The trading week ending Friday, 13 September 2024 saw the S&P 500 (Index: SPX) rise 4.0% above its previous week’s close. The index ended the week at a level of 5,626.02, almost erasing the previous week’s decline.During the past week, there was one overarching factor that influenced investor expectations, which ties to the Federal Reserve’s upcoming interest rate cut set to be announced on Wednesday, 18 September 2024. The answer to the question “how big will the cut be?”Going into the week, there were very high odds the Federal Reserve would enact a quarter point reduction in the Federal Funds Rate. But that changed. By Friday, 13 September 2024, the CME Group’s FedWatch Tool projects a 56% probability the first cut will be 0.25% and a 44% chance it will be 0.50%.For the dividend futures-based model, that certainty there will be a cut, the new uncertainty of its size, and speculation over what will come after has led investors to shift their forward-looking focus from 2024-Q3 outward to the more distant future quarters of 2024-Q4 and 2025-Q1 ahead of the Fed’s announcement.At least, that’s how we interpret what the latest update to the alternative futures chart shows. We find the trajectory of the S&P 500 is consistent with investors focusing their forward-looking attention on either 2024-Q4 or 2025-Q1. latest updateLooking over the market moving headlines of the trading week ending 13 September 2024, we do find something remarkable. Before Friday, 13 September 2024, a push was being made to set the expectation the Fed’s upcoming rate cut would be just a quarter point. While that changed on Friday, the momentum for that change has been building since the weak August 2024 jobs report was released a week earlier.Monday, 9 September 2024
- Oil prices edge up as storm nears US Gulf Coast after week of heavy losses
- US inflation may soon undershoot Fed’s 2% target
- China’s exports likely slowed further in August as trade tensions mount: Reuters poll
-
China’s Deflationary Spiral Is Now Entering Dangerous New Stage
- China’s consumer prices rise in August, PPI stuck in deflation
- High-Frequency Indicators Provide Clear Snapshot Of China’s Dismal Recovery
- Chinese car sales fall for fifth straight month
- Japan’s Q2 GDP growth revised down; softer consumption to test BOJ policy
Tuesday, 10 September 2024
- Oil settles near 3-year low on weak demand outlook
- Surge of imports to US continues as possible East Coast port strike looms
- Fed’s Barr to unveil Basel plan after industry pushback, regulatory delays
- Fed to cut rates by 25 basis points on Sept. 18, twice more in 2024: Reuters poll
- China’s exports up solidly but slowing imports dim trade outlook
- Japan premier hopeful Kato calls for stimulus, doubling household income
- German inflation falls to the lowest level in more than three years
- Why JPMorgan and Other Bank Stocks Tumbled Tuesday
Wednesday, 11 September 2024
-
US consumer prices rise moderately in August
- Core Inflation Comes In Hotter Than Expected, Collapsing Odds Of 50bps Rate Cut
-
Oil recovers after slide as US inventory drop, storm support
- Hurricane Francine disrupts Louisiana energy hubs, crop exports
- Fed seen cutting policy rate by 25 bps next week
- Atlanta Fed’s Bostic violated trading rules, US central bank watchdog says
- BOJ policymaker signals readiness to raise rates if inflation on track
- Number of German insolvencies climbs further in August
- US banks extend slide as investors weigh sobering outlook from executives
Thursday, 12 September 2024
- Oil rises 2% as storm batters US Gulf of Mexico production
- US 30-year fixed-rate mortgage falls to 6.20%
- Japan’s August wholesale inflation slows, takes pressure off BOJ
- Hawkish BOJ policymaker calls for rates to rise to at least 1%
-
ECB cuts interest rates as growth dwindles
- ECB Cuts Rates By 25bps (As Expected); Projects Worsening Stagflation
- VIEW ECB delivers second rate cut of the year
- Dow ends higher, S&P, Nasdaq extend string of wins as investors set sights on rate cuts
Friday, 13 September 2024
- US locks in steep China tariff hikes, some industries warn of disruptions
- Oil eases on resuming US output after storm, rising rig count
- Fed seen nearly as likely to cut rates by 50 bps as 25 bps
- Strong case for 50 bp Fed cut, says former NY Fed chief Dudley
- U.S. finalizes tariff hikes on Chinese goods, many to start September 27
- China to raise retirement age as workforce shrinks, aging population grows
- China’s August new lending rises less than expected, more policy steps expected
- BOJ to hike rates by year-end, say majority of analysts; no September change seen: Reuters poll
- Just how much of an impact does Nvidia have on the S&P 500?
- Prospect of steeper Fed cuts boosts stocks, drives record gold prices
The CME Group’s FedWatch Tool anticipates the Fed will hold the Federal Funds Rate steady in its current target range of 5.25-5.50% until next week. On Wednesday, 18 September (2024-Q3), the Fed is expected to start a series of 0.25%-0.50% rate cuts that will occur at six-week intervals well into 2025.The Atlanta Fed’s GDPNow tool’s projection of the real GDP growth rate for the current quarter of 2024-Q3 bounced back up to +2.5% from the previous week’s forecast of +2.1% growth.Looking ahead to why the Federal Reserve will begin a new series of rate cuts later this week, on Tuesday, 17 September 2024 we’ll show you some of the data the Fed is looking at as it considers whether the U.S. economy is falling into recession and on Wednesday, 18 September 2024, we’ll show you the negative jobs data that may explain why a half point rate cut has become more than a remote possibility during the past week.More By This Author:Rising CO2 Points to Higher China EmissionsUS Imports Surge As China Beats Clock On Biden-Harris TariffsNew Home Affordability Crisis Enters 28th Month
