Record highs abound, except in usual place
A look at the day ahead in U.S. and global markets from Mike Dolan
Record stock market highs have lit up across the world once again - though not yet for the usual suspects in the S&P500 .SPX and Nasdaq .IXIC.
Despite a rare stumble for the artificial intelligence theme after Nvidia's results underwhelmed this week, the rest of the stock market complex shrugged it off and has instead lapped up a tasty diet of brisk economic growth along with falling inflation and interest rates.
So much so that if you adjust the S&P500 for the outsize contribution of Big Tech megacaps, it now shows the equal-weighted index .EWGSPC hitting record highs with year-to-date gains of more than 10%.
Underlining the point, the Dow Jones Industrial Average .DJIA hit another record close on Thursday and both Germany's DAX .GDAXI and Europe's broad STOXX 600 .STOXX hit new highs on Friday too.
And that broadening of what many had feared was an overly concentrated market is another sign of some normalisation of market behaviour, along with a return of volatility gauges back closer to long-term averages and a resumption of the negative correlation between stock and bond returns.
For many, that's a much more sustainable constellation and the economic picture backs that up going into Monday's Labor Day holiday.
Second-quarter U.S. GDP growth was revised higher on Thursday, while embedded PCE inflation gauges were marked lower and weekly jobless readings were little changed.
The release on Friday of the July monthly PCE reading is next up and is expected to be similarly benign, allowing the Federal Reserve to go ahead with its first quarter-point interest rate cut next month - while market pricing retains a total of 100 basis points of easing to year-end.
Wall St stock futures ESc1, NQcv1 were higher again ahead of the final trading day of the month and Treasury yields fell back a touch from Thursday's slight gains.
Soothing the bond market in a week of heavy new debt sales was an affirmation late Thursday of Fitch's AA+ U.S. sovereign credit rating with a stable outlook.
Borrowing costs across the economy are ebbing more generally, with the average rate on popular U.S. 30-year mortgages falling to 6.35% this week, the lowest since May 2023.
Pointedly, Fitch's review said the U.S. fiscal profile is likely to remain largely unchanged regardless of who wins the upcoming presidential election, citing structural strengths including high per capita income and financial flexibility as bolstering the credit rating.
And despite a flurry of election trades earlier in the summer, the dramatic switch of fortunes in opinion polls and betting markets has barely flickered on the overall setting of buoyant U.S. markets at large.
Democratic Vice President Kamala Harris' late entry in the presidential race after President Joe Biden's withdrawal in July tightened the race against Republican candidate Donald Trump. A Reuters/Ipsos poll this week showed she leads 45% to 41% and another published in Friday's Wall Street Journal confirmed she was marginally ahead - with betting markets now seeing her as clear favorite.
Harris' first interview with a major news organization since becoming the Democratic nominee was aired on CNN on Thursday, but there was little to disturb market views of what her Presidency would look like.
In Europe, the inflation and interest rate picture was arguably even better.
Euro zone inflation fell to its lowest level in three years at 2.2% this month, just shy of the European Central Bank's 2.0% target and boosting the case for a second ECB interest rate cut of the year in September - even before the Fed gets going.
A day earlier, Germany's EU-harmonized headline inflation rate actually hit the 2.0% target for the first time in almost 3-1/2 years.
Money markets currently see a 60% chance the ECB will cut rates a third time by October - slightly lower than on Thursday. Euro/dollar EUR= steadied as a result following this week's sharp recoil from one-year highs.
The inflation picture in Japan is slightly different.
Core inflation in Japan's capital accelerated for a fourth straight month in August, tracking comfortably above the central bank's 2% target and backing market expectations of more interest rate hikes ahead.
Dollar/yen JPY= held steady just above 145.
But China's yuan CNY= was a much bigger mover - hitting its best levels in more than a year and authorities battle to shore up recently sliding government bond yields and August business surveys are due for release on Saturday.
Increased dollar selling by Chinese corporates - triggered by shifting dollar expectations - could morph into a "stampede" in the short term, boosting the yuan further, China International Capital Corp said in a note.
In corporate news, AI refused to be left out of the limelight. Apple AAPL.O and Nvidia NVDA.O are reportedly in talks to invest in OpenAI as part of a new fundraising round that could value the ChatGPT maker above $100 billion, according to media reports on Thursday.
Key developments that should provide more direction to U.S. markets later on Friday:
* US July PCE inflation gauge, personal income and consumption, Chicago August business survey, final Aug reading for University of Michigan sentiment; Canada Q2 GDP revision
* European Central Bank board member Kerstin af Jochnick speaks in Frankfurt
* US corporate earnings: Marvell Technology
Dow, S&P500 Equal Weight, STOXX600 and DAX hit new records https://tmsnrt.rs/3TaDlmd
US Q2 GDP revised higher, July PCE awaited https://tmsnrt.rs/3Mv9tNi
US GDP contributors https://reut.rs/4dGTQ1u
Continuing claims and JOLTS new hires https://reut.rs/3WXBQJ2
Core inflation in Tokyo accelerates https://reut.rs/3YZh0M1
Editing by Andrew Heavens
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
