Global Economic Daily - 09/18/2024

NEWS AND MARKET COMMENTARY

Global Equities

• Stocks Balk at Record as Fed Bets ‘Up in the Air’
• European Stocks Close Higher With Central Banks in Focus; Commerzbank Hits 12-Year High

Global Fixed Income

• Treasury Yields Rise After Better-Than-Expected Retail Sales
• US Treasury Auctions Off $13 Billion of 20 Year Bonds at a High Yield of 4.039%

Currencies

• US Dollar Strengthens Ahead of Expected Fed Rate Cut
• EUR/USD Holds Gains Above 1.1100 With Fed Policy Taking Centre Stage

Energy

• Crude Oil, Product Inventories Climb, Pressuring Rebounding Prices
• Crude Oil Continues to See Buyers

Metals

• Gold Price Forecast: Pulls Back From Record High, New Targets in Sight
• Silver Continues to See Ceiling Above

Global Politics/News

• The Fed’s Biggest Interest Rate Call in Years Happens Wednesday. Heres What to Expect
• US Considers Resolution Demanding Israel End Its Occupation of Palestine Territories

Relevant Government Reports

World Agriculture Supply and Demand Estimates (WASDE)

USDA Agency Reports

Producer Price Index (PPI)

Consumer Price Index (CPI)

U.S. Treasury Report

Fed Report

EIA Reports

EIA Summary

Financial

Closing Commentary

Quote of the Day: Sooner or later, those who win are those who think they can. – Paul Tournier

Equities: Stocks were slightly mixed on Tuesday but overall slightly up. The?S&P 500?ended Tuesday near the flatline after hitting a record high as the market awaited the Federal Reserve’s key interest rate cut decision. The broad market index closed higher by 1.49 points at 5,634.58, after earlier touching an all-time high of 5,670.81. The?Dow Jones Industrial Average?inched down 15.9 points to close at 41,606.18. The 30-stock index also hit a fresh record during the session. The?Nasdaq 100?advanced 9.33 points and ended at 19,432.40. The fresh records for the S&P 500 and the Dow come during a historically tough period for the market. September has been the worst month for the benchmark over the past 10 years, averaging a 1.3% monthly loss. Traders also overcame late-summer headwinds stemming from concerns over the health of the U.S. economy. Disappointing jobs and manufacturing data in August sparked a large one-day sell-off. However, equities were able to rebound due to more constructive data releases and expectations of the Fed lowering rates. Wall Street is on standby for the Fed’s long-anticipated rate cut Wednesday afternoon, a move that could help boost earnings growth for companies following a backdrop of steep borrowing costs and high inflation. The Fed first embarked on its aggressive hiking campaign in March 2022. The latest retail sales data indicated solid consumer health. Retail sales rose 0.1% in August versus economists’ estimates for a 0.2% decline, according to Dow Jones. Excluding autos, the number also came in at a 0.1% increase, which slightly missed the 0.2% consensus forecast. While investors expect a cut Wednesday, the market is divided on the size of the potential reduction. A steeper rate cut may spark concerns about the health of the economy, according to some. TECHNICAL OUTLOOK – The Dow and S&P are above the 14, 21 day moving average.

Metals: Gold and silver prices are weaker in midday U.S. trading Tuesday, as the two precious metals are seeing some profit taking and position squaring by the shorter-term futures traders ahead of major central bank meetings occurring this week. The Federal Reserve’s Open Market Committee meeting began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The marketplace thinking has shifted recently, now slightly favoring a 0.5% rate cut, after earlier reckoning a 0.25% rate cut was most likely. The CME’s FedWatch Tool is currently putting a 67% probability of a 50 basis-point cut, while the likelihood of the smaller 25 basis-point cut has slipped to 33%. The Bank of England and the Bank of Japan hold their regular monetary policy meetings Thursday. Some stronger-than-expected U.S. economic data released this morning, including retail sales and industrial production, also likely pressured gold and silver as the U.S. dollar index pushed modestly higher following those reports. Technically, December gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,500.00. December silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $32.46. The next downside price objective for the bears is closing prices below solid support at $29.00. TECHNICAL OUTLOOK – Gold and silver are above the 14, 21 day moving average.

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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.