Welcome to Extreme Investor Network, where we provide you with unique insights and valuable information on trading in the stock market. Today, we are diving into the recent market trends and what they mean for investors like you.
The big worry for the market was a growth slowdown, but continued relief on inflation is the market story this week. The July consumer price index report was the last hurdle needed to give the all-clear for a Federal Reserve rate cut in September. Prices excluding food and energy rose 0.2% month over month, in line with expectations. Year on year, they gained 3.2% — also in line. This relief on inflation has caused a shift in market expectations, with a 58.5% probability of a 25 basis-point cut in rates in September and a 41.5% chance for a 50 basis-point cut.
Investors are already adjusting their positions in anticipation of lower rates, with JPMorgan’s Treasury client survey showing net long positions among clients at their highest since December. Stocks are responding positively to this news, with semiconductors leading the charge.
Despite the growth scare that followed the jobs report, there are no signs of an imminent recession. The Atlanta Fed GDPNow model estimates GDP growth of 2.9% for the third quarter, and earnings remain steady. While there may be concerns about a slowdown in consumer spending, the overall outlook seems to suggest a soft landing scenario.
At Extreme Investor Network, we encourage investors to stay informed and adapt to market conditions. While there may be temporary fluctuations, it’s important to focus on long-term growth potential. Stay tuned for more updates and expert analysis on trading in the stock market.