Global Markets Bounce Back, Posting First Weekly Gain in a Month
James Picerno | Aug 28, 2023 21:52
After three straight weekly declines, the Global Market Index (GMI) rebounded for the trading week through Friday, Aug. 25. This unmanaged benchmark holds all the major asset classes (except cash) in market-value weights via ETFs. It represents a competitive measure for multi-asset-class portfolio strategies.
Last week’s gain kept most markets firmly in the winner’s column for year-to-date results. US stocks (NYSE:VTI) remain the clear leader with a 15.2% gain. US bonds (NASDAQ:BND), on the other hand, are struggling to hold on to a weak 0.7% advance in 2023.
Despite last week’s gains for most markets, investors will likely tread cautiously in the weeks ahead following Federal Reserve Chairman Jerome Powell’s comments on Friday, when he advised that inflation “remains too high” while the world’s central bankers are debating if more rate hikes are needed to tame inflation.
Economic updates later this week will help shape market sentiment on these questions after the US government releases numbers PCE inflation figures for July (Thurs., Aug. 31) and payroll data for August (Fri., Sep. 1).
“We expect the [payrolls] report to show a moderating trend for job growth, with [recent labor] strikes also working to push the headline jobs figure lower,” writes JPMorgan’s chief US economist in a note sent to clients on Friday.
Meanwhile, Fed funds futures this morning are still pricing in moderately high odds that the central bank will leave its current target rate unchanged at 5.25%-5.50% at the next FOMC meeting on Sep. 20. But the current 79% implied probability for no change marks a moderate slide from recent history.
The market is also flirting with the possibility of a rate hike in November. For the first time, Fed funds futures are pricing in a slight bias in favor of a 25-basis-points increase for the Nov. 1 policy meeting.
Keep your eye on Thursday’s PCE inflation update as a possible catalyst for changing this outlook.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.