Daily Market Comment – Stock markets party even as US economy contracts

  • US economy flirts with recession after second negative GDP print
  • Bad news is good news for stock markets, solid earnings help too
  • Yen stages sharp comeback, dollar loses some steam, gold bounces
Don’t call it recession

The United States is teetering on the edge of a recession after the economy shrank for a second consecutive quarter, adding another headache for Federal Reserve officials in their fight against roaring inflation. 

Dissecting the GDP report, the silver lining was that much of this contraction boiled down to inventories being unwound and government spending rolling off. Consumers are still spending and exports have started to fire up, although the weakness in investment is a bad omen for what comes next. 

While two straight quarters of negative growth would normally qualify as a technical recession, the Fed and White House have stressed this is not a ‘real’ recession since we haven’t seen businesses going bankrupt or massive job losses. Nonetheless, the economy is stalling and it might be only a matter of time until the labor market shows cracks considering that jobless claims are trending higher and business surveys point to plans to slow hiring.

Traders bet on cautious Fed

The disappointing GDP reading sent shockwaves through global markets, with the price action in bonds and equities telling the same story - the end of the Fed’s tightening cycle is approaching. Treasury yields fell across the curve and Fed funds futures point to a lower terminal point for interest rates, which are now expected to peak at 3.25% in December. 

In classic fashion, bad news on the economy was good news for stock markets amid hopes the Fed won’t keep raising interest rates with reckless abandon in the face of faltering growth. The S&P 500 climbed 1.2% and futures point to another round of gains today following some cheerful earnings from Amazon and Apple. 

Amazon shares rose a whopping 12% in after-hours trading after the e-commerce and cloud computing behemoth overcame revenue expectations and provided a cheerful forecast for the rest of the year, calming some nerves around consumer spending. Meanwhile, Apple shares gained 3% after the company reported slightly stronger-than-expected earnings and revenue. 

The bar was set so low heading into this earnings season that companies are jumping over it without much effort, and investors are taking solace in the fact that the situation is not catastrophic. 

Yen gets its mojo back

Over in the FX complex, the yen has come back to life. The retreat in global yields as investors reconsider how far the Fed can raise rates was exactly what the doctor ordered for the Japanese currency, which is about to close the week with gains exceeding 2% against the US dollar. 

The Bank of Japan’s refusal to even consider tighter policy and the loss of the nation’s historical trade surplus as energy prices went ballistic were the two main forces that pummeled the yen this year. Now that growth is losing power and foreign central banks are expected to slow their own tightening plans, the yen has started to stand on its feet, with a little help from stable oil prices too. 

The dollar is set to close the week with some losses, but admittedly the retreat has been rather mild considering the rethink around Fed policy and the sanguine mood in riskier assets. Finally, with the wind coming out of the dollar’s sails and real 10-year Treasury yields getting cut in half this week, gold prices have received the green light to cruise higher. 

면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.

온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.

이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.

우리는 웹사이트에서 최고의 경험을 전해드리기 위해 쿠키를 사용하고 있습니다. 자세히 읽거나 쿠키 설정을 변경하세요.

리스크 경고: 고객님의 자본이 위험에 노출 될 수 있습니다. 레버리지 상품은 모든 분들에게 적합하지 않을수 있습니다. 당사의 리스크 공시를 참고하시기 바랍니다.