News 2024-10-06 113 Comments

Buckle Up: Next 10 Days Crucial for Global Markets

Over the next 10 days, a series of blockbuster events are set to densely explode onto the scene, potentially triggering a rollercoaster mode for the market?

This Wednesday, the U.S. Treasury Department will announce the U.S. debt "quarterly refinancing" plan, and on Thursday and Friday, the U.S. September PCE price index and the October non-farm report are about to be released. At the same time, the U.S. stock earnings season is entering its peak, with five of the "Mag 7" giants—Google, Microsoft, Apple, Meta, and Amazon—scheduled to release their Q3 reports this week.

Next week, the market will also witness the Federal Reserve's interest rate decision, with the Fed currently in a pre-meeting quiet period.

The onslaught of major events is bound to have an impact on the U.S. stock market and even the global market. Analyst Cameron Crise warns that the market needs to prepare for potential剧烈 volatility.

Regardless of whether you focus on macro or micro, it's best to buckle up this week. Five out of the seven major U.S. companies will announce their earnings from Tuesday to Thursday, and Eli Lilly will also release its earnings, meaning that six of the S&P's top ten companies will be releasing market-moving news. Coupled with the PCE and non-farm data, this could be a potential source of significant volatility.

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So far this year, five large technology companies—Nvidia, Apple, Meta, Microsoft, and Amazon—have contributed approximately 46% of the S&P 500's gains. The current U.S. stock market is unprecedentedly concentrated, and the earnings data of large technology stocks this week will affect the overall market sentiment.

For the Federal Reserve's favorite inflation indicator—the PCE price index—and the October non-farm employment report, these could be key in influencing the Fed's November interest rate decision. Amid a cooling U.S. inflation backdrop, several Fed officials have emphasized in recent statements that the health of the U.S. labor force will be a focus.

The Fedwatch tool shows that the probability of the Fed cutting rates by 25 basis points on November 7 has risen to 96%, with a 3.7% chance of holding steady.

The market's expectations for a Fed rate cut have weakened, with U.S. debt experiencing a large-scale sell-off recently. The next 10 days will also be crucial for the U.S. debt market. The U.S. Treasury Department will announce the scale of the upcoming government bond issuance on Wednesday, with the market expecting the department to maintain a stable bond auction scale in the next quarter.

Sinead Colton Grant, Chief Investment Officer at New York Wealth Bank, stated: "This is a very important cycle, and a lot could happen in the next two weeks."

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