Economic Outlook - The Federal Reserve is at a critical juncture, balancing inflation concerns with labor market data indicating a cooling momentum [2][4][10] - A benign inflation report is anticipated, with only a slight increase expected, which may justify a near-term reduction in interest rates [3][13] Labor Market Insights - Recent job data revisions indicate a worse-than-expected jobs picture, with only 75,000 jobs added monthly over the past year [14] - Despite the cooling labor market, the unemployment rate remains low at around 4%, and initial jobless claims are stable [16][18] Consumer Behavior - Consumers are still relying on "buy now, pay later" options, indicating ongoing borrowing and spending despite economic slowdowns [7][18] - Retail sales have remained steady at about 4%, suggesting that consumption is holding up, albeit with a dichotomy between different income levels [17][18] Inflation and Monetary Policy - The Fed faces a potential stagflation scenario, where elevated inflation persists alongside a stagnant economy, complicating their policy decisions [10][11] - The market is anticipating a 25 basis point rate cut, but significant inflationary pressures could hinder further cuts [12][20][21] Market Reactions - Stock market averages reached highs, reflecting expectations for easier monetary policy, despite concerns about economic slowdown [5][6] - There is a disconnect between strong corporate earnings and the economic challenges faced by consumers, leading to mixed signals in the market [7][10]

Market Overview - U.S. stock futures showed mixed signals, with Dow Jones futures down 0.2%, S&P 500 contracts up 0.2%, and Nasdaq futures slightly above flat, indicating a cautious start after a record-setting rally driven by optimism about Federal Reserve rate cuts [1][7] - The next 48 hours are critical, with the Producer Price Index (PPI) and Consumer Price Index (CPI) releases expected to influence Federal Reserve policy decisions regarding potential rate cuts [3][8] Company Movements - Oracle's stock surged over 30% after forecasting its cloud backlog could exceed $500 billion due to significant deals with OpenAI, Meta, and xAI [10] - Synopsys experienced a significant decline, dropping more than 21% following disappointing guidance [14] - Other tech stocks, including AMD, Arista Networks, and NVIDIA, showed gains, reflecting ongoing demand in the AI and digital infrastructure sectors [11][12] Sector Performance - Defensive sectors, such as utilities and energy, demonstrated strength, with companies like Constellation Energy and GE Vernova benefiting from energy infrastructure demand [13] - The tech sector remained robust, with several chipmakers and infrastructure companies seeing positive movements, indicating sustained interest in AI-driven demand [11][12] Commodity Insights - Gold prices continued to rise, trading around $3,642.93 per ounce, supported by a weaker dollar and safe-haven demand amid inflation concerns and geopolitical uncertainty [15][21] - Analysts predict a near-term trading range for gold between $3,600 and $3,900, with potential for prices to reach $5,000 if concerns over Federal Reserve independence grow [16] Economic Context - The S&P 500 has increased nearly 30% year-to-date, driven by strong earnings, the AI boom, and expectations of monetary easing, although risks related to inflation and geopolitical tensions remain [18][22]

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Economist Justin Wolfers is sounding the alarm on the potential for stagflation, warning that proposed tariffs could inflict a painful combination of slowing growth and rising prices on the U.S. economy. ‘Two Bad Tastes At The Same Time’ In a recent interview, the University of Michigan professor cautioned that Americans could soon get "‘two bad tastes at the same time'—rising unemployment and rising infla ...

$BTC reclaimed $112,000 and european stocks rose at the open, as analysts increasingly downplay fears of stagflation and recession triggered by horrible U.S. jobs data. By @godbole17.https://t.co/wjIljubV5N ...

US stocks eyed fresh all-time highs on Wednesday as Oracle's (ORCL) blowout revenue forecast lifted AI hopes, as Wall Street waited for a wholesale inflation reading seen as unlikely to reset rate-cut bets. Futures on the S&P 500 (ES=F) climbed 0.3%, while those on the Nasdaq 100 (NQ=F) edged up 0.2%, on the heels of record closing highs. Contracts on the Dow Jones Industrial Average (YM=F), which includes fewer tech stocks, slipped 0.2%. Oracle stunned Wall Street as its CEO said its cloud revenue will ...

Market Overview - US stock futures showed mixed trading patterns as Wall Street awaited key economic reports that could influence the Federal Reserve's interest rate decisions and the overall economic outlook [1] - The Dow Jones Industrial Average futures decreased by 0.2%, while S&P 500 futures increased by approximately 0.2%, and Nasdaq 100 futures remained just above the flat line [1] Corporate Earnings and Performance - On Tuesday, stocks reached new record highs following a revision of US job numbers indicating a slowdown in the labor market, reinforcing investor expectations for a rate cut at the Fed's upcoming meeting [2] - Oracle's shares surged nearly 30% in premarket trading after the company raised its forecast for AI-driven cloud revenue, projecting Cloud Infrastructure sales to reach $144 billion by 2030, a significant increase from the current year's estimate of $18 billion [6] - GameStop reported over a 20% increase in quarterly revenue, leading to a jump in its stock price [2] Economic Indicators - Concerns are emerging regarding whether a potential reduction in interest rates will be sufficient to support the stock market, particularly in light of persistent inflation above the Fed's 2% target [3] - The upcoming release of the Producer Price Index (PPI) and Consumer Price Index (CPI) will provide critical insights into inflation trends and their implications for interest rate cuts [3][4] Analyst Predictions - Barclays has raised its year-end target for the S&P 500 to 6,450 from 6,050, citing stronger-than-expected corporate earnings, resilient economic growth, and optimism surrounding artificial intelligence [4]

Group 1 - The investing group Reading the Markets, led by Michael Kramer, provides daily commentary and videos to help members understand market drivers and trends [1] - The group offers education on macro trends, interest rates, and currency movements to assist members in making informed investment decisions [1] - Subscribers benefit from unprecedented access to expertise at a low subscription price compared to similar services [1] Group 2 - Michael Kramer is affiliated with Mott Capital Management but operates independently, providing his own analyses and opinions [3] - The report emphasizes that opinions and analyses are based on reliable information but do not guarantee completeness or accuracy [3] - Readers are advised to make independent investment decisions and consider their own financial situations before acting on the information provided [3]

Economic Indicators - The upcoming Consumer Price Index (CPI) report is anticipated to show a 0.3% monthly increase, raising the annual rate to 2.9%, with core CPI also expected to rise by 0.3% and remain at 3.1% year-on-year [3] - Wells Fargo economists indicate that core inflation is increasing due to broad-based strength across goods and services, suggesting persistent inflationary pressures [4] - The market has fully priced in a 25 basis points (bps) cut by the Federal Reserve, with a 10% chance of a 50 bps cut, contingent on the CPI results [4] Company Earnings - Kroger is expected to report earnings per share (EPS) of $1 on revenue of $34.13 billion, with bullish analyst sentiment as consumers shift towards value shopping [6] - Grocery sales are projected to increase as more consumers opt to eat at home, with tariffs driving up prices for many products [7] - OpenAI has significantly raised its spending forecast to $115 billion through 2029, with a focus on developing its own data center server chips to manage cloud server rental costs [9][10] Investment Opportunities - Analysts highlight that the AI sector is entering a new growth phase, with significant capital expenditure from Big Tech and expanding enterprise use cases [11] - Recommended AI software stocks include Palantir and MongoDB, while Nvidia and AMD are identified as top chip picks [12]

Company Performance - Lululemon shares are down 20% following a weak quarterly earnings report and a lowered outlook, citing difficulties due to tariffs impacting overseas manufacturing [5][7] - Broadcom shares are up 7% after reporting a 63% growth in AI sales and signing a $10 billion deal to supply AI chips to an unnamed customer, with shares up 109% from their closing low this year [5][7] Employment and Economic Indicators - The August jobs report revealed only 22,000 new jobs created, with the unemployment rate remaining at 4.3%, indicating a weakening jobs market [3][4] - Manufacturing jobs declined by 12,000 for the month and 78,000 for the year, despite companies planning significant investments in U.S. facilities [8] Market Trends - The upcoming Producer Price Index and Consumer Price Index reports are anticipated to provide insights into inflation trends, which are crucial given the current economic conditions [4][6] - The volatility in bond yields is noteworthy, with the 30-year yield recently nearing 5% before retreating to 4.78%, indicating market uncertainty [9]

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Global Macro Strategy with a specific emphasis on gold and Polish equities (WIG20) Core Insights and Arguments 1. **Gold Market Outlook**: - The macro conditions are bullish for gold due to rising stagflation risks in the US, with leading indicators suggesting further labor market weakness and increasing CPI components [2][10] - Strong global gold ETF inflows were observed post-Jackson Hole, indicating a shift towards gold as a hedge against economic uncertainty [2][10] - Spot gold has broken out of a four-month range, supported by strong ETF flows and performance during Asian trading hours, suggesting continued upward momentum [3][15] 2. **Investment Strategy**: - A new trade was initiated to buy gold spot at $3476.89 with a target of $3750 and a stop at $3330, risking $500k [8] - The strategy includes an overweight position in precious metals within the Global Asset Allocation portfolio, reflecting a bullish macro setup for gold [10][18] 3. **Polish Equity Market**: - The decision to close out the long WIG20 position was made due to negative domestic factors, including a rise in corporate tax on banks and the dismissal of Orlen's CFO, which undermined market sentiment [4][25] - The initial bullish outlook on WIG20 was based on strong corporate fundamentals and positive geopolitical developments, which have since deteriorated [25] Additional Important Content 1. **Technical Analysis**: - The correlation between gold returns and 10-year UST yields has shifted, indicating that gold may receive a flight-to-safety bid as inflation risks persist [12][16] - Historical backtesting shows that buying gold when gold mining stocks outperform has yielded better returns, reinforcing the current bullish stance on gold [18][21] 2. **Market Dynamics**: - The Fed's dovish stance and the potential for stickier inflation could lead to increased demand for gold as a hedge, especially as financial conditions remain loose [10][12] - The labor market's ongoing deterioration is expected to influence the Fed's policy decisions, further supporting gold prices [10] 3. **Risk Considerations**: - Risks to the gold trade include potential improvements in US labor data, which could impact gold's attractiveness as a hedge [8][10] - The Polish equity market faces significant headwinds from political and economic developments, necessitating a cautious approach [4][25]