry, which seems to be coalescing around Trump. “People are angry. People are restless. But I think if the reset we’re talking about with the Harris campaign happens, we’ll be in a very good position for tensions to ease.” Padilla to Wired.

 

[OnEquity]

Dollar hovers near recent lows; labor market data decisive
The U.S. dollar was trading little changed in early European trading on Tuesday, helped somewhat by rising geopolitical tensions, although it remained near its recent lows ahead of the Federal Reserve’s impending interest rate cut.

Job market data boosts the dollar​

The dollar rose on Tuesday as geopolitical tensions in the Middle East, Libya and Ukraine fueled safe-haven demand for the U.S. dollar.

However, these gains appear to be limited as traders focus on impending U.S. rate cuts, especially after Federal Reserve Chairman Jerome Powell indicated the possibility of such a move during his speech in Jackson Hole on Friday.

That said, the magnitude of the cut remains somewhat uncertain and data-dependent, Deutsche Bank economists reported in a note on Monday, with the size of the rate cut at next month’s meeting likely to be determined primarily by labor market data.

The bank currently believes the Fed will cut rates by about 25 basis points at each of its remaining meetings this year, then pause until about 25Q3 in order to again gradually bring rates back to neutral.

Germany’s economy contracted in Q​

In Europe, the EUR/USD was up 0.1% at 1.1172, near multi-month highs. Data released Tuesday showed that the German economy contracted by 0.1% in the second quarter of 2024 when compared to the previous three-month period.

The year-over-year change for the second quarter was revised to 0.0% from -0.1% reported earlier.

The European Central Bank began its rate-cutting cycle in June, and the Eurozone inflation data for August, which is released on Friday, will be key to its September rate decision.

GBP/USD was up about 0.2% to 1.3222, near its recent highs, and the pound was up about 1.5% against the dollar in the previous week.

While Fed Chairman Jeome Powell signaled that rate cuts are on the horizon in his speech at the Jackson Hole symposium on Friday, Bank of England Governor Andrew Bailey, for his part, continues to worry about inflation in the UK.

Right now, markets are expecting more rate cuts from the Fed by the end of the year than from the Bank of England, which should support sterling.

The yen’s rise pauses​

Turning to Asia, the USD/JPY was up nearly 0.4% at 145.12. The yen’s recent rally was halted by the release of the Cooperative Services Price Index, a gauge of producer inflation, which came in slightly below estimates, raising doubts about a pickup in inflation this year.

The USD/CNY rose 0.1% to 7.1289 and the Chinese yuan lost ground slightly after Canada reported that it will impose a 100% tariff on imports of electric cars from China, copying similar measures taken by Europe and the United States.

The country will also impose a 25% tariff on steel imports from China.

 

[OnEquity]

U.S. Stocks Climb on Rate Cut Hopes, Nvidia Confidence
U.S. markets and stock indices rose slightly on Tuesday, stabilizing after a period marked by volatility ahead of this week’s expected results from chip manufacturing giant Nvidia (NVDA).

DJIA in Record-High Territory​

The Dow Jones Industrial Average reached an all-time high on Monday as a rotation in technology stocks boosted the index’s components.

Year-to-date, the index has posted gains of 9.4%, while the S&P 500 has risen nearly 18%, and the tech-heavy Nasdaq Composite has gained just over 18%.

Sentiment Buoyed by Possible September Cut​

Overall sentiment towards equity markets continues to be relatively positive on expectations of an interest rate cut.

Restrained comments from Fed officials, especially Chairman Jerome Powell, led traders to price in a cut of at least 25 basis points in September, according to CME Fedwatch.

The change in tone by the Fed, which came amid signs of considerable cooling in the labor market, has raised concerns about decelerating economic growth.

The most important item on this week’s economic calendar is the personal consumption expenditures price index due Friday, the Fed’s favorite inflation gauge.

Thursday will bring revised second-quarter GDP figures, as well as the weekly report on initial jobless claims.

Nvidia’s Results in the Spotlight​

Retailer Nordstrom’s (JWN) quarterly results, due after the session closes, will be closely watched for indications of consumer health.

However, the week’s main corporate focus will be on Nvidia’s results on Wednesday.

The stock has been at the center of a large rally in AI-fueled and AI-driven valuations over the last year, although this reputation has come under threat in recent months, particularly in the broader technology sector.

Results from other major chipmakers, such as TSMC (TSM) and ASML (ASML), released in July, indicated that the chip manufacturing sector is still poised to benefit from the demand for artificial intelligence.

Separately, Apple (AAPL) reported Monday that Luca Maestri will step down as CFO in early 2025, while Skydance Media appears poised to take control of Paramount (PARA) after media executive Edgar Bronfman Jr. dropped out of the race for control of the media conglomerate.

 

[OnEquity]

BTC Millionaires Skyrocket 111% in Just One Year
2024 has been a positive year for the cryptocurrency industry. In the eight months that have passed this year, the number of cryptomillionaires has shot up by nearly 100% thanks to the boost the market has received from Bitcoin and Ethereum ETFs.

According to a recent report by Henley & Partners, about 172,300 people around the world are cryptomillionaires.

ETF Boom Boosts the Number of Bitcoin Millionaires​

The report, called Crypto Wealth Report 2024, highlights that the boom generated by the approval of Bitcoin and Ethereum ETFs in the United States skyrocketed the number of cryptocurrency millionaires.

Analysts at Henley & Partners highlight that, over the course of this year, they have noted a 95% increase in the number of people who own more than $1 million in cryptocurrencies.

“There are currently 172,300 people worldwide who own more than $1 million in cryptoassets (a 95% increase compared to last year) and the number of Bitcoin millionaires has shot up 111% to 85,400,” the report reads.

That said, the firm highlights that most of the new cryptocurrency millionaires in 2024 are Bitcoin-related investors.

The price of Bitcoin has grown 142% in the last year, rising steadily from a price of USD 26,100 on August 27, 2023, to USD 63,100 at the time of publication of this article.

“Of the six new crypto billionaires created over the past year, five came from Bitcoin, underscoring its dominant position when it comes to attracting long-term investors who buy large stakes,” Henley & Partners analysts note.

The report also details the category of “crypto billionaires.” These are investors who own $100 million or more in cryptocurrencies. Additionally, the number of these holders has increased to 325 worldwide.

What’s Next for Cryptocurrency ETFs? Expectations Are Rising!​

Crypto Wealth Report 2024 also speculates about what the next cryptocurrency ETF to be licensed in the United States may be. Dominic Volek of Henley & Partners notes that the authorization of the Bitcoin and Ethereum spot ETFs “unleashed a torrent of institutional capital” and that the next fund may be Solana.

“Now the expectation is rising that potential Solana ETFs will join the Wall Street party. These milestones have seeded a new era of cryptocurrency adoption, with digital assets increasingly intersecting with traditional finance and global mobility,” predicts Dominic Volek of Henley & Partners.

According to TradingView data, Bitcoin has recorded growth of 142% over the last year, rising steadily from a price of USD 26,100 on August 27, 2023, to USD 63,100 at the time of publication of this article.

The price of Bitcoin has grown 142% over the last year, rising steadily from a price of USD 26,100 on August 27, 2023, to USD 63,100 at the time of publication of this article.

 

[OnEquity]

U.S. Stock Market Little Changed Ahead of Nvidia Results
U.S. index futures barely moved on Wednesday, and investors appear to be on the sidelines awaiting Nvidia’s results after the close of trading, which will shed light on artificial intelligence-related trading.

The rotation in technology stocks intensified earlier this week in the wake of growing conviction that the Federal Reserve will cut interest rates next month. This idea also supported flows into the most volatility-sensitive sectors, which helped Wall Street indices reach record highs.

Nvidia Results Will Give More Signals on Artificial Intelligence​

Nvidia Corporation (NVDA), the world’s most valuable chipmaker, will release its second-quarter results after the close of trading. The company is expected to post earnings per share of $0.644 and revenue of $28.68 billion, with both numbers expected to improve compared to the last quarter.

Nvidia shares fell slightly in after-market trading, though so far in 2023 they have experienced a nearly 160% rise as the company has benefited in large part from increased investment in artificial intelligence. As the maker of the most advanced artificial intelligence chips on the market, Nvidia is seen as a bellwether for AI demand.

Nvidia’s gains also come after reports from other major tech companies suggested that AI may not become as significant a profit driver as initially believed, a notion that had led to steep losses in tech valuations the previous month.

Wall Street Moves on Rate Cut Bets, S&P 500 and Dow Jones at Record Highs​

Although there is uncertainty surrounding Nvidia and the rotation in tech stocks, Wall Street indexes closed at record highs on Tuesday, supported by expectations of interest rate cuts, even more so after the Federal Reserve took a dovish tone in its latest comments.

The S&P 500 rose 0.2% and was able to close at an all-time high of 5,625.80 points, while the Dow Jones Industrial Average reached an all-time high of 41,250.50 points during Tuesday’s trading. The NASDAQ Composite index rose as much as 0.2% to 17,755.58 points, although it remained below its recent highs.

According to the CME Fedwatch tool, investors are almost entirely estimating a September rate cut, although they are divided on the reduction as some think it will be 25 basis points and others 50 basis points.

The PCE price index data, which is the Fed’s preferred indicator, will be released this week and is expected to give more signals on the rate cut.

Also, unemployment claims data will be released this Thursday. This data may influence expectations for a cut, especially amid growing anxiety that the labor market appears to be cooling faster than widely believed.

 

[OnEquity]

Bitcoin price today: drops to $59,000 as large token transfer worries investors
Bitcoin lost price on Wednesday, extending a sharp fall from last session’s sharp drop that the movement of a large volume of tokens on a well-known exchange stirred sentiment with estimates of a major selling event.

The world’s most important cryptocurrency posted a sharp drop, reversing sharply its recent gains and falling below the $60,000 level. Prices of other cryptocurrencies also posted market losses on par with Bitcoin.

A $1.88 billion Bitcoin transfer sows fear in the markets​

Whale Alert, an X-profile that analyzes large cryptocurrency transactions using blockchain data, mentioned that around 30,000 Bitcoin tokens, worth around $1.88 billion at today’s exchange rate, were transferred from a cold wallet to the Binance cryptocurrency exchange on Tuesday’s trading day.

Subsequent reports reported that the transaction was an internal transfer between Binance wallets. Although the transfer jolted traders with estimates of a sell event, because it indicated a large amount of Bitcoin being moved to an exchange.

The movement of tokens to exchanges is usually the announcement of a sale, although it was unclear if that was going to be the scenario.

Although the news of the transfer increased the selling pressure on Bitcoin, which was already pulling back after a bounce generated over the weekend.

Bitcoin capital inflows slowing – Glassnode​

A report from blockchain research firm Glassnode showed that net capital inflows into Bitcoin had “cooled considerably” in recent months, possibly driving the token’s performance between $50,000 and $60,000.

The report indicated that investor optimism about the launch of Bitcoin exchange-traded funds had completely slowed, and that some balance had been reached between investors holding profitable investments and those holding loss-making investments in the token.

However, the report also indicated that activity around Bitcoin had slowed dramatically in recent months, so that spot market action was the primary driver of short-term prices.

Glassnode warned that periods of lower speculative and market activity precede “an expectation of greater volatility,” which could portend wilder swings in the Bitcoin price in the coming weeks.

Bitcoin has moved within a narrow trading range after touching its all-time high in March, as trading volume for the token fell steadily amid waning retail interest.

Cryptocurrency prices today: altcoins fall in tandem with Bitcoin​

Cryptocurrency prices in general have followed Bitcoin’s declines against a backdrop of a dearth of positive signs for the sector.

The world’s No. 2 cryptocurrency, Ether, fell 8.6% to $2,464.30, while XRP, SOL and ADA plunged between 4% and 5%.

MATIC lost 10.4%, and among meme tokens, DOGE lost 6.7%.

 

[OnEquity]

Dollar awaits payrolls, euro gains
The U.S. currency retreated slightly on Monday amid light trading due to the holiday, as traders await key labor market data as they look for signs of possible interest rate cuts by the Federal Reserve.

This Monday, activity will be minimal due to the U.S. Labor Day vacation.

Dollar Focuses on Payrolls Report​

The dollar was able to recover last week, after having lost about 5% since the beginning of July, and now the focus is on the U.S. employment report due later this week.

U.S. payrolls due on Friday will play a crucial role after Fed Chairman Jerome Powell shifted from fighting inflation to a willingness to guard against job losses, indicating the likelihood of a 25 basis point rate cut by the end of the month.

Should the outcome be in line with estimates of a 164,000 increase in non-farm payrolls with an unemployment rate of 4.2% it would likely push back the estimate of a 50 basis point cut completely, and all it would take would be an extraordinary infrome for markets to give up the 25 basis points.

Ahead of Friday’s report, other data related to the health of the labor market will be released, starting with Jolts job openings report on Wednesday, which also brings layoff data. Thursday brings ADP data regarding private sector hiring, added with the weekly report on initial jobless claims.

Euro rebounds despite political uncertainty and weak data​

In Europe, the EUR/USD rose 0.2% to 1.1967 after touching its lowest level on record since August 19.

Eurozone manufacturing activity remained in the contraction zone in August, with the final eurozone manufacturing purchasing managers’ index by S&P Global at 45.8 in August, well below the 50 mark that separates growth from hiring.

The European Central Bank cut interest rates in June seeking to stimulate the region’s economy, and looks likely to do so again later this month, after eurozone inflation eased to 2.2% in August, the lowest level recorded for three years.

On the political front in Europe, Alternative for Germany (AfD) became with its result in Thuringia the first far-right party to win a state legislative election in the country since World War II.

The faltering authority of Germany’s government could also complicate politics in Europe as the bloc’s other major power, France, continues to struggle to form a government after early elections in June and July.

GBP/USD gained about 0.1% to 1.3138, and sterling remained in demand, supported by expectations that the Bank of England will keep interest rates higher for longer than in the U.S. and eurozone.

The Bank of England cut rates by 25 basis points on August 1, to %%, and money markets expect another 40 basis point cut by the end of this year.

The yen and yuan lose ground after PMI data​

Turning to Asia, USD/JPY rose 0.4% to 146.6, with the yen losing ground slightly after Japan’s manufacturing activity contracted again in August, according to a survey released Monday from the private sector.

The final au Jibun Bank Purchasing Managers’ Index for Japan’s manufacturing sector rose to 49.8 in August from 49.1 in July, up from 49.5 in the preliminary reading. It remained below the 50.0 line that separates growth from contraction for two months in a row.

USD/CNY rose 0.3% to 7.1105, and the yuan retreated after China’s purchasing managers’ index data on Saturday provided the first insight into the performance of the world’s second-largest economy, with manufacturing activity sinking to six-month lows and also contracting for the fourth month in a row.

 

[OnEquity]

Market highlights for the week: Rates, market, oil
Friday’s August employment report will focus attention on the short vacation week as markets prepare to wait for the Federal Reserve to start cutting rates later this month. Meanwhile, the Bank of Canada is set to implement another rate cut, oil prices will remain under pressure and China will release new manufacturing data. Here is a look at what will happen in the markets this week.

Nonfarm payrolls​

The Federal Reserve is preparing to cut interest rates for the first time in years, so investors will be focused on Friday’s August jobs report for signs of how aggressively the central bank might act.

Fed Chairman Jerome Powell has indicated that now is the time to begin cutting interest rates, and many in the markets anticipate the process to begin with a 25 basis point cut at the next meeting on September 17-18.

With any sign of weakness in the labor market, fears about the possibility of a recession, which roiled markets in late July and early August, could be revived. The influence of the Japanese yen carry trade exacerbated the sell-off.

Pending Friday’s report, there are other updates on the health of the labor market, starting with Wednesday’s JOLTS job openings report, which also includes data on layoffs. Thursday will bring ADP data on private sector hiring, along with the weekly report on initial jobless claims.

Market volatility​

Wall Street stocks rallied and the Dow posted its second straight all-time high on Friday on hopes of an imminent interest rate cut by the Federal Reserve.

Markets have rebounded since the massive sell-off in early August and signs that the rally is broadening are seen as a positive sign for investors uneasy about the concentration in tech stocks.

Investors are also investing in smaller value and small-cap stocks, which are expected to benefit from lower interest rates.

However, according to analysts at Bank of America (BAC), September and October can historically be volatile months for stocks, and surprises in economic data could cause further market convulsions.

Bank of Canada to cut again​

The Bank of Canada is expected to deliver its third straight rate cut when it meets on Wednesday.

The bank has already cut its benchmark rate twice since June to 4.5%, and markets currently expect two more rate cuts this year after September.

Friday’s data indicated that the Canadian economy posted slightly better-than-expected growth in the second quarter, although, in a sign of future weakness, June growth was flat and, according to Statscan’s preliminary estimates, there will be no growth in July either.

Bank of Canada Governor Tiff Macklem hinted after the bank’s July meeting at a shift in focus from fighting inflation to stimulating the economy.

Oil prices under pressure​

Oil prices closed the week lower on Friday and added to heavy monthly losses as forecasts for an increase in OPEC+ supply from October weighed.

Brent crude oil futures prices for October delivery, which expired on Friday, settled USD 1.14 lower at USD 78.80 per barrel, down 0.3% on the week and 2.4% on the month.

US West Texas Intermediate crude oil futures fell USD 2.36 to USD 73.55, down 1.7% on the week and 3.6% in August.

Reuters reported on Friday that OPEC+ is still planning to increase production starting next month, as outages in Libya and cuts announced by some members to offset surplus production offset the impact of weak demand.

Uncertainty surrounding the Fed’s expected rate cuts also weighed, as strong consumer spending data on Friday argued against accelerating the pace of easing. Lower rates could stimulate economic growth and oil demand.

 

[OnEquity]

U.S. Economic Calendar: Key Events for Crypto in September
Cryptocurrency markets are closely watching several key macroeconomic events in the U.S. this month, which could have a considerable impact on cryptocurrencies.

In particular, the Fed’s interest rate announcements will be a key data point in September. Favorable economic information usually has an impact on investor confidence in the cryptocurrency space. Over the course of the year, traditional financial markets have strengthened, making investors more optimistic about the broader economy, and vice versa.

This could influence risk appetite and ultimately affect interest in alternative assets, including cryptocurrencies.

U.S. Economic Events to Watch in September​

Bitcoin (BTC) has further distanced itself from the psychological $60,000 level, maintaining its underperformance despite positive catalysts.

Factors such as increasing institutional adoption, a more positive regulatory backdrop, and expected rate cuts by the Federal Reserve (Fed) have done little to boost BTC’s price.

Bitcoin currently sits more than 20% behind its recent all-time high of nearly $73,500, reached more than five months ago. With the start of the new month, cryptocurrency market traders are keeping a close eye on key developments.

Especially since historical data shows that September has typically been Bitcoin’s lowest-performing period.

Nonfarm Payrolls, Unemployment Rates​

Investors will be closely watching the upcoming U.S. nonfarm payrolls (NFP) report, which contains key data regarding job creation and the unemployment rate. The July report revealed lower-than-estimated job growth, with 114,000 jobs added.

This led to an average forecast of 162,000 for August. If the August NFP data is positive and the unemployment rate declines, the economy could rebound. Thus, it could positively influence investor sentiment towards cryptocurrencies.

Employment reports of this type can significantly affect market confidence, risk appetite, and general economic expectations. Ahead of the NFP report, data from the Job Openings and Labor Turnover Survey (JOLTS), to be released on Wednesday, will provide insights into the health of the labor market. A median forecast of 8.1 million job openings in July, down slightly from 8.18 million, could signal a growing economy, increased consumer spending and possible wage growth.

An average projection of 8.1 million job openings in July, slightly below the 8.18 million, could point to a growing economy, increased consumer spending and possible wage growth.

Separately, the ADP National Employment Report, due out Thursday, will provide a snapshot of private sector employment. If the July ADP report exceeds the 122,000 jobs previously added, it would indicate strong job creation and economic growth.

Debate Between Donald Trump and Kamala Harris​

On September 10, Republican and Democratic presidential candidates for the upcoming November elections, Donald Trump and Kamala Harris, will participate in a debate. With cryptocurrencies and digital assets becoming crucial campaign issues, this event may cause volatility in the Bitcoin and cryptocurrency markets in general.

Indeed, both parties have shown interest in cryptocurrencies, and Harris appears to be approaching pro-cryptocurrency policies. “They have said that one of the things they need are stable rules, rules of the game… focus on reducing unnecessary red tape and unneeded regulatory bureaucracy… innovative technologies while protecting consumers and creating a stable business environment with consistent and transparent rules of the game,” Bloomberg reported, citing Brian Nelson, a senior adviser to Vice President Harris’s campaign.

On the Republican side, Trump’s team is trying to position the U.S. as the cryptocurrency capital of the world. With both candidates trying to connect with the cryptocurrency community, the debate is expected to be high intensity, especially given Trump’s combative style and Harris’ record as a prosecutor.

U.S. Consumer Price Index (CPI)​

U.S. Consumer Price Index (CPI) data for August, scheduled for release on September 11, will be one of the key economic indicators for the month. These data measure the rate of inflation through changes in the prices of consumer goods and services. In July, the CPI inflation rate was 2.9%, down slightly from the 3% recorded in June, according to the U.S. Bureau of Labor Statistics (BLS).

The August CPI data will be critical to see if inflation continues to decelerate, as the Federal Reserve has targeted a 2% inflation rate. If CPI falls below 2.9%, it would indicate that inflation is moving in the positive direction, which could reduce the burden on the Fed to continue to pursue higher interest rates. Ahead of the CPI release, speeches by New York Fed President John C. Williams on September 6 and Fed Governor Christopher Waller will be closely watched.

Possible Bullish Effect​

Previously, both have signaled a possible shift toward looser monetary policy as inflation shows signs of easing and the labor market normalizes. If their upcoming interventions demonstrate confidence that the disinflationary trend remains firm, it could be positive for the cryptocurrency market.

Currently, price pressures are easing across the economy, with declines in asset prices, lower housing cost increases and more modest wage growth contributing to a more general reduction in inflation, especially in the services sector. This trend, if prolonged, could have a positive influence on investor confidence, especially in riskier assets such as cryptocurrencies.

US Producer Price Index (PPI)​

A day after the release of the CPI data, the U.S. Bureau of Labor Statistics will release Producer Price Index (PPI) inflation data. In July, the PPI registered a more notable easing than expected, providing relief to both stocks and Bitcoin. Notably, the U.S. PPI inflation rate moderated to 2.2% year-over-year in July, below the 2.3% expected and behind the revised 2.7% in the preceding period.

Similarly, core PPI inflation, which excludes food and energy prices, fell to 2.4% y/y in July, also below the 2.7% estimate and well below the previous 3.0%. If the August PPI data, which will be released on September 12, indicates a sustained decline in inflationary pressure, it could stimulate risk appetite among investors, which would favor assets such as Bitcoin and other cryptocurrencies.

Fed Interest Rates​

Another key event this month will be the Federal Reserve’s interest rate decision on September 18. At its previous meeting, the Federal Open Market Committee (FOMC) agreed to keep interest rates unchanged, with policymakers voting unanimously to keep the benchmark overnight lending rate between 5.25% and 5.50%.

However, at a recent meeting, Fed Chairman Jerome Powell expressed growing confidence that inflation is on a sustainable path toward the Fed’s 2% target.

 

[OnEquity]

September on Wall Street: Why Should Caution Be Exercised?
September, known as the most dreaded month on Wall Street, is just beginning. What can we expect this month in the U.S. stock market?

What Has Happened​

According to Bloomberg Line, September has been, on average, the worst month of the year for the U.S. stock market for about 75 years, with the S&P 500 index and its predecessor, the S&P 90, losing an average of about 0.87% in September, as stated in a report released by Swiss financial holding company Mirabaud.

The report also indicates that the September effect is not limited to U.S. stocks alone, but is also linked to certain global markets. Some analysts estimate that the negative effect on markets is generated by a seasonal behavioral bias, where investors move their portfolios as the summer winds down to cash in.

The study also mentions that most mutual funds sell their assets to recover tax losses at the end of their fiscal year in September. Additionally, the last two weeks of September have historically been the worst since 1950.

The report highlights that in presidential election years, such as 2024, the average level of market volatility has been higher in the month and in the three months leading up to the election. It should not be forgotten that in September 2024, central bank meetings may be more decisive than before.

Why It Is Relevant​

The September effect is a phenomenon that investors should keep in mind when planning their investment strategies. According to Mirabaud, investors can expect to use weak months as an entry point if they are looking for long-term positions.

However, they should also be prepared for the possibility of increased volatility, especially in a year with presidential elections and central bank meetings around the corner.