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Stocks Rose Ahead of the Fed’s Interest Rate Decision

Published 2024/09/18, 08:30
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The FTSE/JSE All Share Index saw its biggest gain in over a month, rising by 1.25% to 83 032 points as global markets firmed. Investors assessed economic data ahead of the Federal Reserve's meeting later today, with US retail sales unexpectedly rising by 0.10% in August, beating forecasts of a 0.20% decline, indicating robust consumer spending. The rand lost its footing, weakening to R17.65/$ at 18h00.

US stocks remained largely unchanged on Tuesday as uncertainty grew over the size of the anticipated interest rate cut. Both the S&P 500 and Dow Jones closed flat after hitting record highs, while the Nasdaq edged up by 0.20%. The FOMC's two-day meeting is underway, with traders expecting the Federal Reserve to announce its first rate cut since 2020. However, opinions are split on the scale of the reduction, with the chances of a 50-basis point cut standing at over 60%.

In Europe, the STOXX 50 and STOXX 600 rose by 0.60% and 0.40%, respectively, recovering from the previous session's losses as traders awaited key central bank decisions. Meanwhile, Germany's ZEW economic sentiment dropped sharply, hitting an 11-month low and missing market expectations.

In Asia, the Hang Seng surged 1.40%, reaching a two-week high of 17 660, marking its fourth consecutive session of gains. All sectors participated in the rally, with the property index jumping over 2% on optimism that US rate cuts will spur property purchases in Hong Kong. Conversely, Japan's Nikkei 225 Index fell by 1.03% to 36 203, posting a second straight loss as the technology sector dragged the market down in post-holiday trading.

In commodities, WTI crude oil futures rose 1.50%, settling at $71.19 per barrel, marking two days of gains. Gold steadied around a record high of $2 580 per ounce, supported by a weak US dollar and expectations of a significant rate cut by the Fed.

PSG Wealth Daily Investment Update, 18 September 2024

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