Interest Rate Cut Expectations Cool Down, US Stocks Hit New Highs, Is a Soft Economic Landing a "Blessing in Disguise"?

The stock market in Country M has reached new highs once again! However, let's not celebrate too soon. Recently, the expectations for interest rate cuts by the Federal Reserve seem to be cooling off, which is not good news. Everyone is speculating, what's really going on? Is the economic situation better than we think? Or is inflation about to rear its head again?

Inflation Data on the Horizon, Market on Edge

Everyone is holding their breath, as the CPI data for September in Country M is about to be released. The market expects the overall CPI to rise by 0.1% month-on-month, and the core CPI to rise by 0.2%. These numbers may not seem high, but who knows if there might be any pleasant surprises?

The Fed's Bigwigs Haven't Been Idle Lately

Dallas Fed President Lorie Logan recently spoke out in favor of slowing down the pace of interest rate cuts. As soon as these words were uttered, the market immediately reacted. Data from the Chicago Mercantile Exchange shows that the probability of a 25 basis point rate cut in November has already dropped to 89%. Everyone is wondering, is the Federal Reserve going to let us down?

Advertisement

The US Dollar Takes the Lead, Global Economy Takes a Hit?

Speaking of which, the US dollar has been riding high recently. The US Dollar Index has been on a roll, setting a record for the longest consecutive rise in nearly three years. This has caused headaches for other countries. The European Central Bank, seeing the situation as dire, is expected to lower the deposit rate to 3.25% and implement another 25 basis point rate cut.

However, US stocks are delighted. The S&P 500 Index has reached an all-time high. Everyone is saying, does this mean that Country M's economy is going to have a soft landing? But is this "soft landing" really a good thing? Could it turn out to be a "blessing in disguise"?Crude Oil Market Takes a Sharp Turn, Adding Uncertainty to the Middle East Situation

When it comes to the economy, we cannot overlook the crude oil market. Recently, the EIA has revised down its forecasts for crude oil demand and prices, suggesting that global oil demand growth might only reach 1.2 million barrels per day in 2024. As soon as this news hit the market, Brent crude oil futures immediately fell by 0.63%,报价 at $76.690 per barrel.

However, let's not forget the ongoing turmoil in the Middle East. Should the situation escalate further, oil prices could potentially skyrocket. This poses a significant threat to the global economy.

Gold Loses Its Luster, Treasury Yields Remain Low, Where Should Investors Turn?

Gold has also been underperforming lately. Spot gold fell by 0.46%,报价 at $2,610.020 per ounce. It seems that confidence in the US dollar remains strong.

Looking at the bond market, the yield on the US 10-year Treasury note is reported at 4.066%, while the 2-year Treasury note yield is at 4.009%. These yields may seem decent, but when compared to inflation, they still feel a bit on the losing side.

For the average investor, this situation is indeed a bit perplexing. Should one bet on the continued rise of the US stock market, or should one wait and watch for better opportunities?Please provide the text you would like me to translate into English.