The recent jobs report has left investors uncertain about the Fed’s next move, with Waller’s remarks after the report expected to provide critical guidance. The market is closely watching AI stocks, bonds, and money flows in key ETFs, while investors are advised to consider protection bands to mitigate risks.
AGNC Investment Corp. (AGNC), a mortgage real estate investment trust (mREIT), is poised to benefit from the Federal Reserve’s anticipated interest rate cuts. While the company has faced challenges due to rising interest rates, the expected shift in monetary policy could improve its net interest spread, book value, and dividend prospects. However, investors should consider the company’s history of dividend cuts and its premium valuation before making a decision.
Investors are eagerly awaiting the August jobs report as a key indicator of the U.S. economy’s health. July’s report showed a slowdown in job growth and a rise in unemployment, raising recession fears. However, experts offer differing perspectives on the August data, with some expecting a rebound and others predicting continued softening.
US stocks closed higher on Friday, fueled by strong consumer spending and moderate inflation, suggesting a potential soft landing for the economy. Asian markets were mixed on Tuesday, with Japan’s Nikkei 225 closing higher while Australia’s S&P/ASX 200 declined. European markets were down in early trading, with the STOXX 50 index falling 0.48%. Oil prices fell due to concerns over weak economic growth in China, while the US dollar strengthened ahead of key economic data.
Bitcoin experienced a downturn on Monday, falling below $64,000 during European trading hours. The dip followed a brief rally driven by optimistic comments from Fed Chair Powell. Meanwhile, AI tokens like FET and TAO surged ahead of Nvidia’s anticipated earnings report, which is expected to be a blockbuster event. Bitcoin’s future remains uncertain with regulatory challenges, but some analysts are optimistic about its broader acceptance.
U.S. stock markets closed higher on Friday after Fed Chair Jerome Powell hinted at a potential interest rate cut in September, fueled by optimism about reduced inflation risks. The markets also saw gains in oil prices driven by concerns over the escalating Gaza conflict, potentially impacting regional oil supplies. Asian markets saw mixed performance, while European markets opened slightly lower.
The Bank of Japan (BoJ) reiterated its commitment to raising interest rates if inflation continues to align with its 2% target, despite recent market volatility. This hawkish stance, coupled with the prospect of US rate cuts, is creating a complex environment for the dollar-yen exchange rate. While the BoJ monitors market developments, it remains committed to gradually normalizing monetary policy, indicating further rate hikes are possible.
The cryptocurrency market saw sideways trading on Thursday, with investors cautious ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium. Bitcoin and Ethereum both saw minor fluctuations while the overall market capitalization increased marginally. Analysts are observing potential positive signs for Bitcoin, with mega whales accumulating aggressively and the formation of an ascending triangle suggesting a potential breakout.
The release of the July Federal Open Market Committee (FOMC) minutes has further solidified expectations for a rate cut at the upcoming September meeting. The minutes highlighted continued progress in disinflation, leading to a weakening of the US dollar and a surge in gold and cryptocurrency prices. The market is now pricing in a 61.5% probability of a 25-basis-point rate cut in September.
The S&P 500 and Nasdaq 100 indices ended Tuesday’s session with slight declines, marking the end of their best winning streaks since May 2024 and October 2023, respectively. Hawkish comments from Fed Governor Michelle Bowman regarding inflation and wage growth contributed to the negative sentiment.
