Core Viewpoint - The U.S. Federal Reserve is facing a challenging situation with the risk of faster-than-expected inflation alongside weak job growth, raising concerns about the labor market's health [1][5][6] Economic Conditions - Powell indicated that while the economy shows resilience, the data is inconsistent and is trending towards a slowdown [4] - The job market's potential shift from a lack of hiring to layoffs is a concern, which could lead to a slowdown in consumer spending [5] Interest Rate Outlook - Powell provided little indication of when the Fed might next cut interest rates, highlighting the risks of cutting too quickly or too slowly [2] - Market participants have priced in expectations for interest rate cuts, but recent comments from Powell and other Fed officials have cast doubt on the likelihood of further cuts this year [3] Market Reactions - The S&P 500 index experienced a decline of 18.42 points, or 0.27%, closing at 6,675.44 [3] - Treasury yields decreased, with the 10-year note yield down 0.4 basis points to 4.141% and the two-year note yield down 0.2 basis points to 3.599% [3] - The dollar index initially strengthened but ultimately fell by 0.05% to 97.27 [3] Investment Considerations - The S&P 500 has seen three consecutive years of double-digit returns, but a strong catalyst is needed for further significant gains, which is currently unclear [6]

Core Insights - The article emphasizes the importance of in-depth research and insights for informed investment decisions in the Latin American equity market [1] Group 1: Company Analysis - The company has over 5 years of experience in equity analysis specifically focused on Latin America [1] Group 2: Industry Insights - The research provided aims to assist clients in navigating investment opportunities within the Latin American market [1]

Rising corporate earnings expectations are a bullish backdrop for stocks. According to Bloomberg Intelligence, more than 22% of companies in the S&P 500 provided guidance for their Q3 earnings results that are expected to beat analysts' expectations, the highest in a year. Also, S&P companies are expected to post +6.9% earnings growth in Q3, up from +6.7% as of the end of May.Fed Governor Michelle Bowman said, "Now that we have seen many months of deteriorating labor market conditions, it is time for the FO ...

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) is down -0.02%, influenced by dovish comments from Fed Governor Michelle Bowman regarding the need for decisive action to lower interest rates due to a weakening labor market [1][4] - The US Q2 current account balance showed a deficit of -$251.3 billion, which was smaller than the expected deficit of -$256.6 billion, providing some support for the dollar [3] - The September S&P manufacturing PMI for the US fell -1.0 to 52.0, which was weaker than the expected 52.2, contributing to the dollar's decline [1][3] Group 2: Federal Reserve and Interest Rates - Markets are currently pricing in a 91% chance of a -25 basis point rate cut at the next FOMC meeting scheduled for October 28-29 [4] - Fed Governor Michelle Bowman emphasized the need for the FOMC to act decisively in response to deteriorating labor market conditions [4] Group 3: Eurozone Economic Performance - The euro is down -0.03% after the Eurozone September S&P manufacturing PMI fell -1.2 to 49.5, which was weaker than the expected no change at 50.7 [5][6] - Despite the decline in manufacturing PMI, the Eurozone's September S&P composite PMI rose +0.2 to 51.2, marking the strongest pace of expansion in 16 months [5][6]

Core Insights - U.S. business activity showed slower expansion in a month when the Federal Reserve decided to cut interest rates [1] - There are indications that inflation fears may be alleviated due to a deceleration in firms' selling prices [1] Summary by Categories Business Activity - The pace of expansion in U.S. business activity has decreased compared to previous months [1] Federal Reserve Actions - The Federal Reserve's decision to cut interest rates coincided with the slower expansion of business activity [1] Inflation Indicators - Signs of deceleration in firms' selling prices suggest a potential cooling of inflation fears [1]

Corporate Earnings - More than 22% of S&P 500 companies provided guidance for Q3 earnings that are expected to beat analysts' expectations, the highest in a year [1] - S&P companies are expected to post +6.9% earnings growth in Q3, an increase from +6.7% at the end of May [1] Federal Reserve and Economic Indicators - Fed Governor Michelle Bowman emphasized the need for decisive action from the FOMC due to deteriorating labor market conditions [2] - The US September S&P manufacturing PMI fell -1.0 to 52.0, weaker than the expected 52.2 [2] Current Account and Gold Prices - The US Q2 current account balance was -$251.3 billion, better than the expected -$256.6 billion [3] - Gold prices reached a new all-time high, up more than 1%, driven by dovish global central banks and geopolitical risks [3] Stock Market Performance - The Dow Jones Industrials posted a new all-time high, while the S&P 500 and Nasdaq 100 are consolidating after recent rallies [3] - Energy producers are performing well, with WTI crude oil prices up more than 1% [12] Stock Movers - Firefly Aerospace (FLY) is down more than -13% after reporting Q2 revenue of $15.5 million, below the consensus of $16.1 million [10] - Vistra Corp (VST) is down more than -4% following a downgrade by Jeffries [10] - Halliburton (HAL) is up more than +5% as energy producers gain [12] - Kenvue (KVUE) is up more than +6% after controversy surrounding Tylenol [13] Economic Data and Forecasts - August new home sales are expected to decline by -0.3% m/m to 650,000 [5] - August core capital goods new orders are expected to slip -0.1% m/m [5] - The markets are pricing in a 91% chance of a -25 bp rate cut at the next FOMC meeting [6]

LIVE Dow Set to Open Up Ahead of Powell's Fed Speech Last Updated: 14 min ago Gold Hits Yet Another Record Ahead of Powell Speech By George Glover Gold extended its record-breaking run on Tuesday as investors waited for a speech by Federal Reserve Chair Jerome Powell. Futures climbed 1.1% to a record high of $3,816 an ounce in early trading. The precious metal is on its best three-day run since March, according to Dow Jones Market Data. The Fed lowered interest rates for the first time since December on Thu ...

Summary of Hong Kong Property Sector Conference Call Industry Overview - The conference call focused on the Hong Kong property market, particularly in light of recent interest rate cuts and their anticipated impact on home sales and mortgage costs [1][2][3]. Key Points and Arguments Interest Rate Cuts - The prime rate was reduced by 12.5 basis points to 5.125%, following a 25 basis point cut by the US Federal Reserve [1]. - The new residential mortgage rate is expected to decline to 3.375% from 3.5%, with projections suggesting it could further drop to around 2.7% by the end of 2026 [1][7]. - A cumulative 142 basis points cut by the Fed is anticipated through December 2026, which is expected to support residential transaction volumes [1]. Home Sales Projections - Historical data indicates that a 100 basis point cut in HIBOR correlates with an approximate 8% increase in home sales [2]. - With the expected decline in HIBOR to 2.2% by the end of 2025 and 1.6% by the end of 2026, home sales are projected to increase by an additional 14% over the next 12 months compared to the previous year [2]. Market Dynamics - Private residential transactions have increased by 13-15% year-to-date, with annualized volumes potentially reaching levels comparable to 2018-2019 [3]. - Despite the increase in transaction volumes, pricing remains subdued, with the CCL index largely flat due to high near-term supply [3]. - Buyers are hesitant to accept price increases, as evidenced by low sell-through rates for new projects launched at higher prices [3]. Developer Performance and Recommendations - Developers such as Sino, Henderson, and Kerry are expected to outperform peers like SHKP due to their favorable positions in the current market [4]. - Sino's price target has been raised by 14% to HK$11.20, supported by strong sales and a significant net cash position of HK$49.5 billion [4]. - The report suggests that property prices will likely remain stable in 2025, with a moderate recovery of 0-5% expected in 2026 as inventory clears [3]. Risks and Challenges - Key risks identified for the Hong Kong property sector include weakening macroeconomic conditions, an increase in new housing supply, and potential higher-than-expected US Fed rate hikes [30]. Additional Important Insights - The effective mortgage cost is projected to widen the positive carry from the current 20 basis points to approximately 100 basis points, based on the latest rental yield of 3.7% [1]. - Discounted projects are attracting strong interest, indicating a potential shift in buyer preferences towards more competitively priced offerings [3]. - The report emphasizes the importance of monitoring macroeconomic indicators and housing supply trends as they could significantly impact future market dynamics [30].

Core Insights - The Federal Reserve has cut interest rates, impacting the housing market and mortgage rates [1][5] - Despite lower mortgage rates, housing affordability remains a significant issue due to high house prices and stagnant incomes [2][6] - Building permits are declining, indicating potential economic slowdown and increased recession risks [10][11] Housing Market - Current mortgage rates are around 6.4%, influenced by expectations of further Fed rate cuts [5] - Affordability issues persist, with high house prices and limited inventory affecting potential homebuyers [2][6] - Refinancing is not appealing for most homeowners unless mortgage rates drop into the 5% range [7][8] Economic Indicators - Building permits are a leading indicator of economic activity, and their decline suggests reduced home construction and economic activity [11][12] - The risk of recession is assessed at 40-45%, with building permits and job market stagnation contributing to this outlook [14][15] - The job market is currently stalled, with no net new job creation, particularly affecting younger workers [17][19] Federal Reserve and Policy Concerns - The Fed's interest rate cuts are a response to a weakening job market, with concerns about employment risks [16][20] - Tariffs and restrictive immigration policies are identified as root causes of economic troubles, impacting various industries [21][22] - The independence of the Federal Reserve is crucial for maintaining a stable economy and financial system [22][23]

Core Viewpoint - Stephen Miran, a new appointee to the Federal Reserve's interest-rate-setting board, advocates for more aggressive interest rate cuts, suggesting rates should be below 3% by year-end [2][6]. Interest Rate Decisions - The Federal Reserve recently cut interest rates by a quarter point, bringing them to a range of 4% to 4.25%, the lowest since early 2023. Miran was the only voting member to oppose this decision, advocating for a half-point cut instead [1]. Economic Analysis - Miran believes that concerns over inflation due to tariffs are overstated, arguing that small price changes in certain goods do not warrant significant worry. He predicts that exporters will lower prices, and he expects a cooling in the housing market due to a declining population influenced by immigration policies [2][4]. - In contrast, Fed Chair Jerome Powell acknowledges that higher tariffs have begun to increase prices in some categories, but the overall impact on economic activity and inflation remains uncertain [3]. Inflation Targeting - The Federal Reserve has maintained a target inflation rate of 2%, which has not been achieved since 2021. Miran views this target as overly restrictive and believes that precise inflation targets can lead to excessive micromanagement [5][6]. Role and Influence - Miran is positioned as an economic advocate for Trump within the Fed, being the first governor to serve on the board while also holding a role in the executive branch in nearly a century. He is currently on leave from his role as chair of Trump's Council of Economic Advisers [6]. - Miran emphasizes his independence in decision-making, stating that he will not conform to consensus for its own sake and will vote according to his beliefs [8].