big news! the federal reserve may cut interest rates for the first time in four years this week, and chinese assets will explode!
2024-09-18
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on september 17, eastern time, the market was waiting for the federal reserve's interest rate decision. the u.s. stock market continued to fluctuate due to the debate over whether to cut interest rates by 25 or 50 basis points. the three major stock indexes closed mixed, with the dow jones and s&p 500 both hitting intraday record highs.
chinese stocks rose collectively, with the nasdaq china golden dragon index rising 1.83%.
01 china's asset explosion
as of the close of trading on september 17, eastern time, the dow jones industrial average fell 15.90 points, or 0.04%, to 41,606.18 points; the nasdaq rose 35.93 points, or 0.20%, to 17,628.06 points; and the s&p 500 rose 1.49 points, rising for the seventh consecutive day, with an increase of 0.03% to 5,634.58 points.
during the day's trading, the dow jones industrial average rose to a high of 41,835.28 points, and the s&p 500 rose to a high of 5,670.81 points, both setting new intraday all-time highs.
technology stocks rose across the board, with amazon and netflix rising more than 1%, apple, google, meta and microsoft all rose slightly.
most bank stocks rose, with morgan stanley falling slightly, jpmorgan chase and goldman sachs rising slightly, and citigroup, bank of america and wells fargo all rising by more than 1%.
chip stocks were mixed, with intel up more than 2%, micron technology and qualcomm up more than 1%, amd and broadcom down slightly, and tsmc and nvidia down more than 1%.
international precious metal futures generally closed down, comex gold futures fell 0.48% to $2,596.4 per ounce, and comex silver futures fell 0.27% to $31.05 per ounce.
popular chinese stocks generally rose, dada group rose 21.7%, bit digital rose 10.98%, gds rose 10.61%, daquan new energy rose 9.9%, 21vianet rose 9.89%, futu holdings rose 4.92%, canaan inc. rose 4.85%, and iqiyi rose 4.06%.
chinese listed new energy vehicle stocks rose collectively, with nio up 0.28%, xpeng motors up 1.51%, and li auto up 12.28%.
02 the federal reserve may cut interest rates for the first time in four years this week
the federal reserve will hold a two-day monetary policy meeting starting on september 17, eastern time, and will announce the results of the meeting on september 18. federal reserve chairman powell will then hold a press conference.the market generally expects that the federal reserve will start its first interest rate cut since march 2020 this week., thus opening the curtain on the interest rate cut cycle.the focus of the debate now is whether the rate cut will be 25 basis points or 50 basis points?
there are still differences in market views.among the large us banks, bank of america and goldman sachs are still in the camp of cutting interest rates by 25 basis points, but jpmorgan chase expects a 50 basis point cut.analysts who support a 25 basis point rate cut believe that the current inflation rate is still higher than the fed's 2% target and the core inflation rate is higher than expected on a month-on-month basis, which means the fed should act cautiously.
analysis supporting a 50 basis point rate cut focuses mainly on concerns about the labor market.recent u.s. employment data showed signs of weakness, and many investors and some economists are worried that the fed has waited too long, putting the u.s. labor market and economic growth at risk and triggering volatility in financial markets. in order to avoid a recession, market participants are calling on the fed to act faster.
according to the current information,betting on the fed to start a 50 basis point rate cut cycle grows, doubleline capital ceo jeffrey gundlach also joined in. he expects the fed to cut its benchmark interest rate by 50 basis points on september 18 and a total of 125 basis points by the end of the year. he believes that the us economy is already in recession and the fed's tightening policy has been maintained for too long.
wall street investors predict that there is about a 64% probability that the federal reserve will cut interest rates by 50 basis points this week.traders are currently pricing in a 67% chance of a 50 basis point rate cut by the central bank, according to cme group’s fed watch tool.
bnp paribas analysts said in a report that the federal reserve is more likely to cut interest rates by 50 basis points this week, leading to a "bullish steepening" in the u.s. treasury yield curve, that is, the decline in short-term treasury yields is faster than long-term treasury yields, and this trend may gain momentum. (yu jiaxin)
china business news is compiled from china fund news, cailianshe, cctv finance, china securities journal
