Mixed sign in Wall Street This Monday after moderate purchases on Friday and after putting an end to a Very bullish weekwhich was the best so far this year for both the Nasdaq as for the S&P 500as he focuses his attention on the Federal Reserve (Fed) meeting. It is worth noting that the New York indices are trading very close to the historic highs recorded in July, and one of them, the Dow Jones, has once again achieved a historic best, despite the slowdown by Apple, which is falling due to doubts about the demand for the iPhone 16. As for the Fed, the great unknown lies in whether the first descent carried out by the US central bank will be 25 basis points or 50.
The market is divided on this. Thus, a 41% probability is given to a quarter percentage point cut, and a 59% chance to a deeper drop that would put rates in the range of 4.75%-5.00%. «We had been in favor of a 50 basis point cut, but The latest employment and inflation figures suggest that officials are more likely to vote in favour of a 25 basis point cut. However, they will leave the door open to possible more aggressive measures in the future,» they point out at ING Economics. For its part, Link Securities highlights that, although The deflationary process continues at a good pace in the countrythere are still pockets of resistant prices, especially in the services sector, specifically in housing, which shows that There is still work to be done. «In fact, everything seems to indicate that The US labor market is normalizingfollowing the 'excesses' after the pandemic. Finally, it should be noted that the country's economic growth appears to have continued to be solid in the third quarter of 2024, although it is expected to slow down in the coming quarters. In our view, the scenario described It does not make it necessary for the Fed to begin its rate process with a large reduction of its rates, of half a percentage pointbeing, we insist, in our opinion, more feasible that it will reduce its reference interest rates at a pace of 25 basis points in the next FOMC meetings,» they add. Otherwise, the macro agenda of the week will feature the publication of the August retail sales (Tuesday) and the weekly unemployment data (Thursday).
MARKET VISION
«The first half of the pre-Fed week will be somewhat stagnant and it will be better in its second half post-Fed.The approach is similar to that of last week: the market wants to confirm with facts that its expectations of rate cuts and a refocusing of the main central banks more on GDP/employment and less on inflation are materializing,» Bankinter analysts say.If it drops 25 basis pointsup to 5.00%/5.25%, as generally expected, without deteriorating its macroeconomic estimates (remember that this would revive fears of a sharp recession/slowdown in the American economy) and conveys a calm message Regarding the following movements and evolution of the economy, then the market will become calmer and The stock markets will probably tend to rebound on Thursday/Friday«, they add. However, these experts estimate that There is a risk that a more aggressive cutor a substantial downward revision of macro estimates, may fuel fears that something is wrong with the American economy.
TRUMP AND HIS NEW ASSASSINATION ATTEMPT
On the political scene, the former US president and Republican candidate for the presidential elections on November 5, Donald Trumphas come out unharmed from a new assassination attempt on Sunday, for which a suspect has been arrested. «There were shots fired in my vicinity, but before the rumors get out of hand, I wanted you to hear this first: I AM SAFE AND OK!» Trump's presidential campaign wrote in a fundraising email shortly after the incident. «Nothing will stop me. I WILL NEVER GIVE UP!». This new assassination attempt follows the one that took place on July 14when Trump was slightly injured in a shooting at a rally that left the shooter and a rally attendee dead.
COMPANIES AND OTHER MARKETS
On the business level, Apple shares start the week down 2% after the renowned analyst Ming Chi-Kuo warns of «lower than expected» demand for the iPhone 16 Proa week after the company unveiled the latest version of its flagship. On the other hand, Intel shares rise 4% after learning that the company has secured a $3.5 billion contract with the US Army for chip manufacturing
In addition, Evercore ISI ha Alphabet price target cut to $200 from $225 amid concerns it may lose market share in the online search business. In other markets, crude oil is expected to fall to $200 West Texas rises by 2.18% ($70.13) and the Brent advances 1.83% ($72.89). For its part, the euro It appreciates 0.54% ($1.1136), and the ounce of gold earns 0.05% ($2,611). In addition, the 10-year US bond yield relaxes to 3.648% and the bitcoin loses 2.92% ($58,117).