Daily global market review

The market commenced the trading session on a positive note, with investors anticipating the release of the FOMC decision at 2:00 p.m. ET. This initial optimism was bolstered by declining oil prices and market rates. While the Nasdaq experienced a slight early setback due to underperforming mega-cap stocks, the overall market sentiment remained positive, supported by a positive A-D (Advance-Decline) line and other major indices in the green.

Following the release of the September FOMC Statement, both the stock and bond markets exhibited considerable price volatility. As widely anticipated, the FOMC voted unanimously to maintain the target range for the federal funds rate at 5.25-5.50%. The directive itself saw minimal changes, but the market's attention was firmly on the Summary of Economic Projections and the dot plot. These conveyed two key insights: first, policy rates are expected to remain elevated for a longer duration, and second, Fed officials are now less inclined to reduce rates in 2024 compared to their earlier forecasts in June.

The median estimate for the fed funds rate in 2023 remained steady at 5.6%, but for 2024, it was revised upward to 5.1%, up from 4.6% in June. This implies a continued preference for one more rate hike this year, albeit a more cautious approach. Furthermore, the estimate for 2025 increased to 3.9% from 3.4% in June, and a new median estimate of 2.9% was introduced for 2026. The longer-term fed funds rate estimate remained at 2.5%, suggesting the Fed's commitment to its 2.0% inflation target.

During Fed Chair Powell's press conference, he emphasized the need for a cautious approach and noted the possibility that the neutral rate might be higher than the longer-term rate (2.5%). This explanation partly accounts for the unexpected resilience of the economy.

The market's concern wasn't that the Fed is outright hawkish at this stage, but rather that it is not leaning dovish. Subsequently, stocks entered a gradual decline in the late afternoon, primarily driven by the underperformance of mega-cap stocks, causing the S&P 500 to hover just above the 4,400 level. Notably, the Vanguard Mega Cap Growth ETF (MGK) declined by 1.6%, in contrast to the market-cap weighted S&P 500's 0.9% decrease.

Across various sectors, most of the S&P 500 sectors ended the day in negative territory, with communication services (-1.9%) and information technology (-1.8%) experiencing the most significant declines. In contrast, the consumer staples sector managed to eke out a 0.2% gain. In the IPO market, Klaviyo (KVYO) made its debut, pricing its IPO at $30 and trading as high as $37 before retracing alongside the broader market in the afternoon.

In the bond market, Treasury yields experienced mixed movement compared to the previous day, rebounding from intraday lows. The 2-year note yield, which was at 5.05% just before 2:00 p.m. ET, settled at 5.13%. Meanwhile, the 10-year note yield, which was at 4.32% before 2:00 p.m. ET, concluded the day at 4.35%.

In terms of economic data, the MBA Mortgage Applications Index showed a 5.4% increase, with refinance applications surging by 13.0%, and purchase applications rising by 2.0%. Additionally, the weekly EIA crude oil inventories reported a draw of 2.14 million barrels, following the previous week's build of 3.96 million barrels.

Overall, the market's performance was characterized by a decline in mega-cap stocks, fluctuations in Treasury yields, and a keen focus on the latest FOMC decisions and statements made by Fed Chair Powell.

In the United States, the Dow Jones Industrial Average started the day at 34,440.88, experiencing a slight decline of 0.22%, shedding 76.85 points. Meanwhile, the broader S&P 500 index stood at 4,402.20, indicating a more significant drop of 0.94%, or 41.75 points. The tech-heavy NASDAQ Composite index also saw a notable decline of 1.53%, down by 209.06 points to reach 13,469.13. In the volatility index, the VIX, there was a substantial increase of 7.30%, pushing it to 15.14. The Russell 2000, representing small-cap stocks, registered a 0.90% decline, shedding 16.42 points to reach 1,810.10. In Canada, the S&P/TSX Composite exhibited marginal change, down by 0.02% at 20,214.69, while the S&P/TSX 60 remained relatively stable with a minimal change of 0.00% at 1,213.48. Moving to Brazil, the BOVESPA index showed a modest gain of 0.72%, rising by 849.54 points to 118,695.32. In Chile, the S&P IPSA recorded a 1.16% decrease, down by 69.84 points to 5,932.83, and in Mexico, the S&P/BMV IPC index rose by 0.55%, adding 287.47 points to reach 52,507.23.

Across European markets, the STOXX Europe 50 index gained 0.71%, up by 28.26 points to 4,007.10, while the broader STOXX Europe 600 index exhibited a 0.91% increase, adding 4.14 points to 460.66. In the United Kingdom, the FTSE 100 index showed a positive movement of 0.93%, up by 71.45 points, reaching 7,731.65. In Italy, the FTSE MIB index surged by 1.64%, rising by 471.67 points to 29,229.30, and in France, the CAC 40 index increased by 0.67%, up by 48.67 points, reaching 7,330.79.

Turning to Asia, Japan's Nikkei 225 index experienced a 0.66% decline, shedding 218.81 points to settle at 33,023.78. In Hong Kong, the Hang Seng index also saw a decline of 0.62%, down by 111.57 points to 17,885.60, while China's Shanghai Composite index recorded a 0.52% decrease, down by 16.39 points, reaching 3,108.57. In Australia, the S&P/ASX 200 remained relatively stable, showing no significant change. In South Korea, the KOSPI index inched up by 0.02%, gaining 0.53 points to 2,559.74, and in Taiwan, the Taiwan SE index dropped by 0.61%, losing 101.57 points to 16,534.75.

In the Indian stock market on September 20th, a mixed performance was observed across various indices. The BSE Sensex had the highest value of 66,800.84 and experienced a notable decline of -1.18%, resulting in a decrease of -796.00 points. On the other hand, the Nifty 50 had the lowest value at 19,878.85 and saw a substantial drop of -1.15%, equivalent to -231.90 points. The India VIX index exhibited a significant gain of +2.70%, representing an increase of +0.2925 points. Among the different indices, the Nifty Midcap 50 performed the best, with a marginal gain of -0.01%, equivalent to -0.80 points. In contrast, the Nifty 50 recorded the most significant decline of -1.15%, resulting in a decrease of -231.90 points. Other notable indices included the BSE MidCap, BSE SmallCap, and Nifty Smallcap 100, which all registered declines of -0.33%, -0.51%, and -0.88%, respectively.The Nifty 500 and S&P BSE ALLCAP also experienced declines of -0.93% and -0.90%, respectively. The S&P BSE-100, S&P BSE-200, and S&P BSE-500 indices also exhibited declines of -1.07%, -0.98%, and -0.92%, respectively, indicating a broad-based negative trend in the market on that particular day.

• NIO Inc. Sponsored ADR Class A recorded a 0.27% increase in price, reaching 8.82. The trading volume was 123 million shares, and it had a 52-week range between 7.00 and 20.95.
• Tesla, Inc. (TSLA) saw a 3.91-point decline in price, resulting in a 1.47% change, with a closing price of 262.59. The trading volume for Tesla was 122 million shares, and its 52-week range extended from 101.81 to 313.80.
• Apple Inc. (AAPL) experienced a 3.58-point decrease in price, translating to a 2.00% change, and ended the trading session at 175.49. The trading volume for Apple was 58 million shares, and its 52-week range spanned from 124.17 to 198.23.
• Intel Corporation (INTC) had a 1.65-point drop in price, resulting in a 4.54% change, closing at 34.69. The trading volume for Intel was 58 million shares, and it had a 52-week range between 24.59 and 40.07.
• Advanced Micro Devices, Inc. (AMD) displayed a decrease of 1.27 points in its price, marking a 1.25% change, resulting in a closing price of 100.34. The trading volume for AMD amounted to 55 million shares, and it had a 52-week range spanning from 54.57 to 132.83.
• Amazon Inc. (AMZN) recorded a reduction of 2.34 points in its price, leading to a 1.70% change, with the closing price at 135.29. The trading volume for Amazon was 46 million shares, and its 52-week range extended from 81.43 to 145.86.
• AT&T Inc. (T) witnessed an increase of 0.34 points in its price, signifying a 2.24% change, and concluding the trading session at 15.55. The trading volume for AT&T was 45 million shares, and it had a 52-week range ranging from 13.43 to 21.53.
• Pinterest, Inc. Class A (PINS) showed an uptick of 0.81 points in its price, resulting in a 3.09% change, closing at 27.02. The trading volume for Pinterest was 40 million shares, and its 52-week range spanned from 20.60 to 30.86.
• Palantir Technologies Inc. Class A (PLTR) experienced a decrease of 0.41 points in its price, indicating a 2.71% change, with a closing price of 14.74. The trading volume for Palantir Technologies was 37 million shares, and it had a 52-week range between 5.92 and 20.24.
• Ford Motor Company (F) had a decrease of 0.20 points in its price, reflecting a 1.59% change, settling at 12.36. The trading volume for Ford Motor Company amounted to 37 million shares, and its 52-week range extended from 10.90 to 15.42.
• Digital Transformation Opportunities Corp. Class A (DTOC) saw a substantial increase in its price, rising by 12.27 points, reflecting an impressive 89.56% change, closing at 25.97. The trading volume for DTOC amounted to 5 million shares, and it had a 52-week range spanning from 7.02 to 39.60.
• Bluejay Diagnostics, Inc. (BJDX) demonstrated a notable increase in its price, surging by 1.65 points, resulting in a 53.23% change, concluding the trading session at 4.75. The trading volume for Bluejay Diagnostics was 37 million shares, and its 52-week range extended from 2.90 to 18.91.
• Avinger, Inc. (AVGR) experienced a significant uptick in its price, with a gain of 3.34 points, indicating a 31.96% change, and closing at 13.79. The trading volume for Avinger was 26 million shares, and it had a 52-week range between 4.13 and 24.30.
• Cambridge Bancorp (CATC) saw a remarkable increase in its price, rising by 12.91 points, marking a 26.57% change, with the closing price at 61.50. The trading volume for Cambridge Bancorp amounted to 885,000 shares, and its 52-week range spanned from 44.62 to 93.00.
• TradeUP Acquisition Corp. (UPTD) witnessed a substantial increase in its price, gaining 2.56 points, reflecting a 26.42% change, concluding at 12.25. The trading volume for TradeUP Acquisition Corp. was 820,000 shares, and its 52-week range extended from 6.88 to 33.00.
• Solowin Holdings (SWIN) displayed a notable increase in its price, rising by 0.55 points, signifying a 22.45% change, with a closing price of 3.00. The trading volume for Solowin Holdings was 2 million shares, and it had a 52-week range between 2.06 and 12.74.
• Cemtrex, Inc. (CETX) experienced a significant uptick in its price, gaining 1.15 points, indicating a 21.10% change, settling at 6.60. The trading volume for Cemtrex, Inc. amounted to 777,000 shares, and its 52-week range spanned from 3.15 to 14.46.
• Steelcase Inc. Class A (SCS) saw a substantial increase in its price, rising by 1.70 points, marking a 19.30% change, closing at 10.51. The trading volume for Steelcase Inc. Class A was 11 million shares, and it had a 52-week range between 6.20 and 11.38.
• MEI Pharma, Inc. (MEIP) demonstrated a significant uptick in its price, with a gain of 0.91 points, signifying a 17.04% change, concluding at 6.25. The trading volume for MEI Pharma, Inc. was 293,000 shares, and its 52-week range extended from 4.00 to 9.78.
• MoneyLion Inc Class A (ML) recorded a substantial increase in its price, surging by 3.61 points, resulting in a 17.04% change, with a closing price of 24.80. The trading volume for MoneyLion Inc Class A was 157,000 shares, and it had a 52-week range between 7.50 and 39.90.

In the cryptocurrency market, the Nasdaq Crypto Index declined by 0.52%, down by 8.13 points to 1,541.96. Bitcoin experienced a minor drop of 0.57%, losing 156.00 points to reach 27,064.00, while Ether exhibited a 1.34% decrease, down by 22.10 points to 1,621.50. In contrast, Litecoin recorded a substantial decline of 4.39%, shedding 2.96 points to reach 64.42, and XRP remained relatively stable with a 0.70% increase, reaching 0.52.

Shifting to the bond market, there were upward movements in yields. The 3 Month Treasury yield increased to 5.327%, gaining 0.035%, while the 2 Year Treasury yield stood at 5.186%, up by 0.073%. Similarly, the 5 Year Treasury yield experienced a rise to 4.581%, with a change of 0.063%, and the 10 Year Treasury yield reached 4.410%, up by 0.047%. The 30 Year Treasury yield also increased to 4.446%, with a change of 0.019%.

Finally, in the currency market, the Euro to US Dollar exchange rate showed a minor decrease of 0.20%, with the rate standing at 1.0659. The British Pound to US Dollar exchange rate also experienced a slight drop of 0.40%, reaching 1.2343. The US Dollar to Canadian Dollar exchange rate remained stable at 1.3462, with no significant change, while the US Dollar to Swiss Franc exchange rate inched up by 0.10%, reaching 0.8987. The US Dollar to Japanese Yen exchange rate saw a 0.34% increase, with the rate at 148.3455.

The Bloomberg Commodity index (BCOMTR) registered a value of 242.55, reflecting a decrease of 0.19%. The UBS Bloomberg CMCI (CMCITR) closed at 1,577.67, showing a marginal decline of 0.05%. The Reuters/Jefferies CRB index (CRYTR) marked a 0.51% decrease, settling at 324.72. The Rogers International index (RICIGLTR) stood at 3,926.04, representing a 0.40% decrease.

Regarding energy commodities, WTI Crude Oil (CL1:COM) on Nymex was priced at 90.28 USD per barrel, marking a 1.01% decline. Brent Crude (CO1:COM) on ICE closed at 93.22 USD per barrel, reflecting a 1.19% decrease. RBOB Gasoline (XB1:COM) on Nymex was listed at 261.42 USD per gallon, showing a 1.65% decrease. Natural Gas (NG1:COM) on Nymex settled at 2.74 USD per MMBtu, indicating a 3.83% drop. Heating Oil (HO1:COM) on Nymex was at 331.62 USD per gallon, recording a 1.71% decrease.

Turning to precious and industrial metals, Gold (GC1:COM) on Comex was valued at 1,950.90 USD per t oz., experiencing a 0.14% decrease. Gold Spot (XAUUSD:CUR) traded at 1,929.53 USD per t oz., reflecting a 0.09% drop. Silver (SI1:COM) on Comex was listed at 23.49 USD per t oz., demonstrating a 0.12% increase. Copper (HG1:COM) on Comex stood at 374.05 USD per lb., marking a 0.17% decrease. Platinum Spot (XPTUSD:CUR) was priced at 930.88 USD per t oz., reflecting a 1.43% decrease.

Lastly, in the agricultural sector, Corn (C 1:COM) on CBOT was trading at 481.50 USD per bu., representing a 1.10% increase. Wheat (W 1:COM) on CBOT was valued at 588.25 USD per bu., showing a 0.73% increase. Cocoa (CC1:COM) on ICE closed at 3,570.00 USD per MT, reflecting a 1.98% decrease. Cotton #2 (CT1:COM) on ICE traded at 86.86 USD per lb., indicating a 0.75% decrease. Live Cattle (LC1:COM) on CME stood at 191.58 USD per lb., marking a 0.58% increase.

On Thursday, September 21, 2023, a series of economic indicators will be released. The Jobless Claims data, set to be disclosed at 8:30 AM ET, will provide insights into the labor market, including figures like the 4-Week Moving Average, Initial Claims - Change, and Initial Claims - Level. These statistics are closely monitored for their impact on employment trends and the broader economy. Simultaneously, the Philadelphia Fed Manufacturing Index, a key measure of regional manufacturing activity, will be unveiled, offering valuable information about the health of the manufacturing sector.

Also at 8:30 AM ET, the Current Account Balance data will be released, offering an assessment of the nation's trade balance with the rest of the world. Subsequently, at 10:00 AM ET, the Leading Indicators data will provide insights into the month-over-month changes in key economic indicators, which are used to gauge the future direction of the economy. At the same time, the Existing Home Sales data will be disclosed, highlighting trends in the real estate market, including the annual rate, month-over-month, and year-over-year changes.

Lastly, at 10:30 AM ET, the EIA Natural Gas Report will present week-over-week changes in natural gas inventories, impacting energy markets and considerations related to energy prices and supply.

• Fed Rate Decision: The prediction is that the U.S. Federal Reserve will maintain its current interest rates in its upcoming announcement. This expectation aligns with consensus forecasts. The primary focus will shift towards the Fed's commentary and outlook for future rate adjustments, indicating a cautious approach. The Fed is likely to emphasize its data-dependent strategy, hinting at the possibility of a rate hike if inflation, as measured by the consumer price index, shows signs of resurgence.
• Market Reaction: In anticipation of the Fed announcement, markets are expected to exhibit cautious optimism. Equities may remain in slightly positive territory, driven by factors like a drop in oil prices and a cooler-than-expected inflation report in the U.K. Bond yields, particularly the 10-year U.S. Treasury yield, are likely to experience some fluctuations but may stay below the recent year-to-date highs, creating an environment of relative relief regarding interest rates.
• Sector Performance: Small-cap and cyclical sectors, including industrials, materials, consumer discretionary, and financials, are expected to lead the market's positive movement. This signals a more optimistic economic outlook for the day, as these sectors are often considered sensitive to economic trends.
• Global Equities: Global equities, especially European stocks, are expected to perform well. This suggests that the positive sentiment is not limited to the U.S. markets but is also prevalent on a global scale.
• U.K. Inflation: The recent U.K. inflation report, indicating a 6.7% rise in the consumer price index in August, the slowest pace in a year and a half, suggests that inflation pressures may be moderating in the U.K. This could potentially provide some flexibility to the Bank of England in its monetary policy decisions.
• U.S. Budget Battle: While the primary focus is on the Fed, the U.S. budget battle remains a factor to watch. Lawmakers are engaged in negotiations for a short-term funding bill, with the potential for a government shutdown. The odds of a shutdown are increasing, although the economic impact is expected to be minimal and reversible once a funding agreement is reached.