Market News by OnEquity

U.S. stocks rise, boosted by possible rate cut and confidence in Nvidia´

U.S. markets and stock indices rose slightly on Tuesday, stabilizing after a period marked by volatility ahead of this week’s expected results from chip manufacturing giant Nvidia (NVDA).

DJIA in record-high territory
The Dow Jones Industrial Average reached an all-time high on Monday as a rotation in technology stocks helped the index’s components.

Year-to-date, the index has posted gains of 9.4%, while the S&P 500 has been able to move nearly 18% and the tech-heavy Nasdaq Composite just over 18%.

Sentiment buoyed by possible September cut
Overall sentiment towards equity markets continues to be relatively positive on expectations of an interest rate cut.

Restrained comments from Fed officials, especially Chairman Jerome Powell, led traders to price in a cut of at least 25 basis points in September, according to CME Fedwatch.

While the change in tone by the Fed, which came amid signs of considerable cooling in the labor market, has put some concerns about de-accelerating economic growth on the table.

Most important on this week’s economic calendar is the personal consumption expenditures price index due Friday, the Fed’s favorite inflation gauge.

Thursday will bring revised second-quarter GDP figures, as well as the weekly report related to initial jobless claims.

Nvidia’s results in the spotlight
Retailer Nordstrom’s (JWN) quarterly results, due after the session closes, will be closely watched for signs regarding consumer health.

However, the week’s main corporate attention will focus on Nvidia’s results on Wednesday.

The stock is at the center of a large rally in AI-fueled and AI-driven valuations over the course of the last year. Although this reputation has come under threat in recent months, at least in the technology sector generally.

Results from other major chipmakers, such as TSMC (TSM) and ASML (ASML), released in July, have indicated that the chip manufacturing sector was still poised to benefit from the demand for artificial intelligence.

Separately, Apple (AAPL) reported Monday that Luca Maestrí will step down as CFO in early 2025, while Skydance Media appears poised to take control of Paramount (PARA) after media executive Edgar Bronman Jr. dropped out of the race for control of the media conglomerate.

Daily Technical Analysis EUR/USD: A Deeper Upward Momentum Is Expected

The EUR/USD rose on Tuesday, benefiting from the continued easing in the markets relative to the U.S. dollar. The pair returned to recent highs after the week began with a small retracement of recent gains, although a new round of risk-on sentiment in the market pushed bids back to those levels. Despite this, EUR/USD continues to be trapped below 1.1200 as Eurozone bulls struggle to instill confidence in the Fib hike.

Fed Chairman Jerome Powell appears to have confirmed that the U.S. central bank will begin a rate-cutting cycle on September 18 during his speech last Friday at the Jackson Hole Symposium, causing market appetite to soar again.

On the euro side, the economic agenda is filled with relatively unimportant news, and Wednesday is shaping up to be a quiet session in both Europe and the United States. Investors will be watching for a speech by Christopher Waller, a member of the Federal Reserve Board of Governors, in the early hours of the U.S. session, while central bank watchers are also looking for headlines from the European Union’s Eurogroup meeting scheduled during the European session.

The European Union’s Harmonized Index of Consumer Prices inflation figures for August will be released early Friday, and Eurozone price growth is expected to fall to 2.8% year-over-year from 2.9%, as inflation pressures continue to ease, although not as quickly as European Central Bank policymakers had hoped.

Also on Thursday, U.S. gross domestic product figures for the second quarter will be released, expected to remain unchanged at 2.8% year-over-year. However, the key data of the week is the Personal Consumption Price Index for July, which is expected to rise from 2.6% year-over-year to 2.7% year-over-year and remain unchanged at 0.2% month-over-month. Market participants, motivated by hopes for rate cuts, believe that the inflation data will come in below estimates, while an above-estimated figure could create nervousness in investors’ risk appetite.

EUR/USD Daily Technical Analysis for August 28th
The EUR/USD is on track for its best monthly performance since November 2022, up more than 3.1% in the month of August alone. Despite the early pullback due to technical exhaustion this week, the Fib has managed to gain ground for four straight trading weeks and is pushing above the 200-day Exponential Moving Average (EMA) at 1.0832.

Unlike a healthy bid into bullish territory, the Fib is very vulnerable to a bearish pullback, and the absence of upside momentum could see prices pull back to the 50-day EMA at 1.0925.

U.S. Stock Market Little Changed Ahead of Nvidia Results

U.S. index futures barely moved on Wednesday, and investors appear to be on the sidelines awaiting Nvidia’s results after the close of trading, which will shed light on artificial intelligence-related trading.

The rotation in technology stocks intensified earlier this week in the wake of growing conviction that the Federal Reserve will cut interest rates next month. This idea also supported flows into the most volatility-sensitive sectors, which helped Wall Street indices reach record highs.

Nvidia Results Will Give More Signals on Artificial Intelligence
Nvidia Corporation (NVDA), the world’s most valuable chipmaker, will release its second-quarter results after the close of trading. The company is expected to post earnings per share of $0.644 and revenue of $28.68 billion, with both numbers expected to improve compared to the last quarter.

Nvidia shares fell slightly in after-market trading, though so far in 2023 they have experienced a nearly 160% rise as the company has benefited in large part from increased investment in artificial intelligence. As the maker of the most advanced artificial intelligence chips on the market, Nvidia is seen as a bellwether for AI demand.

Nvidia’s gains also come after reports from other major tech companies suggested that AI may not become as significant a profit driver as initially believed, a notion that had led to steep losses in tech valuations the previous month.

Wall Street Moves on Rate Cut Bets, S&P 500 and Dow Jones at Record Highs
Although there is uncertainty surrounding Nvidia and the rotation in tech stocks, Wall Street indexes closed at record highs on Tuesday, supported by expectations of interest rate cuts, even more so after the Federal Reserve took a dovish tone in its latest comments.

The S&P 500 rose 0.2% and was able to close at an all-time high of 5,625.80 points, while the Dow Jones Industrial Average reached an all-time high of 41,250.50 points during Tuesday’s trading. The NASDAQ Composite index rose as much as 0.2% to 17,755.58 points, although it remained below its recent highs.

According to the CME Fedwatch tool, investors are almost entirely estimating a September rate cut, although they are divided on the reduction as some think it will be 25 basis points and others 50 basis points.

The PCE price index data, which is the Fed’s preferred indicator, will be released this week and is expected to give more signals on the rate cut.

Also, unemployment claims data will be released this Thursday. This data may influence expectations for a cut, especially amid growing anxiety that the labor market appears to be cooling faster than widely believed.

true

Bitcoin price today: drops to $59,000 as large token transfer worries investors

Bitcoin lost price on Wednesday, extending a sharp fall from last session’s sharp drop that the movement of a large volume of tokens on a well-known exchange stirred sentiment with estimates of a major selling event.

The world’s most important cryptocurrency posted a sharp drop, reversing sharply its recent gains and falling below the $60,000 level. Prices of other cryptocurrencies also posted market losses on par with Bitcoin.

A $1.88 billion Bitcoin transfer sows fear in the markets
Whale Alert, an X-profile that analyzes large cryptocurrency transactions using blockchain data, mentioned that around 30,000 Bitcoin tokens, worth around $1.88 billion at today’s exchange rate, were transferred from a cold wallet to the Binance cryptocurrency exchange on Tuesday’s trading day.

Subsequent reports reported that the transaction was an internal transfer between Binance wallets. Although the transfer jolted traders with estimates of a sell event, because it indicated a large amount of Bitcoin being moved to an exchange.

The movement of tokens to exchanges is usually the announcement of a sale, although it was unclear if that was going to be the scenario.

Although the news of the transfer increased the selling pressure on Bitcoin, which was already pulling back after a bounce generated over the weekend.

Bitcoin capital inflows slowing – Glassnode
A report from blockchain research firm Glassnode showed that net capital inflows into Bitcoin had “cooled considerably” in recent months, possibly driving the token’s performance between $50,000 and $60,000.

The report indicated that investor optimism about the launch of Bitcoin exchange-traded funds had completely slowed, and that some balance had been reached between investors holding profitable investments and those holding loss-making investments in the token.

However, the report also indicated that activity around Bitcoin had slowed dramatically in recent months, so that spot market action was the primary driver of short-term prices.

Glassnode warned that periods of lower speculative and market activity precede “an expectation of greater volatility,” which could portend wilder swings in the Bitcoin price in the coming weeks.

Bitcoin has moved within a narrow trading range after touching its all-time high in March, as trading volume for the token fell steadily amid waning retail interest.

Cryptocurrency prices today: altcoins fall in tandem with Bitcoin
Cryptocurrency prices in general have followed Bitcoin’s declines against a backdrop of a dearth of positive signs for the sector.

The world’s No. 2 cryptocurrency, Ether, fell 8.6% to $2,464.30, while XRP, SOL and ADA plunged between 4% and 5%.

MATIC lost 10.4%, and among meme tokens, DOGE lost 6.7%.

Dollar awaits payrolls, euro gains

The U.S. currency retreated slightly on Monday amid light trading due to the holiday, as traders await key labor market data as they look for signs of possible interest rate cuts by the Federal Reserve.

This Monday, activity will be minimal due to the U.S. Labor Day vacation.

Dollar Focuses on Payrolls Report
The dollar was able to recover last week, after having lost about 5% since the beginning of July, and now the focus is on the U.S. employment report due later this week.

U.S. payrolls due on Friday will play a crucial role after Fed Chairman Jerome Powell shifted from fighting inflation to a willingness to guard against job losses, indicating the likelihood of a 25 basis point rate cut by the end of the month.

Should the outcome be in line with estimates of a 164,000 increase in non-farm payrolls with an unemployment rate of 4.2% it would likely push back the estimate of a 50 basis point cut completely, and all it would take would be an extraordinary infrome for markets to give up the 25 basis points.

Ahead of Friday’s report, other data related to the health of the labor market will be released, starting with Jolts job openings report on Wednesday, which also brings layoff data. Thursday brings ADP data regarding private sector hiring, added with the weekly report on initial jobless claims.

Euro rebounds despite political uncertainty and weak data
In Europe, the EUR/USD rose 0.2% to 1.1967 after touching its lowest level on record since August 19.

Eurozone manufacturing activity remained in the contraction zone in August, with the final eurozone manufacturing purchasing managers’ index by S&P Global at 45.8 in August, well below the 50 mark that separates growth from hiring.

The European Central Bank cut interest rates in June seeking to stimulate the region’s economy, and looks likely to do so again later this month, after eurozone inflation eased to 2.2% in August, the lowest level recorded for three years.

On the political front in Europe, Alternative for Germany (AfD) became with its result in Thuringia the first far-right party to win a state legislative election in the country since World War II.

The faltering authority of Germany’s government could also complicate politics in Europe as the bloc’s other major power, France, continues to struggle to form a government after early elections in June and July.

GBP/USD gained about 0.1% to 1.3138, and sterling remained in demand, supported by expectations that the Bank of England will keep interest rates higher for longer than in the U.S. and eurozone.

The Bank of England cut rates by 25 basis points on August 1, to %%, and money markets expect another 40 basis point cut by the end of this year.

The yen and yuan lose ground after PMI data
Turning to Asia, USD/JPY rose 0.4% to 146.6, with the yen losing ground slightly after Japan’s manufacturing activity contracted again in August, according to a survey released Monday from the private sector.

The final au Jibun Bank Purchasing Managers’ Index for Japan’s manufacturing sector rose to 49.8 in August from 49.1 in July, up from 49.5 in the preliminary reading. It remained below the 50.0 line that separates growth from contraction for two months in a row.

USD/CNY rose 0.3% to 7.1105, and the yuan retreated after China’s purchasing managers’ index data on Saturday provided the first insight into the performance of the world’s second-largest economy, with manufacturing activity sinking to six-month lows and also contracting for the fourth month in a row.

Market highlights for the week: Rates, market, oil

Friday’s August employment report will focus attention on the short vacation week as markets prepare to wait for the Federal Reserve to start cutting rates later this month. Meanwhile, the Bank of Canada is set to implement another rate cut, oil prices will remain under pressure and China will release new manufacturing data. Here is a look at what will happen in the markets this week.

Nonfarm payrolls
The Federal Reserve is preparing to cut interest rates for the first time in years, so investors will be focused on Friday’s August jobs report for signs of how aggressively the central bank might act.

Fed Chairman Jerome Powell has indicated that now is the time to begin cutting interest rates, and many in the markets anticipate the process to begin with a 25 basis point cut at the next meeting on September 17-18.

With any sign of weakness in the labor market, fears about the possibility of a recession, which roiled markets in late July and early August, could be revived. The influence of the Japanese yen carry trade exacerbated the sell-off.

Pending Friday’s report, there are other updates on the health of the labor market, starting with Wednesday’s JOLTS job openings report, which also includes data on layoffs. Thursday will bring ADP data on private sector hiring, along with the weekly report on initial jobless claims.

Market volatility
Wall Street stocks rallied and the Dow posted its second straight all-time high on Friday on hopes of an imminent interest rate cut by the Federal Reserve.

Markets have rebounded since the massive sell-off in early August and signs that the rally is broadening are seen as a positive sign for investors uneasy about the concentration in tech stocks.

Investors are also investing in smaller value and small-cap stocks, which are expected to benefit from lower interest rates.

However, according to analysts at Bank of America (BAC), September and October can historically be volatile months for stocks, and surprises in economic data could cause further market convulsions.

Bank of Canada to cut again
The Bank of Canada is expected to deliver its third straight rate cut when it meets on Wednesday.

The bank has already cut its benchmark rate twice since June to 4.5%, and markets currently expect two more rate cuts this year after September.

Friday’s data indicated that the Canadian economy posted slightly better-than-expected growth in the second quarter, although, in a sign of future weakness, June growth was flat and, according to Statscan’s preliminary estimates, there will be no growth in July either.

Bank of Canada Governor Tiff Macklem hinted after the bank’s July meeting at a shift in focus from fighting inflation to stimulating the economy.

Oil prices under pressure
Oil prices closed the week lower on Friday and added to heavy monthly losses as forecasts for an increase in OPEC+ supply from October weighed.

Brent crude oil futures prices for October delivery, which expired on Friday, settled USD 1.14 lower at USD 78.80 per barrel, down 0.3% on the week and 2.4% on the month.

US West Texas Intermediate crude oil futures fell USD 2.36 to USD 73.55, down 1.7% on the week and 3.6% in August.

Reuters reported on Friday that OPEC+ is still planning to increase production starting next month, as outages in Libya and cuts announced by some members to offset surplus production offset the impact of weak demand.

Uncertainty surrounding the Fed’s expected rate cuts also weighed, as strong consumer spending data on Friday argued against accelerating the pace of easing. Lower rates could stimulate economic growth and oil demand.

U.S. Economic Calendar: Key Events for Crypto in September

Cryptocurrency markets are closely watching several key macroeconomic events in the U.S. this month, which could have a considerable impact on cryptocurrencies.

In particular, the Fed’s interest rate announcements will be a key data point in September. Favorable economic information usually has an impact on investor confidence in the cryptocurrency space. Over the course of the year, traditional financial markets have strengthened, making investors more optimistic about the broader economy, and vice versa.

This could influence risk appetite and ultimately affect interest in alternative assets, including cryptocurrencies.

U.S. Economic Events to Watch in September
Bitcoin (BTC) has further distanced itself from the psychological $60,000 level, maintaining its underperformance despite positive catalysts.

Factors such as increasing institutional adoption, a more positive regulatory backdrop, and expected rate cuts by the Federal Reserve (Fed) have done little to boost BTC’s price.

Bitcoin currently sits more than 20% behind its recent all-time high of nearly $73,500, reached more than five months ago. With the start of the new month, cryptocurrency market traders are keeping a close eye on key developments.

Especially since historical data shows that September has typically been Bitcoin’s lowest-performing period.

Nonfarm Payrolls, Unemployment Rates
Investors will be closely watching the upcoming U.S. nonfarm payrolls (NFP) report, which contains key data regarding job creation and the unemployment rate. The July report revealed lower-than-estimated job growth, with 114,000 jobs added.

This led to an average forecast of 162,000 for August. If the August NFP data is positive and the unemployment rate declines, the economy could rebound. Thus, it could positively influence investor sentiment towards cryptocurrencies.

Employment reports of this type can significantly affect market confidence, risk appetite, and general economic expectations. Ahead of the NFP report, data from the Job Openings and Labor Turnover Survey (JOLTS), to be released on Wednesday, will provide insights into the health of the labor market. A median forecast of 8.1 million job openings in July, down slightly from 8.18 million, could signal a growing economy, increased consumer spending and possible wage growth.

An average projection of 8.1 million job openings in July, slightly below the 8.18 million, could point to a growing economy, increased consumer spending and possible wage growth.

Separately, the ADP National Employment Report, due out Thursday, will provide a snapshot of private sector employment. If the July ADP report exceeds the 122,000 jobs previously added, it would indicate strong job creation and economic growth.

Debate Between Donald Trump and Kamala Harris
On September 10, Republican and Democratic presidential candidates for the upcoming November elections, Donald Trump and Kamala Harris, will participate in a debate. With cryptocurrencies and digital assets becoming crucial campaign issues, this event may cause volatility in the Bitcoin and cryptocurrency markets in general.

Indeed, both parties have shown interest in cryptocurrencies, and Harris appears to be approaching pro-cryptocurrency policies. “They have said that one of the things they need are stable rules, rules of the game… focus on reducing unnecessary red tape and unneeded regulatory bureaucracy… innovative technologies while protecting consumers and creating a stable business environment with consistent and transparent rules of the game,” Bloomberg reported, citing Brian Nelson, a senior adviser to Vice President Harris’s campaign.

On the Republican side, Trump’s team is trying to position the U.S. as the cryptocurrency capital of the world. With both candidates trying to connect with the cryptocurrency community, the debate is expected to be high intensity, especially given Trump’s combative style and Harris’ record as a prosecutor.

U.S. Consumer Price Index (CPI)
U.S. Consumer Price Index (CPI) data for August, scheduled for release on September 11, will be one of the key economic indicators for the month. These data measure the rate of inflation through changes in the prices of consumer goods and services. In July, the CPI inflation rate was 2.9%, down slightly from the 3% recorded in June, according to the U.S. Bureau of Labor Statistics (BLS).

The August CPI data will be critical to see if inflation continues to decelerate, as the Federal Reserve has targeted a 2% inflation rate. If CPI falls below 2.9%, it would indicate that inflation is moving in the positive direction, which could reduce the burden on the Fed to continue to pursue higher interest rates. Ahead of the CPI release, speeches by New York Fed President John C. Williams on September 6 and Fed Governor Christopher Waller will be closely watched.

Possible Bullish Effect
Previously, both have signaled a possible shift toward looser monetary policy as inflation shows signs of easing and the labor market normalizes. If their upcoming interventions demonstrate confidence that the disinflationary trend remains firm, it could be positive for the cryptocurrency market.

Currently, price pressures are easing across the economy, with declines in asset prices, lower housing cost increases and more modest wage growth contributing to a more general reduction in inflation, especially in the services sector. This trend, if prolonged, could have a positive influence on investor confidence, especially in riskier assets such as cryptocurrencies.

US Producer Price Index (PPI)
A day after the release of the CPI data, the U.S. Bureau of Labor Statistics will release Producer Price Index (PPI) inflation data. In July, the PPI registered a more notable easing than expected, providing relief to both stocks and Bitcoin. Notably, the U.S. PPI inflation rate moderated to 2.2% year-over-year in July, below the 2.3% expected and behind the revised 2.7% in the preceding period.

Similarly, core PPI inflation, which excludes food and energy prices, fell to 2.4% y/y in July, also below the 2.7% estimate and well below the previous 3.0%. If the August PPI data, which will be released on September 12, indicates a sustained decline in inflationary pressure, it could stimulate risk appetite among investors, which would favor assets such as Bitcoin and other cryptocurrencies.

Fed Interest Rates
Another key event this month will be the Federal Reserve’s interest rate decision on September 18. At its previous meeting, the Federal Open Market Committee (FOMC) agreed to keep interest rates unchanged, with policymakers voting unanimously to keep the benchmark overnight lending rate between 5.25% and 5.50%.

However, at a recent meeting, Fed Chairman Jerome Powell expressed growing confidence that inflation is on a sustainable path toward the Fed’s 2% target.

September on Wall Street: Why Should Caution Be Exercised?

September, known as the most dreaded month on Wall Street, is just beginning. What can we expect this month in the U.S. stock market?

What Has Happened
According to Bloomberg Line, September has been, on average, the worst month of the year for the U.S. stock market for about 75 years, with the S&P 500 index and its predecessor, the S&P 90, losing an average of about 0.87% in September, as stated in a report released by Swiss financial holding company Mirabaud.

The report also indicates that the September effect is not limited to U.S. stocks alone, but is also linked to certain global markets. Some analysts estimate that the negative effect on markets is generated by a seasonal behavioral bias, where investors move their portfolios as the summer winds down to cash in.

The study also mentions that most mutual funds sell their assets to recover tax losses at the end of their fiscal year in September. Additionally, the last two weeks of September have historically been the worst since 1950.

The report highlights that in presidential election years, such as 2024, the average level of market volatility has been higher in the month and in the three months leading up to the election. It should not be forgotten that in September 2024, central bank meetings may be more decisive than before.

Why It Is Relevant
The September effect is a phenomenon that investors should keep in mind when planning their investment strategies. According to Mirabaud, investors can expect to use weak months as an entry point if they are looking for long-term positions.

However, they should also be prepared for the possibility of increased volatility, especially in a year with presidential elections and central bank meetings around the corner.

Dollar is calm ahead of ISM release and labor market data

The U.S. dollar is calm on Tuesday as investors await key economic data, including Friday’s payrolls report, which could set the stage for a rate cut by the Federal Reserve later this month.

Dollar focuses on labor market
The U.S. ISM manufacturing survey, due later in the session, is the first major indicator in a week full of U.S. data, and is likely to show that the country’s manufacturing sector is still in contraction territory.

However, it is the labor market that will be in the spotlight this week, as Fed policymakers are on the lookout for confirmation that it is time to begin easing monetary policy, with particular focus after Fed Chairman Jerome Powell last month backed an imminent start to interest rate cuts in a nod to labor market concerns.

Friday’s nonfarm payrolls release will be the key data of the week, especially since last month’s jobs report missed estimates, prompting a sharp sell-off in equity markets on fears of a recession.

Job openings are released on Wednesday, and jobless claims on Thursday.

Markets are currently estimating about a 69% chance of a 25 basis point cut when the Fed holds its scheduled meeting on September 17-18, with a 31% chance of a 50 basis point cut, as indicated by CME’s FedWatch tool.

Euro nears two-week lows
In Europe, EUR/USD was down about 0.1% to 1.1061 not far from the two-week low of 1.1042 it touched last session, after data indicated that eurozone manufacturing activity remained in the contraction zone during August.

The European Central Bank cut interest rates in June and looks likely to do so again later this year, especially after eurozone inflation fell to 2.2% in August, the lowest level in more than three years.

Traders are also paying attention to the uncertain political situation in Germany, after Alternative for Germany became the first far-right party to win a state legislative election in Germany since World War II.

GBP/USD lost about 0.2% to 1.3129, with the UK calendar very quiet this week.

Sterling had a strong August, and has gained nearly more than 2% over the past month, supported by estimates that the Bank of England will keep interest rates high for much longer than in the U.S. and eurozone.

The yen rebounds
Turning to Asia, the USD/JPY persisted 0.6% to 146.03, retreating from a two-week high of 147.16 reached on Monday, after data showed that Japanese factory activity contracted again in August, according to a private sector survey.

USD/CNY traded flat at 7.1161 while AUD/USD was down 0.6% at 0.6750 ahead of the Australian gross domestic product report due on Wednesday.

U.S. stock markets fall in cautious mood ahead of Friday’s jobs report

U.S. stocks futures fell on Tuesday, with investors returning from the long weekend cautiously ahead of the release of key labor market data.

Attention focuses on the labor market
Investors are returning from the Labor Day holiday to a crucial week for U.S. markets, with high expectations for upcoming labor market data, most notably Friday’s nonfarm payrolls release.

Last month’s jobs report missed estimates, leading to a sharp drop in risk assets.

The weak labor numbers have sparked discussions regarding their cause, with Hurricane Beryl being a considerable factor. Although the Bureau of Labor Statistics (BLS) reported that the hurricane, which hit the state of Texas during the July employment report survey week, had no discernible impact on the employment data, the household survey showed a different impact.

It indicated that 436,000 people were unable to work as a result of adverse weather conditions, setting a record for the month of July. In addition, 2490,000 people were declared temporarily laid off during the same period.

The increase in unemployment has been largely attributed to these temporary layoffs. Market participants are anxious to determine whether the July data was actually affected by these transitory factors.

The Federal Reserve, which closely follows the labor market, will use this upcoming report to determine the size of the interest rate cut at its next meeting, with the options of a 25 basis point or 50 basis point reduction.

Ahead of Friday’s report, today’s session will see the release of U.S. ISM manufacturing survey data, which is the first relevant indicator of a big week for U.S. data.

Additionally, job openings are released on Wednesday and jobless claims on Thursday.

Markets are estimating a 69% chance of a 25 basis point cut when the Fed meets next on September 17-18, with a 31% chance of a 50 basis point cut, according to CME’s FedWatch tool.

S&P 500 expects a difficult month
Over the past 10 years, the S&P 500 has lost about an average of 2.3% in September, according to FactSet data, the worst month for this index over that time period.

Moreover, the S&P 500 has suffered losses in the past four Septembers, with a 9.3% drop in 2022.

In individual stocks, Tesla (TSLA) shares rose pre-market after Reuters reported that the electric vehicle maker is set to produce a new six-seat version of its Model Y vehicle, with the aim of marketing it in China by the end of 2025.

Crude oil prices fall on demand fears
Crude oil prices traded lower on Tuesday as traders digested sluggish economic growth in China, the world’s largest crude importer.

China’s purchasing managers’ index registered a six-month low in August, according to data released over the weekend, signaling a possible weakening in demand from the world’s largest crude importer.

These concerns have overshadowed Monday’s shutdown of oil exports at major ports in OPEC member Libya as production was cut across the territory.

Qatar Introduces New Legal Framework for Cryptocurrency Regulation

Qatar is opening the way for cryptocurrencies with the introduction of a new special regulatory framework for this type of asset. Companies in the sector can now register, which will help boost the digital economy in the country.

Qatar has adopted a series of new rules to establish a regulatory framework for this new asset class.

In a statement issued this week, the Qatar Financial Center (QFC), a special economic zone located in Doha, the capital of Qatar, introduced a new regulatory framework for cryptocurrencies.

“The QFC’s Digital Assets Framework 2024 establishes the legal and regulatory basis for digital assets, including the tokenization process, legal recognition of ownership rights to tokens and their underlying assets, custody arrangements, transfer and exchange,” the statement said.

This framework, which also provides for the legal recognition of smart contracts, clears the way for companies to secure licenses as cryptocurrency service providers and contribute to the development of the country’s digital financial economy, as the region continues to see growth in transactions related to Web3 and the new asset class.

These new policies from the Arab nation are a departure from an earlier approach that banned cryptocurrency trading and other services. Qatar began a public consultation procedure the previous year with the intention of implementing new regulations.

QFC stressed that the framework has been established after “extensive consultations” by an advisory group comprising 37 national and international organizations. It also stressed that it is part of a national strategic plan by the Qatar Central Bank to create a financial and capital market that is a leader in innovation in the region.

“We anticipate that this regulatory clarity will attract domestic and international players, boosting the competitiveness of Qatar’s financial services sector,” said Yousuf Mohamed Al-Jaida, CEO of QFC.

Qatar Opens Door to Cryptocurrencies
QFC added that it has admitted more than 20 startups and financial technology companies to the QFC Digital Assets Lab, launched in October 2023, for the development and commercialization of their digital asset products in a protected environment.

“Following the launch of the QFC Digital Asset Framework 2024, companies can now apply for a license to carry out token service provider activities,” the entity explained.

The new regulation comes against a backdrop where Middle Eastern countries are keen to open up space for new technologies. Other jurisdictions such as the United Arab Emirates (UAE) have implemented specific regulatory frameworks for cryptocurrencies, laying the groundwork to drive the growth of this type of industry regionally.

“Compared to other countries in the Middle East, Qatar’s approach is remarkably advanced, offering a more structured and clear regulatory environment,” commented Navandeep Matta, senior associate at Kochhar & Co. Legal, about Qatar’s new framework.

“This puts Qatar on par with the UAE’s Digital Assets Framework, establishing a robust regulatory regime that aligns with international best practices,” he added.

The QFC is a national financial and business center located in Doha. It has a specific legal, regulatory and tax framework, allowing up to 100% foreign ownership and 100% return of profits. According to its website, the QFC applies a 10% corporate tax rate on locally sourced profits.

U.S. futures markets fall; weakness continues on Nvidia’s steep decline

U.S. stocks fell on Wednesday, signaling an extension of the sharp losses recorded in the past session on concerns about the economic slowdown.

Wall Street’s major indexes fell sharply on Tuesday as U.S. investors returned from the Labor Day holiday after disappointing data on manufacturing activity stirred concerns about the economy’s outlook.

The Dow Jones Industrial Average lost around 600 points, or 1.5%, the S&P 500 fell 2.1%, its worst day on record since August, while the tech-heavy Nasdaq Composite slumped nearly 3.3%.

Nvidia continues to fall
In a historic day, shares of Nvidia Corporation (NVDA) posted their worst one-day drop in history on Tuesday, plunging more than 9% and losing $279 billion in market capitalization.

It was reported during after-hours trading that the DOJ sent subpoenas to Nvidia and other companies, in a move that intensifies the investigation into the dominant artificial intelligence computing vendor. Nvidia shares fell 1% in pre-market trading.

Volatility in the market may be palpable as investors await Friday’s vital U.S. jobs report, which is expected to provide related information on the health of the U.S. economy and significantly influence the pace of interest rate tightening by the Federal Reserve.

Ahead of the jobs report, the overall job openings and labor turnover survey will be released, and is expected to indicate the number of available jobs fell in July to 8.090 million.

In June, the figure was down slightly to 8.184 million.

Corporate profits continue
In individual stock market movements, shares of Zscaler (ZS) lost value of about 15% despite suggestions that its estimates could be conservative.

Asana (ASAN) shares fell about 14% after reporting a challenging quarter and announcing a change in its CFO. Pagerduty (PD) also saw its shares fall after cutting its revenue forecast by nearly 14%.

On the positive side, Clover Health Investment Corp (CLOV) shares gained about 6% as its counterparty unit won a contract from the Iowa Clinic, and Gitlab (GTLB) shares jumped 18% after solid results and an upgraded forecast.

Market participants are somewhat impatiently awaiting the next U.S. employment report, which is expected to play a key role in the Fed’s decision on whether to implement a recent 25 basis point rate cut or instead apply the 50 basis point next September 18.

Spot Bitcoin ETFs Record Highest Outflows in 4 Months

Spot Bitcoin ETFs have garnered the financial market’s attention in recent months. However, recently released data indicates that these funds experienced net outflows of $287 million on Tuesday, the largest on record in the past four months. This huge exodus of capital raises questions about the health of the cryptocurrency market and investor confidence in the digital asset par excellence.

Context and Relevance of Bitcoin Cash ETFs
Spot Bitcoin ETFs have gained popularity as a secure and regulated way for investors to access the leading cryptocurrency without needing to own it directly. This type of product has helped bring Bitcoin to a wider audience, comprising both institutional and retail investors.

Recent Exit Data: $287 Million in a Single Day
Last Tuesday was a critical day for U.S. spot Bitcoin ETFs. According to SoSoValue data, the net outflow of $287.78 million was the highest in four months and was a stark contrast to recent capital inflow trends. This huge fund movement underscores a possible reassessment of investor sentiment towards the cryptocurrency market, particularly at a time when Bitcoin is struggling to retain key support levels.

Bitcoin Plunges Towards USD 55,000
Bitcoin (BTC) sank in price below USD $57,000 on Tuesday, after starting the day above USD $59,000 and before correcting further towards the USD $55,000 area in the afternoon. The star digital currency lost the day’s initial gains following the release of a report anticipating possible rate hikes in Japan.

Bank of Japan Governor Kazuo Ueda signaled that the central bank could continue to raise interest rates if the economy and inflation develop as expected, Bloomberg reported on Tuesday. While Bitcoin remained in the $59,000 range, the news was accompanied by a sharp pullback in the cryptocurrency market. Ethereum-based spot ETFs, meanwhile, met a similar fate, collectively recording a net capital outflow of USD 47.4 million on Tuesday, according to the same data source.

At the time of publishing this article, BTC was changing hands around $56,500, down 4.5% over the past 24 hours and a loss of 5.7% for the week, according to data from CoinMarketCap. Ether (ETH) is moving around $2,400, with similar percentage losses over the same period amid a 4% daily drop in total cryptocurrency market capitalization.

Dollar Dips on Gains, Fears Ahead of Upcoming Jobs Data

The U.S. dollar retreated on Wednesday in the wake of the latest reports on U.S. economic activity, which stoked concerns about a possible sharp economic slowdown, a so-called hard landing, ahead of the jobs report due on Friday.

Dollar Traders Uneasy Ahead of Jobs Report
On Tuesday, the ISM report on U.S. economic activity came in lower than expected, increasing uncertainty about a possible economic slowdown in the world’s largest economy. The data triggered a sharp sell-off on Wall Street, adding to traders’ concerns ahead of Friday’s release of crucial monthly payrolls data.

As a result, the dollar, a traditional safe-haven currency, rallied to a two-week high against the euro. The move was due to concerns about the implications of the data for Federal Reserve policymakers, who meet at the end of the month.

Markets expect a possible 25 basis point cut at the next Fed meeting, scheduled for September 17-18. However, weak labor market data could significantly increase the likelihood of a more aggressive 50 basis point cut, which could have a negative impact on the dollar.

Euro Moves Away from Two-Week Lows
EUR/USD rose 0.1% to 1.1056 after falling 0.2% on Tuesday and touching its lowest level in two weeks amid a massive sell-off in risk assets.

Data released earlier in the session showed that eurozone manufacturing activity remained in contraction territory in August, while activity in the services sector also disappointed early Wednesday, although it remained in expansion territory.

“We continue to expect EUR/USD to hold above 1.1000 until Friday’s US services ISM and payrolls data are released. If our forecasts for a weaker payrolls data are confirmed, we could see the pair bounce above 1.110 towards the end of the week,” analysts at ING (INGA) said in a note.

GBP/USD was up 0.1% at 1.3125, following a 0.2% decline overnight.

Sterling posted a solid August, up more than 2%, helped by expectations that the Bank of England will keep interest rates higher for longer relative to the U.S. and eurozone.

The Yen Appreciated Due to Its Safe-Haven Status
In Asia, USD/JPY eased 0.6% to 145.20, with the Japanese yen recovering as a safe haven after the sharp fall on Wall Street and considerable losses on Asian bourses.

Meanwhile, the USD/CNY pair posted a 0.1% devaluation to 7.1138 in reaction to slowing growth in China’s services sector in August, a private sector survey released on Wednesday showed.

The Caixin/S&P Global Services Purchasing Managers’ Index fell from 52.1 in July to 51.6 in August.

U.S. stock markets trade higher on the back of a strong weekly sell-off

U.S. stocks rose on Monday, giving signs of a rebound on Wall Street after stocks ended last session lower following an August jobs report that left market traders uncertain about possible interest rate cuts by the Federal Reserve. .

According to a report released by analysts at Vital Knowledge, they do not believe the rate hike was motivated by any specific news released since Friday’s close, but rather by some downside buying driven largely by oversold conditions and anticipation of monetary support.

The major Wall Street averages fell on Friday just after the August payrolls numbers signaled a continued slowdown in the U.S. labor market, which is quite possibly an assurance that the Federal Reserve will sharply reduce borrowing costs at its next two-day meeting on September 17-18.

For the week, the benchmark S&P 500 index and the 30-stock Dow Jones Industrial Average posted their biggest weekly declines since March of last year, while the tech-heavy NASDAQ Composite index posted its most notable drop since January 2022.

Possible Fed rate cut in the spotlight
Investor bets that the Fed will cut rates by 25 basis points stand at 73% in Monday trading, according to CME Group’s FedWatch tool.

Meanwhile, the probability of a 59 basis point cut stands at 27% after briefly topping 50% in immediate response to the jobs data.

The odds highlight the uncertainty surrounding how the Fed will react to the jobs report.

On Friday, Fed Governor Christopher Waller mentioned that “the time has come” for the Fed to lower rates, although he remained open about the depth and pace of cuts.

Boeing shares rise ahead of market open after reaching tentative agreement with union
Boeing (BA) shares rose Monday in premarket trading after reaching a tentative agreement on a 25% wage hike for its main union, which is likely to avert a damaging strike that is a threat because it could increase pressure on the aircraft maker.

In addition to the wage increase, the proposed four-year agreement includes a commitment to build a new aircraft in the U.S. Pacific Northwest, improved retirement benefits and increased union involvement in aircraft quality.

The leadership of the union, which represents about 30,000 workers, has recommended that its members support the agreement. However, if it is refused and two-thirds vote in favor of the strike, the workers could organize a work stoppage at midnight on Friday.

A labor action would likely increase scrutiny on Boeing’s new CEO, Kelly Ortberg, who is currently on a mission to improve the company’s finances and rebuild its reputation after January’s dangerous mid-flight gate-plug rupture.

On the other hand, shares of cryptocurrency-linked stocks posted positive numbers ahead of the market open. Bitcoin, the most important cryptocurrency in the market increased its share price on Monday, managing to extend its upward momentum for the third day in a row.

Oil prices rise
Oil prices held on to Monday’s gains as traders watched the effect of a possible hurricane on the U.S. Gulf Coast and the market’s response to last week’s nonfarm payrolls report.

The U.S. National Hurricane Center indicated over the weekend that a weather system in the Gulf of Mexico is expected to develop into a hurricane before hitting the northwest U.S. Gulf Coast, an area critical to U.S. refining capacity.

On the other hand, the possibility of lower interest rates also helped crude oil. Theoretically, lower financing costs could stimulate economic activity and boost demand for oil.

Market Highlights for the Week: Inflation, Earnings, ECB

This week will feature five key economic events that investors and analysts will be watching closely. From inflation reports to monetary policy decisions, each of these events could have a considerable effect on financial markets.

U.S. Inflation
The main event will be the August consumer price index (CPI) report, which will be released on Wednesday. Economists estimate a year-over-year increase of 2.6%. The Federal Reserve’s inflation target is around 2%, so this data will be decisive in deciding whether to cut interest rates at its next meeting in September.

This report will be the last major economic data before the Federal Open Market Committee (FOMC) meeting, which means that it could be decisive for the FOMC to opt for a quarter or half percentage point cut in the federal funds rate.

European Central Bank monetary policy decision
On Thursday, the European Central Bank (ECB) will announce its monetary policy decision. Markets anticipate that the ECB will cut its policy rate by a quarter of a percentage point, leaving it at 3.5%. This cut is explained by the slowdown in the pace of GDP growth in the euro zone, which has prompted the ECB to take stronger measures to stimulate the economy.

This will be the ECB’s second rate cut so far this year, following the start of its rate-cutting cycle in June. The ECB’s actions could affect European and global financial markets as investors adjust their portfolios in line with interest rate movements.

Oracle and GameStop results
Earnings reports will also play a crucial role this week. Oracle will release its fiscal first quarter 2025 results on Monday. Buyers will be watching to see how the company handles competition in the cloud sector and how it has affected the growth of its infrastructure-as-a-service offering. GameStop, meanwhile, will release its financial results on Tuesday.

With its shares up 6.83% the previous week, analysts are confident that the company will continue to showsigns of recovery from its period of financial turmoil. Both Oracle and GameStop will have a major impact on the performance of their respective stocks and the technology and video game sectors.

U.S. Producer Price Index (PPI) report
On Thursday, the U.S. Bureau of Labor Statistics will release the Producer Price Index (PPI) for August. The PPI is expected to rise 1.7% year-over-year, while the core PPI, which does not take into account food and energy prices, will rise 2.4%. These figures will be critical in assessing inflationary pressure in the economy from the production side and could influence the Federal Reserve’s monetary policy.

University of Michigan Consumer Confidence Index
On Friday, the University of Michigan will release its September consumer confidence index. The reading is expectedto be 68, similar to August.

Inflation expectations for the year ahead, which settled at 2.8% in August, will also be closely watched, as these figures reflect consumers’ hopes for the direction of the economy. Such an index is seen as a key barometer of overall U.S. consumer economic sentiment and could have an impact on household spending decisions and, consequently, the country’s economic growth.

Giant Japanese Power Company Explores Bitcoin Mining with Renewable Energy

A subsidiary of TEPCO, Japan’s leading electricity provider, is using waste solar energy for Bitcoin mining. Tokyo Electric Power Company (TEPCO) is entering the Bitcoin mining sector. Through its subsidiary, Japan’s largest electricity supplier has begun using excess renewable energy for Bitcoin mining. Agile Energy X, a wholly-owned subsidiary of TEPCO, is conducting experiments using surplus solar power to operate Bitcoin mining equipment, as reported by a local media outlet citing its CEO.

The company has installed mining equipment near solar farms in Japan’s Gunma and Tochigi prefectures to utilize energy that would otherwise be wasted. The initiative helps reduce the waste of green energy from solar and wind farms thatare forced to reduce their output to avoid overloading Japan’s grid. Kenji Tateiwa, founder and CEO, believes that the success of the project could encourage more investment in clean energy linked to Bitcoin mining.

Bitcoin mining will encourage green energy. According to the local newspaper, production control techniques in Japan led to the waste of 1,920 gigawatt-hours of energy in 2023, which is equivalent to the annual electricity consumption of 450,000 households. Agile Energy X has run simulations indicating that if renewables supplied half of Japan’s electricity, up to 240,000 gigawatt-hours could be wasted annually.

Bitcoin Mining Could Generate $2.5 Billion Annually
Tateiwa stressed that the benefits of this activity could contribute to corporate profits, while incentivizing more companies in the country to replicate the effort in pursuit of sustainability. “Green energy producers have to operate their businesses under the assumption that some of the energy they generate is wasted,” Tateiwa said. “If bitcoins were to provide a new source of revenue to similar energy producers, who are exposed to excessive investments, that would bring in more green energy.”

Other countries, companies in the energy sector have applied similar approaches to obtain resources with which to mine bitcoins. In El Salvador, for example, geothermal energy from its volcanoes is being used to generate cryptocurrencies, while in Argentina, surplus waste gas from the oil industry is being used. The United States, especially Texas, is another country where renewable energy is used to balance the grid.

One example is the project of Marathon Digital Holdings, the world’s largest Bitcoin mining company, which has embarked on a new project that will heat an entire city in Finland with recycled heat generated from Bitcoin mining. TEPCO’s approach to the cryptocurrency industry is not new.

Agile Energy’s efforts are in response to a more general shift in Bitcoin mining toward green energy. A report by Coinshares noted that Bitcoin miners use renewable energy in remote areas and actively seek the cheapest energy. Data shows that 56% of miners now use renewable energy for their operations. Daniel Batten, an environmental analyst specializing in Bitcoin, noted that BTC’s sustainable energy mix has increased by 6% year-over-year, more than any other industry.

Dollar Stabilizes in Anticipation of Fed Rate Cuts

The US dollar remained stable on Monday, as investors waited for the Federal Reserve’s next interest rate decision, expected by the end of September. Meanwhile, the Japanese yen, a safe-haven currency, fell slightly, losing some of its recent gains amid uncertainty over the size of the Fed’s expected rate cut.

Last week’s U.S. employment report did not clearly indicate whether the Fed would opt for a standard 25 basis point cut or a more aggressive 50 basis point cut at its next policy meeting. While employment growth in August was lower than expected, the unemployment rate declined and wages continued to rise, pointing more to a slow cooling rather than a rapid slowdown in the labor market.

Currency markets saw limited movement in early Asian trading, stabilizing after some fluctuations following the release of Friday’s nonfarm payrolls data. The yen was down 0.26% to 142.65 against the dollar, partly retreating after last week’s 2.73% rise on increased market caution.

The yen’s movement was not significantly influenced by Japanese economic data released on Monday, which showed that the country’s growth in the April-June period was slightly lower than initially expected, mainly due to reduced business and personal spending.

The euro rose 0.03% to $1.1089, and the British pound advanced 0.06% to $1.3138. The dollar index, which compares the greenback to a basket of currencies, was virtually unchanged at 101.21.

A global macro strategist at Convera stated, “With mixed signals from the labor market, it is unlikely the Fed will commit to a 25 or 50 basis point cut just yet.” Fed leaders have signaled a willingness to initiate a series of rate cuts, with the next meeting scheduled for September 17-18, as they recognize a slowdown in the labor market that could worsen without a change in policy.

Market futures currently point to a 35% chance that the Fed will cut rates by 50 basis points next week. The next major economic indicator that could shape market expectations will be Wednesday’s U.S. inflation report.

Macquarie’s chief economist anticipates a 25 basis point cut in September, with similar reductions likely in November and December, unless economic data indicate the need for larger cuts.

In the currency market, the Australian dollar rose 0.07% to $0.6675, recovering slightly from Friday’s more than 1% drop and a three-week low. The New Zealand dollar was flat at $0.6175, near its two-week low on Friday.