Global investors are powering through the U.S. government shutdown, and the suspension of a key data release from the Bureau of Labor Statistics, as stocks extend their record-setting rally into early October.The BLS was due to publish its September jobs report at 8:30 a.m. Eastern time, but the ongoing government shutdown will delay that release indefinitely.Curiously, despite a weaker-than-expected reading for private job creation from payroll processing group ADP earlier this week, and data from Challeng ...

Core Viewpoint - The upcoming jobs report from the Bureau of Labor Statistics may be delayed if Congress fails to reach a funding agreement by the specified deadline [1] Group 1 - The jobs report is scheduled for release on Friday [1] - The release of the jobs report is contingent upon Congress reaching a funding agreement by Tuesday night [1]

Group 1 - Gold prices are nearing historical highs around $3,700, driven by rising expectations of a Federal Reserve rate cut, which negatively impacts the dollar and benefits gold as a non-yielding asset [1][4] - The XAU/USD pair shows strong upward momentum despite being in an overbought condition, with the Relative Strength Index (RSI) approaching 80, indicating potential for further gains [3] - Support levels for gold are identified at $3,642, while resistance levels are noted at $3,720, reflecting the current trading dynamics [4] Group 2 - The market is closely monitoring the Federal Reserve's upcoming policy decision, with expectations for a 25 basis point rate cut in 2025, influenced by recent U.S. inflation data [4] - The decline in U.S. Treasury yields, currently at 4.03%, has contributed to the rise in gold prices, as lower yields make gold more attractive [5] - Upcoming economic data releases, including U.S. retail sales and employment reports from Australia, are anticipated to impact market sentiment and gold prices [4]

Group 1 - Morgan Stanley significantly adjusts its interest rate forecast for the Federal Reserve, expecting a faster pace of rate cuts in response to soft inflation and employment data [1][2] - The new prediction includes four consecutive rate cuts of 25 basis points each in September, October, December, and January, totaling a 100 basis point reduction [1][2] - If this forecast is realized, the target range for the federal funds rate will reach approximately 3.375% by January, aligning with the upper limit of the long-term neutral rate estimated by most Federal Reserve officials [1][2] Group 2 - After the "four consecutive cuts," Morgan Stanley anticipates the Federal Reserve will pause to assess data and its distance from the neutral rate [2] - The firm believes that the ultimate federal funds rate will reach 2.875%, indicating that the current rate is already close to the neutral rate by about 100 basis points [2] - The report suggests that while a 75 basis point cut this year or a one-time 50 basis point cut this month is technically feasible, the downward adjustment will primarily consist of coherent 25 basis point cuts to "more decisively return to neutral" [2]

Core Viewpoint - The August employment report appears to set the stage for a 25 basis point rate cut by the Federal Reserve in September, potentially even leading to speculation about a 50 basis point cut, although there are reservations about the data's reliability [1] Employment Data Analysis - Historical trends indicate that August employment reports often fall short of consensus expectations and are subsequently revised upward [1] - The response rate for this month's survey is the lowest for August since 2000, and the seasonal adjustments appear unusually large [1] - It is anticipated that employment growth reached a low point in June and will gradually improve in the coming months as revised data becomes available [1] Labor Market Dynamics - The rising unemployment rate signals that the pace of labor demand reduction is outpacing labor supply [1] - This trend reinforces the likelihood of a rate cut in September [1]

Core Viewpoint - A Wall Street strategist suggests that despite a recent market rally due to signals of interest rate cuts from Federal Reserve Chairman Jerome Powell, upcoming economic indicators, particularly the August Consumer Price Index (CPI) and employment report, could lead the Federal Open Market Committee (FOMC) to delay more accommodative monetary policy if they exceed expectations [1] Group 1 - The strategist maintains a target price for the S&P 500 index, predicting it will reach 6600 points by the end of 2025 and 7700 points by the end of 2026, with a subjective probability of 55% for this baseline scenario [1] - If the Federal Reserve cuts rates in September as expected, a stronger "bull market" could push the S&P 500 to 7000 points before the end of 2025 [1] - By 2026, the driving force behind the bull market is expected to shift towards corporate earnings [1]

Core Viewpoint - Federal Reserve Chairman Jerome Powell indicated that there are two upcoming employment and inflation reports before the next meeting, which will guide future decisions [1] Group 1 - The Federal Reserve is closely monitoring employment and inflation data [1] - The outcomes of the two reports will influence the direction of monetary policy [1]

Core Viewpoint - The upcoming Federal Reserve meeting is under unprecedented pressure due to political tensions, changing trade policies, and conflicting economic signals, with significant data releases on GDP and employment expected to influence policy direction [1] Economic Data Summary - The U.S. GDP annualized growth rate for Q2 is projected to reach 2.4%, a significant improvement from the contraction of 0.5% in Q1, primarily driven by a sharp reduction in the trade deficit [1] - The July non-farm payroll report is anticipated to show a cautious hiring trend among businesses, with new job additions expected to slow down following a surge in the education sector in June, and the unemployment rate may slightly rise to 4.2% [1] - The June personal income and spending report is expected to indicate a slight acceleration in the core inflation metric favored by the Federal Reserve, suggesting that tariffs are gradually being passed on to consumers [1]

Core Viewpoint - The Reserve Bank of Australia's Governor Bullock does not believe that the employment report will alter interest rate decisions [1] Group 1 - The employment report is not expected to influence the Reserve Bank's monetary policy [1] - Bullock's stance indicates a focus on broader economic indicators rather than just employment data [1]

Group 1: U.S. Stock Market Dynamics - The U.S. stock market is experiencing significant volatility, with a rotation between technology and value stocks. Interest rate-sensitive stocks are rebounding due to expectations of rate cuts, while concerns about economic slowdown impacting corporate earnings are rising [3] - The forward P/E ratio of the S&P 500 index is currently at a historically high level, reflecting market expectations for policy easing [3] Group 2: Gold Market Trends - International gold prices are showing two-way volatility, indicating market divergence in interpreting Federal Reserve policies. Traditionally, gold prices have an inverse relationship with real interest rates, but both have recently risen simultaneously, suggesting a new pricing logic for gold amid geopolitical tensions and a reshaping of the dollar system [4] - Global official gold reserves are continuously increasing, which may provide long-term support for gold prices due to structural changes in demand [4] Group 3: Cryptocurrency Market Behavior - The cryptocurrency market is exhibiting differentiated performance compared to U.S. stocks and gold. Bitcoin prices have stabilized after significant fluctuations, indicating the development of an independent price discovery mechanism in the crypto market [5] - The actual usage of decentralized finance applications is steadily increasing, potentially providing fundamental support for digital asset prices [5] Group 4: Market Uncertainties and Asset Allocation - The primary uncertainty in the market revolves around the timing and magnitude of the policy shift by the Federal Reserve. While inflationary pressures have eased, a strong labor market may limit the Fed's policy options [6] - Different asset classes exhibit varying sensitivities to policy changes, with U.S. stocks being most responsive to interest rate expectations, gold reflecting safe-haven attributes, and cryptocurrencies developing unique market logic [6] - The current market environment may lead to increased volatility, necessitating a balance between short-term trading opportunities and long-term asset allocation strategies [6]