Fed Rate Cut Expectations Increase, Japanese Stocks Surge, Bitcoin SoarsOn September 17, the three major U.S
Fed Rate Cut Expectations Increase, Japanese Stocks Surge, Bitcoin Soars
On September 17, the three major U.S. stock indices closed mixed, with the S&P 500 Index and the Dow Jones Industrial Average essentially flat after hitting new highs intraday. Chinese ADRs performed strongly, with the Nasdaq Golden Dragon China Index closing up 1.83%, at one point rising over 2.7%. Digital currencies were also quite strong that day, with Bitcoin hitting its biggest intraday gain in over a month. On September 18, the Japanese stock market, which opened first, performed strongly. As of this writing, the Nikkei 225 Index has climbed 1.3%.
This week marks Super Central Bank Week globally, with the highly anticipated Federal Reserve interest rate decision scheduled for 1:00 AM Beijing time on September 19, becoming the focal point for financial markets. The last major data point before the Fed's September meeting, the U.S. August retail sales data, was released and attracted market attention. The data showed that U.S. retail sales rose 0.1% month-over-month, significantly higher than the anticipated decrease of 0.2%, but a considerable cooling from the previous month's 1% growth. Compared to the same period last year, U.S. retail sales growth slowed to 2.1% year-over-year, with core retail sales excluding automobiles increasing 3.9% year-over-year, showing a slight rebound.
Despite the retail data indicating continued strong U.S. consumer demand, the market still anticipates a significant rate cut by the Fed this week. The CME FedWatch tool shows that the likelihood of a 50 basis point cut remains at 67%, essentially unchanged from before the retail sales data was released.
Besides the Fed, central banks in Japan, the UK, Brazil, Norway, Indonesia, and other countries will also be releasing their latest interest rate decisions. European Central Bank President Christine Lagarde and several other members will be speaking during the week, providing the market with further clues regarding the direction of monetary policy.
On the U.S. stock market front, large tech stocks rose across the board. Intel jumped over 2%, Amazon and Netflix climbed over 1%, Apple, Microsoft, Tesla, Google, and Meta all rose slightly, while Nvidia dipped over 1%. Accenture closed down 4.8%, its worst single-day performance since March. Airline stocks gained, with Hawaiian Airlines rising nearly 4% and American Airlines climbing over 3%.
Intel closed up 2.68%, at one point surging nearly 8% intraday. Intel has been receiving positive news recently. Not only has it finally qualified to manufacture semiconductor components for the Pentagon, potentially securing a $35 billion contract to supply chips to the U.S. military, but it will also manufacture custom AI chips for Amazon AWS, establishing a long-term product and wafer supply partnership framework. Additionally, Intel is striving to conserve cash flow, pausing its Poland and Germany plant projects for about two years and has completed more than half of its plan to lay off 15,000 employees.
Tesla surged over 3% intraday, closing up 0.48%. Recently, Tesla announced that its 100 millionth 4680 battery rolled off the production line. Tesla has reportedly achieved large-scale production of 4680 batteries at its Texas Gigafactory and plans to further expand capacity. It is investing in an expansion at its Nevada factory to produce the Semi electric truck and 4680 batteries, aiming for a battery production capacity of 100GWh. Additionally, Neuralink, the brain-computer interface company owned by Elon Musk, announced that it has received Breakthrough Device Designation from the U.S. Food and Drug Administration (FDA) for its Blindsight project. This project aims to help blind people regain their vision. Breakthrough Device Designation allows devices to receive earlier support from the FDA, thereby accelerating their research and development and market approval processes.
Chinese ADRs performed strongly, with the Nasdaq Golden Dragon China Index closing up 1.83%, at one point rising over 2.7%. The Wind China ADR 100 Index closed up 2.05%, at one point rising nearly 3%. On the individual stock front, Dada Group surged over 21%, Li Auto climbed over 12%, UCloud surged over 10%, Futu Holdings and iQiyi rose over 4%, and Bilibili jumped over 3%.
Digital currencies also performed strongly. CoinGlass market data shows that Bitcoin surged over 6% on Tuesday, reaching $61,345, marking its biggest intraday gain in over a month. This boost also led to a significant intraday rise in Ethereum, reaching a high of $2,392.61. Market analysts believe that the prospect of Fed rate cuts has boosted demand for speculative assets. Nick Timiraos, a prominent macro reporter known as the Fed's mouthpiece, recently stated that the Fed will definitely cut rates this week, but it's still uncertain whether the cut will be a larger 50 basis points or a traditional 25 basis points.
It's important to note that the above is only a summary of current market conditions and should not be considered investment advice. Investors should make independent judgments and analyses based on their own risk tolerance and investment objectives before making any investment decisions.
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