Good morning,
Wednesday was a choppy session in the wake of the CPI print which was released prior to the market open. Core CPI (which excludes food & energy costs) came in at +0.3%, which was higher than consensus expectations for a +0.2% rise. This slightly hotter-than-expected print disappointed the market, effectively ruling out a 50 bp cut next week. Inflation is still proving sticky, but the trend is still to the downside, especially with oil prices back below $70. The jobs data is, however, going to dominate and be influential on the Fed in the coming months.
The benchmarks fell sharply on the open with the S&P500 down as much as 1.8% at the session lows before recovering throughout the day to close over 1% higher. It was a big intraday reversal, with the market changing course after the first debate between Harris and Trump and a boost from Nvidia.
The S&P 500 gained 1.07% to close at 5,554 after touching a low of 5,406 during the session. The Nasdaq Composite gained 2.17% while the Dow Jones added 0.31%. Bonds came for sale. Tech dominated, with Nvidia surging by over 8%. Sentiment also improved after the first debate between Harris and Trump, which some considered favoured the Democrats while others felt that the moderators were biased. November is shaping up to be a very close run race. After the presidential debate, pricing for a Trump victory was at 48 cents on the online betting site PredictIt and at 55 cents for a Harris win.
The SPX experienced a big intraday reversal on Wednesday, with the benchmark bouncing off the 100-day moving average.
Carpe Diem!
Angus
Disclosure: Fat Prophets and its affiliates, officers, directors, and employees may hold an interest in the securities or other financial products relating to any company or issuer discussed in this report. Fat Prophet’s disclosure of interest related to Investment Recommendations can be provided upon request to members@fatprophets.com.au.
Chart Source: Thomson Reuters.
