Weekly News 2023/09/25-2023/09/29

 U.S. stocks closed with mixed gains on Friday. The Dow Jones Industrial Average fell 158.84 points, or 0.47%, to 33507.50 points; the Nasdaq rose 18.05 points, or 0.14%, to 13219.32 points; the S&P 500 Index fell 11.65 points, or 0.27%. , reported 4288.05 points. The three major U.S. stock indexes had mixed gains and losses this week, with the Dow falling 1.34%, the Nasdaq rising less than 0.1%, and the S&P 500 falling 0.74%. All three major stock indexes posted losses in September and the third quarter. The Dow fell 3.5% in September. The Nasdaq fell 5.8% and the S&P 500 fell 4.9%, both recording their largest monthly declines since 2003. In the third quarter, the Dow fell 2.6%, the Nasdaq fell 4.1%, and the S&P 500 fell 3.6%.

In terms of economic data on Friday, one of the Fed's favorite inflation data showed that U.S. price increases in August were slightly lower than expected. The Bureau of Economic Analysis reported on Friday that the U.S. personal consumption expenditures (PCE) index rose 0.4% in August, indicating that inflationary pressures remain high. The U.S. core PCE price index in August increased by 0.1% month-on-month and 3.9% year-on-year.

Analysts pointed out that the PCE report showed that U.S. consumer spending rose in August, but underlying inflation eased, with the year-on-year increase in the index excluding food and energy slowing to below 4.0%. Data from the U.S. Energy Information Administration (EIA) shows that gasoline prices accelerated in August, hitting a peak of $3.984 per gallon in the third week of the month. As gasoline prices soared, the monthly PCE price index rose 0.4% in August after rising 0.2% in July. But underlying inflationary pressures are receding, which will be welcomed by Fed officials.

 French authorities said on September 29 that they had approved Apple's (NASDAQ: AAPL) software update for the iPhone 12, after controversy over the device's radiation levels led France to suspend sales of the phone earlier this month. It is also reported that Apple is continuing to research ways to make fabric touch-sensitive so that it can embed controls or detect gestures on other fabric-based products beyond Apple Watch straps or iPhone cases. This technology can be used on a variety of textile materials such as clothing, handbags, etc.

Next Monday, Microsoft (NASDAQ: MSFT) CEO Nadella will appear in court as a witness for the U.S. Department of Justice. This is a once-in-a-century courtroom encounter between Microsoft and Google (131.85, -1.28, -0.96%) fight. It is reported that the government may ask Nadella about Microsoft's efforts to expand the influence of the Edge browser and Bing search engine, as well as the obstacles posed by Google's dominance.

Nike (NASDAQ: GOOGL) announced first-quarter revenue of $12.94 billion, market expectations were $12.98 billion, and $12.69 billion in the same period last year; gross profit margin was 44.2%, analysts expected 43.7%. The company's first fiscal quarter inventory was US$8.70 billion, analysts expected US$8.84 billion; EPS was US$0.94, analysts expected US$0.75; Greater China revenue was US$1.74 billion, compared with market expectations of US$1.83 billion. Nike's CFO said that it expects second-quarter revenue growth to expand slightly year-on-year, and gross profit is expected to expand by 100 basis points year-on-year.

 The largest cryptocurrency by market capitalization trade at $26,800 on Friday, giving it a 3.2% return so far this month. However, BTC has fallen 1.6% since briefly touching $27,400 on Thursday. Bitcoin (BTC) remains on track to end its six-year losing streak in September, with a minor pullback ahead of a possible impending federal government shutdown potentially jeopardizing this month‘s gains. Extending this weak price action into the weekend could jeopardize BTC’s interim positive monthly returns, as the cryptocurrency started September at just around $26,000.

Ethereum (ETH) was little changed at around $1,660 as market participants anticipate a futures-based exchange-traded fund (ETF) to go live early next week.

The U.S. Securities and Exchange Commission (SEC) announced on Tuesday that it would postpone its decision on whether to approve ARK Invest and 21Shares‘ spot Bitcoin ETF applications until January 10, 2024. The previous decision announcement deadline was November 11 this year. The SEC also postponed its decision on whether to approve Global X’s similar application until November 21, 2023. The regulator said it needed more time to consider the proposed rule change and related issues that would allow ARK 21Shares spot Bitcoin ETF to trade on the Cboe BZX exchange. Meanwhile, other spot Bitcoin ETF applications from companies including BlackRock, Valkyrie, Invesco, Fidelity, VanEck, Bitwise and WisdomTree have also been postponed.

Bloomberg ETF analyst James Seyffart predicts that there may be more delays in the approval of spot Bitcoin ETFs in the near term, and the possibility of the United States approving spot Bitcoin in 2023 will be further reduced.

 This week, although the PCE price index has temporarily alleviated the risk of recurring inflation that people have been worried about, the dual risks of the U.S. government shutdown and the auto union strike have still dealt a heavy blow to market risk sentiment, which has caused risks such as the stock market and crude oil. Assets are under pressure again. On the other hand, although gold is supported by safe-haven buying, the “eagle” Federal Reserve has firmly pinned the U.S. dollar at a high level, which has greatly overshadowed the positive impact of safe-haven demand on gold.

After a slight adjustment in the US dollar, spot gold once fell below 1860. As of press time, spot gold is currently trading at $1,860.63 per ounce, down 0.21% on the day. Easing inflationary pressures in the U.S. pre-market are helping gold prices hold their ground, but they are not providing much new bullish momentum. After the PCE data was released, the price of gold rose slightly by $3 and was trading above 1970.

Separate data released on Friday showed that the consumer confidence index confirmed the data at the beginning of the month and was basically unchanged for the month, falling only 1.4 points from August but still 16% higher than the same period last year. Consumers' expectations for their personal finances fell slightly, but expectations for future business conditions improved, offsetting each other.

Technically, some analysts point to $1,840 to $1,850 as the next area to watch. Some analysts also said that there is still room for gold prices to fall to US$1,800 per ounce. However, the current weakness does not change the longer-term bullish outlook, as inflation remains high and the Fed's monetary policy threatens to push the economy into recession.

 This week, the overall international oil price showed a trend of first declining and then rising, with the weekly average price increasing and decreasing month-on-month. The average price of WTI this week was US$90.68/barrel, down US$0.10/barrel from the previous week, or -0.11%. On the one hand, expectations of a rate hike by the Federal Reserve have stoked concerns about the economic outlook, with investors worried that this could dampen economic growth and overall fuel demand. But total U.S. crude oil inventories, U.S. commercial crude oil inventories and Cushing area inventories all decreased, and international oil prices resumed their gains late in the week.

Multiple negative factors caused oil prices to fall back from their early highs during the week. First, after international oil prices reached their high point during the year, investors took profits, causing technical correction pressure on crude oil futures. Secondly, expectations of the Federal Reserve raising interest rates have triggered market concerns about the economic outlook. The Federal Reserve predicts that it may raise interest rates once more in 2023, and that the Federal Reserve will maintain high interest rates in 2024. Investors are worried that this may suppress economic growth and overall fuel demand. In addition, the economic outlook in Europe is not optimistic. The Purchasing Managers Survey released by S&P Global showed that the PMI index in the Eurozone was 47.1 in September, which has been below the 50 boom-bust line for four consecutive months. The economy is expected to shrink in the quarter, sparking concerns.

But on the other hand, Russia has issued a fuel export ban, temporarily banning the export of gasoline and diesel to all countries except the four former Soviet countries. The prospect of an expected reduction in energy supply has boosted oil prices to remain high.

 The euro is falling sharply, reflecting the broad strength of the U.S. dollar. This decline is not just a temporary blip, but a sign of a serious market breakdown and a major trend shift. Ongoing concerns about a potential recession in major European economies such as Germany and France continue to weigh on the euro. As long as the specter of recession hangs over the EU, there is reason to expect continued difficulties for the euro. In contrast, the United States presents a different economic landscape. While the Fed's recent interest rate decisions have remained steady, at least one more rate hike is expected. The Fed is also likely to maintain its hawkish policy for the long term. This policy divergence is likely to continue to drive capital flows from Europe to the United States, where investing is considered safer and more profitable.

The pound has fallen sharply in recent days, continuing its downward trend. Current market conditions suggest a possible pullback to the 1.20 level, which may extend to the 1.1850 level in the longer term. It would be wise to view every bounce as a potential selling opportunity, as the 1.2350 level above is expected to provide significant resistance, a trend observed in previous market behavior. In this case, GBP/USD may continue to struggle.

The Australian dollar continued its decline, reflecting the prevailing negative sentiment in the market. Previous support at the 0.6350 level saw a midday bounce, making it a key focus. A break below this level could spell trouble for the Australian dollar, which could lead to further losses towards the 0.62 level. Notably, the Australian dollar is closely tied to overall risk appetite in commodity markets and global growth.

OnePro Special Analyst

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