HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
MultiBank Group information and reviews
MultiBank Group
84%

Stock market correction picks up speed


25 July 2024 Written by Raffi Boyadjian XM Investment Analyst Raffi Boyadjian

Stocks' weakness intensifies

Stocks are under severe pressure as the main US equity indices recorded yesterday their worst daily performance since late-2022. Considering the fact that yesterday’s US PMI surveys were mixed, and therefore not the trigger for this move, the cause of the continued weakness in equities runs deep. Technology stocks led the correction as the market is increasingly nervous about the much-expected Fed rate cut and the US presidential election.

Having said that, the US calendar is rather busy today with the release of the preliminary GDP print for the second quarter of 2024 and the June durable goods orders report. A strong set of figures would most likely eliminate the small chances of a dovish shift at next week’s Fed gathering, but the market will probably continue to fully price in a September rate cut.

US Presidential race hots up

The US Presidential election continues to dominate newswires as the rhetoric from both candidates is expected to become more heated. VP Kamala Harris is enjoying a significant inflow of funds as the first polls appear to favour her. There is still a question mark about former President Obama’s role in the current campaign with analysts highlighting that a public declaration of support in favour of Harris could prove pivotal for the outcome of the November contest.

Dollar benefits from euro weakness

In the meantime, the euro remains on the backfoot against the US dollar as recent data have been weak in the euro area. This situation plays into the hands of the ECB doves who have been openly supportive of the current market pricing of two more rate cuts in 2024. Next week’s preliminary inflation report could go a long way towards convincing the stubborn hawks about the necessity of another rate cut, if inflation manages to produce a downside surprise.

BoC announces back-to-back rate cuts

The Bank of Canada confirmed expectations for a second consecutive rate cut. The expected moderation of inflationary pressures combined with a weaker economic outlook and a softer labour market allowed Governor Macklem et al to announce another rate cut.

Considering their view that in the US the anticipated economic slowdown is materializing and inflation is possibly resuming its downward path, the BoC has kept the door open for more action down the line. The loonie remains under pressure with the 2024 low at 1.3845 per US dollar being around the corner.

China surprises with another rate cut

The PBoC surprised during the Asian session with a 20bps cut to the MLF rate following Monday’s LPR 10bps rate cut. The MLF is the benchmark rate that banks can use to borrow funds from the PBoC for periods up to 1 year. These announcements could be part of the plan agreed at the recent plenary session meeting of the 20th National Congress of the Communist Party of China, but the market is clearly worried whether these actions can successfully treat the housing sector issues.

In the meantime, gold's retreat continues, erasing rather quickly the mid-July rally, and bitcoin is hovering around the $64k market. But the aussie and the kiwi continue to suffer, with the former completing nine consecutive red candles, the longest negative streak since August 2019.

By XM.com

#source


RELATED

Dollar is under pressure, eyes US data for a recovery

With the US dollar underperforming across the board during yesterday's session and US stock indices failing to make new all-time highs, the focus turns to the US labour market report.

6 Dec 2024

Fed may cut rates in December, French politics in limbo

The US dollar traded mixed against its major peers yesterday, but it seems to be on the front foot against most of them today.

4 Dec 2024

Dollar starts off the month on the right foot

With US market participants returning rejuvenated from the long weekend, an important week commences, essentially marking the start of a period up to December 19, when the last central bank meetings for 2024 will be held.

2 Dec 2024

Dollar pulls back ahead of key inflation data

Dollar traders lock gaze on PCE inflation numbers. Inflation stickiness could increase Fed pause chances. Yen strengthens on safe-haven demand.

27 Nov 2024

Dollar rebounds, loonie tumbles on Trump tariff threats

The US dollar recharged today after US President-elect Donald Trump said that he will impose a 25% tariff on all imports from Canada and Mexico and that he will charge an additional 10% on Chinese goods.

26 Nov 2024

Geopolitics and Trump's cabinet selections guide market sentiment

Possible ceasefire in Lebanon, gold dives. A shortened week in the US due to Thanksgiving celebrations. Dollar loses ground against euro and yen; bitcoin fails at $100k.

25 Nov 2024

Geopolitics dictates market sentiment, but dollar fails to benefit

The markets reacted negatively to the perceived escalation and the aggressive rhetoric from both sides, with gold recording its best two-day rally since early March, when the markets were mentally preparing for the Fed rate easing cycle.

20 Nov 2024

Stocks cautiously edge up amid geopolitical and inflation risks

Equity markets were in a perky mood on Tuesday as a recovery on Wall Street helped Asian stock markets advance, although European shares were more mixed.

19 Nov 2024

US CPI report could reverse the post-election euphoria

President-elect Trump is gradually assembling his cabinet, with the market anticipating the most crucial appointment, the Treasury Secretary.

13 Nov 2024

Positive sentiment lingers despite mixed newsflow

The markets continue to digest Trump’s victory and last Thursday's Fed dovish rate cut, with most market participants now speculating on the course of action of the new administration as the president-elect is assembling his cabinet.

11 Nov 2024

Dollar pauses rally ahead of Fed, BoE meets as well

After hitting a four-month high on the heels of Donald Trump's return to the White House, the dollar is pulling back today, as traders may have decided to lock some profits after the sharp rally and ahead of the Fed decision later today.

7 Nov 2024

Dollar and stocks surge on Trump victory bets

The dollar skyrocketed during the Asian session today, and it appears to be headed for its biggest one-day gain since March 2020.

6 Nov 2024

Volatility returns with a vengeance ahead of key US events

The recent, relatively quiet, market sessions were interrupted yesterday, with a strong correction recorded in both equities and gold.

1 Nov 2024

Dollar maintains gains amidst fragile market conditions

Market participants are gradually preparing for an action-packed week, with Friday’s US jobs report being the key event, that also includes some major earnings releases. Alphabet will report today, followed by Microsoft and Meta tomorrow, and Amazon and Apple on Thursday.

29 Oct 2024

Tensions remain high in equities

The next Fed meeting will be held two days after the election date and, assuming an eventless election process occurs, Chairman Powell et al will evaluate the progress made since the September aggressive rate cut.

25 Oct 2024

Demand for safe assets lingers

The US dollar continues to enjoy strong demand, outperforming its main counterparts. In particular, euro/dollar is trading at the lowest level since early August, and dollar/yen is hovering a tad below the 151 area.

22 Oct 2024

Strong US data keep the dollar in demand

The euro suffered another weak session yesterday, with the euro/dollar pair dropping below the key 200-day simple moving average and euro/pound fully erasing the recent UK CPI-induced correction.

18 Oct 2024

US dollar and stock rally continues

Both the US dollar and main US equity indices enjoyed another strong session yesterday.

15 Oct 2024

Dollar baffled after mixed data and Fedspeak

China might have played a key role in gold’s performance, but, at the same time, it offers little assistance to the oil rally as the market remains very pessimistic about the impact of the new set of Chinese support measures.

11 Oct 2024

Dollar stands tall after robust jobs report

Strong US data dent chances of a 50bps Fed rate cut; Plethora of Fed speakers on the wires today. Dollar enjoys strong gains, stocks rally unexpectedly. Oil pushes higher as gold's retreat continues.

7 Oct 2024


Editors' Picks

Regulation Matters: Why a Licensed Forex Broker Should Be Your Top Priority

Choosing a regulated broker is not just a matter of preference; it is a necessity for safeguarding your investments and ensuring that you trade in a fair and secure environment.

Automating Success: The Benefits and Risks of Using Forex Expert Advisors

This article explores the benefits and risks associated with using Forex Expert Advisors, providing insights into how traders can maximize their potential while mitigating potential downsides.

Best Forex Brokers 2024

By prioritizing factors such as overall rating, regulatory compliance, trading conditions and platform reliability traders can make an informed decision that aligns with their trading needs and aspirations, setting the stage for a potentially prosperous trading journey.

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

Best Forex EAs 2024 – Forex Expert Advisors Rating

Expert Advisors (EAs) Rating features high-quality Free and paid Forex EA most popular on the market today.

XM information and reviews
XM
82%
FP Markets information and reviews
FP Markets
81%
FXTM information and reviews
FXTM
80%
AMarkets information and reviews
AMarkets
79%
Octa information and reviews
Octa
79%
BlackBull information and reviews
BlackBull
78%

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.