Global stocks gain on China stimulus and cooling US inflation

Intermediate
Published September 30, 2024 by:
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Macroeconomic/ geopolitical developments

  • The S&P 500 and Dow Jones Industrial Average (DJIA) hit new record highs this week, fueled by the Federal Reserve’s recent rate cut, strong economic data, and optimism over China’s stimulus measures, with both indices marking their 42nd and 32nd record closes of the year, respectively.
  • China’s largest economic stimulus since the pandemic, including rate cuts and billions in new lending, sparked a global market rally, with Asian stocks surging and commodities rising though analysts remain cautious about long-term effectiveness due to weak domestic demand.
China economic stimulus
  • In August, the Personal Consumption Expenditures (PCE) price index rose by just 0.1%, bringing annual inflation down to 2.2%, while core inflation remained slightly elevated at 2.7%, signaling continued progress toward the Federal Reserve’s 2% target.
Personal Consumption Expenditures
  • Investors will closely watch the September US jobs report, PMI surveys, jobless claims, and other key economic data, which could influence expectations for further Federal Reserve rate cuts following its recent monetary easing.

Global financial market developments

  • US and global equity averages extended still higher, to records in places.
  • US and European bonds stay in consolidation mode.
  • The US Dollar Index marked time in consolidation mode, near multi-month lows.
  • Gold futures rallied to another new record.
  • Oil futures sold off, damaging September’s rebound.

Key this week

Central Bank Watch: Central bank activity is modest this week, but with Fd speakers still in the spotlight, notably Powell on Monday.

Macro Data Watch: The main macro data releases this week are the global PMI which are released Tuesday and Thursday, and of course Friday’s US Employment Report. Some other releases of note are the EU and German CPI, plus Japanese and German Retail Sales.

DateMajor Macro Data
09/30/2024Japanese Retail Sales; Chinese Manufacturing and Service PMI; German Retail Sales and CPI; UK GDP; Chicago Purchasing Managers’ Index, Fed’s Powell speaks
10/01/2024Japanese Unemployment and Large Manufacturing Reports; EU CPI; Global Manufacturing PMI;
10/02/2024EU Unemployment Rate; US ADP Employment Change
10/03/2024US Factory Orders; global Service and Composite PMI
10/04/2024EU PPI; US Employment Report
Author

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

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