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Nasdaq 100 moves higher as rate hike fears diminish
The Nasdaq 100 resumed its upward trend after recent pullbacks Wall Street worries about Fed rate hikes are moderating, and were reinforced by this morning’s rise in first-time jobless claims. If we see a pause in US rate hikes no one will be surprised, and market’s would be unlikely to react. On the other hand, a rate hike would be a negative surprise. China cut interest rates on domestic deposits – 1-year deposits to 1.65%, 2-year rate falling to 2.05% – to encourage spending in the local economy, struggling to grow, and the yuan drifted lower versus the dollar.
Nasdaq 100 falters as Canada’s rate hike focusses attention on next week’s US decision
The market-leading Nasdaq 100 fell as Treasury yields push higher ahead of next week's meeting of the Federal Open Market Committee. Canada’s central bank unexpectedly raised interest rates by 25 basis points, adding to market apprehension on what might come for US rates. Fed Fund futures trading puts just 36% odds of a rate hike on next week's meeting, up from 22% odds yesterday, leading to some profit taking in tech stocks.e Nasdaq 100 fell on profit-taking in tech stocks as Treasury yields push higher ahead of next week's meeting of the Federal Open Market Committee. Canada’s central bank unexpectedly raised interest rates by 25 basis points, adding to market apprehension on what might come for US rates. Fed Fund futures trading puts just 36% odds of a rate hike on next week's meeting, up from 22% odds yesterday, leading to some profit taking in tech stocks.
Crypto rallies despite SEC actions
Stocks were mixed at midday as traders battle the current malaise ahead of next week's Federal Reserve meeting. The VIX, Wall Street’s fear index, moved to new lows suggesting no great concerns. Coinbase, the listed crypto exchange, was sued by the SEC and ten state regulators, a day after competitor Binance faced its ire. Bitcoin and other crypto tokens rallied. China’s economic recovery saw more bad news, but the World Bank remained upbeat on global growth.
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Oil rallies, Bitcoin slumps
Oil prices rallied after news that OPEC+, led by Saudi Arabia, will reduce oil output. Equity, bond and currency markets were largely unchanged as traders look ahead to next week’s Federal Reserve meeting and the outlook for interest rates. Economic data indicated economic growth, but a slower pace. US/China tensions continue to rise over Taiwan and remain an uncertain wild card for markets. Crypto stocks were slammed as the SEC sued exchange operator Binance.
Russell 2000 leads markets higher, despite another strong jobs report
Smaller and more cyclical stocks in the Russell 2000 index led a buoyant stock market following passage of the debt ceiling bill, sending the measure to President Biden for his signature. Much stronger than expected payroll numbers failed to dampen enthusiasm. Small cap stocks led the rally, taking up leadership from tech stocks. Gold fell back and oil rallied.
Gold rallies and equities fall on stronger jobs data, rate hike risks rise
Stocks remained under pressure today ahead of an expected House of Representatives vote on the debt ceiling deal this evening that would then send the bill to the Senate. Any hint of a slip in approving the deal would spook financial markets. Domestic jobs market data was surprisingly strong, suggesting the next move in interest rates will be up. There was more disappointing economic data out of China, hitting the energy, metals and agricultural commodity markets.
Nasdaq 100 doesn’t wait to ask ‘are we there yet?’
Aside from a continuing surge in AI stocks boosting the Nadaq 100, stocks were generally mixed this morning as work on the Hill turned to turning the debt ceiling deal into a final agreement in both houses on Congress. Don’t crack the champagne just yet – the deal isn’t sealed yet. Crude oil prices were down by more than 4% on the growth outlook if the US defaults, and skepticism about further supply cuts this week's OPEC+ meeting.
Nasdaq 100 set to extend 2023 rally?
US equities are poised to continue the past 2-month rally after today’s Memorial day holiday, with the Nasdaq 100 likely to benefit most. Of major markets open today, the Nikkei 225 was up over 1% (clocking a 20% rise for the year.) US stock futures rose modestly. The VIX, Wall Street’s fear index, fell to 17 this morning, on debt ceiling news.
Nasdaq 100 heads to 12 month high as debt ceiling deal looks close
Nasdaq 100 lead equity markets higher even as bond markets dipped. Markets reacted positively to the belief that a deal on the debt ceiling is close (surprise surprise), but better than expected economic data led to higher expectations for rates (something not expected a few months ago.) The US dollar held on to recent gains, gold was unchanged, and oil bounced back after recent profit taking.
Bearish Base Metals Bottoming Out?
The macro, micro and technical outlook for base metals has been pretty bearish, and it is not surprising that the base metals price index has fallen to six months lows. Market sentiment towards the outlook for a rebound in economic growth within China weakened this year with the release of disappointing economic data.
Nasdaq 100 rebounds even as US debt is put on negative watch
The Nasdaq 100 rebounded this morning as traders become more optimistic on an agreement to raise the US debt ceiling, while Fitch became the first rating agency in this cycle to put US debt on negative watch in case it didn’t. Revised GDP data shows that the consumer spent more on goods and services in the first quarter than early reports, and today’s economic data also suggests the economy is gaining momentum and the job sector is still tight. Fed fund futures are now pricing in the likelihood of one to two more rate hikes this year, now becoming baked into market sentiment.
$80 Oil, despite current weakness?
My colleague Fawad Razaqzada recently noted that the Brent oil price has been testing upwards resistance for several days, but concerns over demand have prevented the bulls from committing to the upside. In recent days the bulls have been given supply side reasons to support an upward move, with news that suggests a tighter oil market in the second half of the year. Could oil move back above $80?
Oil shines as Nasdaq 100 dips, with VIX fear index climbing
The VIX, Wall Street’s fear index, rose to 21 this morning, pricing in fears that the debt ceiling talks don't go well, and/or rates will rise further. Oil prices shone on news that supplies might tighten in the near future, bad news for economic growth and inflation. Today’s release of the minutes of the May Federal Reserve meeting reported significant uncertainty on where rates go next.
VIX risk index rises, Gold unchanged, Nadaq 100 off recent highs
The S&P 500 and Nasdaq 100 were off in morning trade, as debt ceiling talks have yet to produce much progress, despite all the positive rhetoric coming from both sides. The Ukraine war looks to be hotting up, with the risk that commodity prices (and so inflation) will spike. Interestingly, the VIX, Wall Street’s fear index, is creeping up and Gold prices, another risk indicator, were unchanged after recent selling.
Gold, Silver prices dip as debt talks make progress
Debt ceiling talks were the key motivation for gold and silver price slipping this week. After an intraday high of $2,048 per ounce on 10 May, gold fell below the $1,980-$2,000 support level to stand at [$1,960] at the time of writing. The technical position is weakening for gold and silver. Professional and physical market players are not currently prepared to take directional views. For more detailed market commentary go to StoneX Market Intelligence, https://my.stonex.com/.
Nasdaq 100 hits year highs, in the face of debt ceiling and rate rise risks
Wall Street continues to reflect confusion amid contentment, with the tech sector leading, even as debt ceiling talks in Washington remain uncertain. The Nasdaq 100 hit a 12-month high. On the other hand, traders are finally starting to believe that the Federal Reserve may not be finished with rate hikes – and with good reason after comments from Fed governor James Bullard. This week is light on economic data.
S&P 500 at risk in ‘gathering storm’
We believe that the S&P 500 will experience a correction of at least 10% in the next six months for the following reasons, discussed in this article by our global strategist Vincent Deluard. In a hotter-for-longer economy, rates should stay high for longer, which would be bearish for stocks. The only justification for the fact that S&P 500 index trades for a near-record 20 times forward earnings is that rates will soon fall to zero again. If rate cuts do not come in the second half, we expect multiples to fall to 15 – bring on a more sizable correction.
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Fed talk on rate hikes hits Dow Jones, benefits Gold
The Dow Jones and NASDAQ 100 slipped by midday as earlier optimism on a Debt Ceiling agreement was offset by the fear that interest rates might rise again after a later speech by Fed Reserve Chair Jerome Powell. Fed fund futures moved to a more bearish position, now pricing in near equal odds of another rate hike at the June meeting earlier this week, and odds of another rate hike falling to just 18%.
NASDAQ and US Dollar rally, Gold and Oil dip
The NASDAQ 100 and Dow Jones moved higher this morning as optimism grew that a Debt Ceiling agreement will be reached, and despite a growing number of people on Wall Street thinking that the Federal Reserve may have more rate hikes in store for the US economy. The VIX, Wall Street’s fear index, fell back to recent lows, reinforcing the calm mood.
Debt talk optimism buoys S&P 500, regional Banks end losing streak, Gold dips
The S&P 500 rose on optimism that the White House and House Republicans will reach a deal to avert a debt crisis, after House Speaker Kevin McCarthy said that now the two sides are sitting down for discussions he believes that the US will not default on its debt. Regional bank stocks were leading today’s gains, reflecting easing concerns for that sector, seemingly ending a three-month decline.
S&P500, Gold dip on fears over debt ceiling talks
Stocks and gold traded weaker for much of the morning on better-than-expected economic data, as traders continue to monitor today's debt ceiling meeting between President Biden and House Speaker McCarthy. Core retail sales were strong in this morning's data, while industrial output came in much stronger than expected, and the housing index exceeded expectations as well. Data from China suggests a slow recovery from its post-COVID lockdown.
Indices bounce on Debt Talk Optimism
Optimism is growing that the White House will reach an agreement with the Republican House. Traders are also monitoring a plethora of Federal Reserve members speaking publicly this week, with one already going on record to suggest more rate hikes are possible. Fed fund futures currently predict an assumed pause in rate hikes going forward, with rate cuts starting in September, with up to three overall cuts in place by the end of the year. Manufacturing data for New York State provided a reminder that recession could be around the corner.
Indices roll over on Recession Fears, Gold sparkles
Wall Street enjoyed “risk-on” sentiment this morning as regional bank shares stabilized, but stocks turned lower by midday on weaker consumer sentiment data released today, and weak economic data out of China, rekindled recession fears. Gold and the Dollar stood out as the safe haven assets.