Federal Reserve Chairman Powell stated that he does not feel the Fed is in a hurry to cut interest rates. If the economy meets expectations, the Summary of Economic Projections (SEP) will indicate that the FOMC will implement two more rate cuts of 25 basis points each (below market expectations). Additionally, Atlanta Fed Chairman Bostic, a voting member this year, expressed openness to another 50 basis point rate cut if the US labor market weakens.
Powell's remarks cooled the enthusiasm for rate cuts, with market expectations for a 50 basis point Fed rate cut in November plummeting to 36.2%. US Treasury yields and the dollar rose in tandem, with the two-year Treasury yield climbing nearly 10 basis points and the US dollar index gaining over 0.2%. This led to a decline in precious metals and non-US currencies, with the yen falling more than 1% at one point during trading. US stocks also saw a brief expansion in losses, with the S&P 500 falling over 0.6% at one point, but the index accelerated to a new closing high at the end of the day.
Internationally, German inflation slowed, with September CPI at 1.6%, breaking below 2%. Meanwhile, Lagarde stated increased confidence in controlling inflation, and expectations for an ECB rate cut in October have once again heated up. Bank of America has forecast the ECB's next rate cut to be in October, two months earlier than previously predicted, while Barclays expects the ECB to lower rates in October and continue cutting rates until June next year.
Despite Federal Reserve Chairman Powell's implication that he is not in a hurry to further cut interest rates, causing a collective decline in US stocks after midday, the Dow Jones and S&P still set new closing highs. Historically, US stocks usually perform poorly in September, but all three major indices rose for the month. The S&P 500 marked its first September increase since 2019 and has risen for five consecutive months. In the third quarter, US stocks saw only the semiconductor index decline, while the China concept index surged nearly 30% in September, and Nvidia recorded its first quarterly decline since 2022.
All three major US stock indices rose in September: The S&P 500 large-cap index rose by 24.31 points, a gain of 0.42%, to close at 5,762.48 points, with a cumulative increase of 2.02% in September, marking the best September performance since 2013 and a five-month winning streak. The Dow Jones, closely related to the economic cycle, rose by 17.15 points, a gain of 0.04%, to close at 42,330.15 points, with a cumulative increase of 1.85% in September. The technology-heavy Nasdaq rose by 69.58 points, a gain of 0.38%, to close at 18,189.17 points, with a cumulative increase of 2.68% in September. The Nasdaq 100 rose by 0.26%, with a cumulative increase of 2.48% in September. The Nasdaq Technology Market Capitalization-Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100, rose by 0.40%, with a cumulative increase of 2.15% in September. The Russell 2000 index, more sensitive to the economic cycle, rose by 0.24%, with a cumulative increase of 0.56% in September. The VIX volatility index fell by 1.42%, closing at 16.72, with a cumulative increase of 7.52% in September, reaching its highest level of 23.76 on September 7th.
In September, the Russell 2000 small-cap index rose by 0.4%, the semiconductor index rose by 0.3%, and the China concept index rose by nearly 30%. In the third quarter, the Dow Jones rose by 8.2%, the S&P rose by 5.5%, marking four consecutive quarters of gains and the longest winning streak since 2021, the Nasdaq rose by 2.6%, the small-cap index rose by 8.7%, the semiconductor index fell by 5.5%, and the China concept index rose by over 26%. In the third quarter, the utilities sector in the S&P performed the best, increasing by over 18%, the largest gain since 2003, while the real estate sector was the second best, increasing by nearly 16%.
European stock markets closed essentially flat in September, US stock markets rose slightly, and Chinese stock markets soared.
Most US industry ETFs closed higher. Regional bank ETFs and bank ETFs each rose by more than 1%, energy sector ETFs and healthcare sector ETFs rose by nearly 1%, biotechnology index ETFs, public utility sector ETFs, and financial sector ETFs each rose by less than 0.5%. Meanwhile, semiconductor ETFs fell by nearly 1%, and global airline industry ETFs also fell by more than 0.5%.
The S&P 500 Index's 11 sectors saw more gains than losses. The energy sector rose by 0.83%, the telecommunications sector rose by 0.79%, the information technology/technology sector rose by 0.58%, while the consumer discretionary sector fell by 0.28%, and the materials sector fell by 0.6%.In September, the discretionary consumption sector rose by 7.02%, the utilities sector by 6.43%, the telecommunications sector by 4.53%, the industrial sector by 3.27%, the real estate sector by 2.73%, the technology sector by 2.45%, the materials sector by 2.41%, the consumer staples sector by 0.59%, the financial sector fell by 0.67%, the healthcare sector fell by 1.82%, and the energy sector fell by 2.79%.
In September, the energy sector led the decline with a drop of 2.79%, while the discretionary consumption and utilities sectors performed exceptionally well (an unusual combination of cyclical and defensive stocks).
In terms of investment research strategy, Goldman Sachs' Peter Oppenheimer believes that the US stock market valuations are high, and future increases will slow down. Valuation expansion may be more pronounced in Europe or China, especially those European stocks related to China will further benefit from China's large-scale stimulus measures. BlackRock has turned overweight on Chinese stocks due to expectations of significant fiscal stimulus measures from China.
Most of the "Tech Seven Sisters" rose. Apple closed up 2.29%. Google A closed up 1.16%. The US canceled the SB-1047 bill, allowing global developers to continue using large open-source models from US tech giants such as Meta and Google. Google plans to invest $1 billion in building a data center in Thailand to accelerate the development of artificial intelligence in Asia. "Metaverse" Meta closed up 0.9%, Microsoft closed up 0.53%, Tesla closed up 0.45%, NVIDIA fell 2.7% and then turned up 0.03%, with a cumulative increase of 1.73% in September, continuing the rebound of 2.01% in August, but the third quarter's cumulative decline of 1.7% was the first quarterly decline since 2022. Amazon closed down 0.87%.
Most chip stocks closed down. The Philadelphia Semiconductor Index closed down 0.85%, with a cumulative increase of 0.28% in September. The industry ETF SOXX closed down 0.9%; the NVIDIA double long ETF closed up 0.1%. Intel closed down 1.88%, TSMC ADR closed down 2.42%, Broadcom closed down 0.11%, Arm Holdings closed down 1.77%, Micron Technology closed down 3.53%, Applied Materials closed down 1.4%, ASML ADR closed down 0.99%, KLA closed down 1.02%, AMD closed down 0.16%, Qualcomm closed down 0.05%, Nano-Micro Semiconductors closed down more than 5%, while Marvell Technology closed up 1.59%, Silicon Motion Technology ADR rose more than 0.2%, and Seagate Technology rose more than 0.7%.
In September, Micron Technology rebounded 7.76%, Arm rose 7.62% after falling 11.89% and 7.83% in the previous two months, Intel rose 6.44% but the continuous decline trend since 2024 has not improved, TSMC rose 1.52%, continuing the performance of a 3.56% increase in August, AMD closed down 4.87%, continuing the experience of falling 14.37% and 37.62% in the previous two months.
AI concept stocks fluctuated. Dell Technologies closed down 1.4%, Dell Technologies CEO Michael S. Dell sold 10 million Dell shares on September 26, cashing out $1.22 billion. AMD closed down 0.8%. Serve Robotics closed down 7.34%, CrowdStrike closed down 1.89%, BullFrog AI closed down 3.69%, NVIDIA-held AI voice company SoundHound AI closed down 2.51%, BigBear.ai closed down 5.81%, while C3.ai closed up 0.04%, Snowflake closed up 0.83%, Oracle closed up 0.98%, Palantir closed down and then up 0.98%.
Chinese concept index rose and then fell. The NASDAQ Golden Dragon China Index rose more than 7% during the session and then closed up 0.45%, with a cumulative increase of 29.60% in September. Among ETFs, the China Technology Index ETF (CQQQ) closed up 3.88%, with a cumulative increase of 28.91% in September. The China Internet Index ETF (KWEB) closed up 0.12%, with a cumulative increase of 32.23% in September. The FTSE China 3x Long ETF (YINN) rose nearly 6% during the session and then closed down 3.65%, while the FTSE China 3x Short ETF (YANG) closed up 4%.
The FTSE A50 futures continued to fall more than 1.80% during the night and then closed down 1.32%, reporting 13,716.000 points, with a cumulative increase of more than 18.75% in September. The Hang Seng Index futures fell more than 2.18% during the night, and the Hang Seng Technology Index futures fell 3.72% during the night.In popular Chinese concept stocks, Fangdd closed up 146.03%, NIO rose over 18% and then closed up 2.45%, Ji氪 increased nearly 20% and then closed up 5.69%, Li Auto rose nearly 10% and then closed down 0.5%, XPeng Auto increased over 7% and then closed down 4.25%, New Oriental rose over 10.9% and then closed up 3.23%, Miniso increased over 15% and then closed up 2.39%, Bilibili increased nearly 10% and then closed up 2.01%. JD.com increased over 6.8% and then closed up 0.25%, JD.com announced an investment of 1.5 billion yuan to layout the Hong Kong market, with no upper limit in the long term. Baidu increased nearly 5.6% and then closed up 0.11%, NetEase increased nearly 3.9% and then closed down 0.07%, Pinduoduo increased over 5.6% and then closed down 0.42%, Alibaba increased over 4.5% and then closed down 1.13%, Tencent Holdings ADR closed down 2.88%.
Due to the slowdown in the automotive market and intensified competition, many European car manufacturers issued profit warnings, leading to a 4% decline in the automotive sector, which was the biggest loser. On Monday, the pan-European stock index fell by 1%, with a cumulative decline of 0.4% in September. European luxury stocks dragged down the French stock market by 2%, but luxury stocks mostly rose in September, with Novo Nordisk cumulatively falling by 16.13% in September:
The pan-European Stoxx 600 index closed down 0.98%, bidding farewell to the new high set last Friday, at 522.89 points, with a cumulative decline of 0.41% in September. On Monday, all sectors of European stocks generally fell, with only the oil and gas sector rising by 0.24%. In September, the European healthcare sector and auto parts sector cumulatively fell by more than 6%, the oil and gas index fell by 5.51%, while the raw materials sector rose by more than 8.9%.
Automotive stocks fell by 4%, leading the decline, with many car manufacturers issuing profit warnings. Stellantis fell by 14.72%, as the automotive market slowed down and competition intensified, downgrading its annual profit margin forecast, planning to reduce production and increase promotional spending. British luxury car manufacturer Aston Martin's stock price plummeted by 24.51%, and the company downgraded its full-year guidance. Since the beginning of the year, the company's stock price has almost halved. French Renault fell by 5.57%, German Porsche fell by 4%, Volkswagen fell by 2.02%, Mercedes-Benz Group fell by 2.44%, and BMW fell by 2.42%.
Most luxury stock concepts fell back, with Kering Group closing down 3.75%, Pernod Ricard down 2.93%, Hugo Boss down 2.51%, LVMH Group down 2.12%, Burberry down 1.27%, Hermes down 1.16%, L'Oréal down 0.96%, Rémy Cointreau down 0.92%, and Richemont Group down 0.63%. However, most of them rose in September, with Hugo Boss leading with a cumulative increase of 7.85%, Pernod Ricard up 5.24%, Burberry up 4.97%, LVMH Group up 2.11%, Hermes up 1.71%, L'Oréal up 1.37%, while Rémy Cointreau fell 5.42%.
The German stock index closed down 0.76%, with a cumulative increase of 2.21% in September. The French stock index closed down 2%, with a cumulative increase of 0.01% in September. The Italian stock index closed down 1.73%, with a cumulative decline of 0.72% in September. The British stock index closed down 1.01%, with a cumulative decline of 1.67% in September. The Spanish stock index closed down 0.76%, with a cumulative increase of 4.17% in September. The Dutch stock index closed down 0.80%, with a cumulative decline of 0.93% in September.
Powell's tone led to a rise of about 10 basis points in the two-year U.S. Treasury yield on Monday, narrowing the cumulative decline in September to nearly 26 basis points. Lagarde's speech raised investors' expectations for a rate cut by the European Central Bank in October, with the two-year German bond yield falling by more than 32 basis points in September:
U.S. Treasury bonds: At the end of the day, the two-year U.S. Treasury yield, which is more sensitive to monetary policy, rose by 9.63 basis points to 3.6554%. After Federal Reserve Chairman Powell said, "If the economy is in line with expectations, the Summary of Economic Projections (SEP) will imply that the FOMC will take action twice in the future, with a total reduction of 50 basis points," it rose to 3.6677%, hitting a daily high, with a cumulative decline of 26.31 basis points in September. The U.S. 10-year benchmark Treasury yield rose by 5.13 basis points to 3.8019%, with a cumulative decline of 10.54 basis points in September.Euro Debt: The benchmark 10-year German bund yield fell by 1.0 basis point, and accumulated a decline of 17.6 basis points in September. The two-year German bund yield fell by 0.9 basis point, and accumulated a decline of 32.4 basis points in September. The French 10-year government bond yield fell by 0.1 basis point, and accumulated a decline of 10.6 basis points in September. The Italian 10-year government bond yield rose by 0.1 basis point, and accumulated a decline of 24.8 basis points in September. The British 10-year government bond yield rose by 2.6 basis points, and accumulated a decline of 1.2 basis points in September. The two-year British government bond yield rose by 4.3 basis points, and accumulated a decline of 12.6 basis points in September.
On Monday, after Powell's remarks, U.S. Treasury yields rose across the board, with the two-year U.S. Treasury yield increasing by 10 basis points, but U.S. Treasury yields fell across the board in September, with the short-end U.S. Treasury yields experiencing a larger decline.
After Powell's speech, the U.S. dollar index increased, but it fell for three consecutive months and accumulated a decline of over 0.9% in September. The yen fell by more than 1%, approaching 144, but accumulated a rise of 1.6% in September, and accumulated a rise of over 10% in the third quarter. The offshore yuan against the U.S. dollar fell by the deepest 350 points, once breaking through 7.01 yuan, accumulated a rise of nearly 830 points or 1.2% in September, and rose for three consecutive months. In the third quarter, it rose by nearly 2800 points or 3.8%. Last Thursday, it once approached 6.97 yuan, setting a 16-month high. The offshore yuan accumulated a rise of over 800 points in September, rising for three consecutive months. Bitcoin accumulated a rise of over 7% in September, making it the second consecutive September with a rise in history.
Dollar: The U.S. dollar index DXY, which measures against a basket of six major currencies, rose by 0.38%, reporting 100.761 points, and accumulated a decline of 0.92% in September, spending most of the month in a downward trend. On September 27, at 20:30 Beijing time, it once fell to 100.157 points.
The Bloomberg U.S. dollar index rose by 0.30%, reporting 1222.81 points, and accumulated a decline of 0.93% in September, once falling to 1216.47 points on September 25.
The U.S. dollar fell for three consecutive months, with most of the decline coming from the inflation and employment data released at the beginning of September.
Non-U.S. currencies generally rose in September: The euro against the U.S. dollar fell by 0.23%, and accumulated a rise of 0.82% in September. The British pound against the U.S. dollar was roughly flat, and accumulated a rise of 1.89% in September. The U.S. dollar against the Swiss franc rose by 0.63%, and accumulated a decline of 0.49% in September. Among commodity currency pairs, the Australian dollar against the U.S. dollar rose by 0.17%, and accumulated a rise of 2.22% in September. The New Zealand dollar against the U.S. dollar rose by 0.08%, and accumulated a rise of 1.60% in September. The U.S. dollar against the Canadian dollar rose by 0.08%, and accumulated a rise of 0.26% in September. The Australian dollar was at its highest in 19 months, and the New Zealand dollar was at its highest in 14 months.
The yen fell towards 144 during the session: At the end of the session, the yen against the U.S. dollar fell by 0.98%, reporting 143.60 yen, and accumulated a rise of 1.72% in September, once rising to 139.58 yen on September 16. The yen against the euro fell by 0.72%, reporting 159.89 yen, and accumulated a rise of 0.98% in September. The yen against the British pound fell by 0.97%, reporting 192.075 yen, and accumulated a decline of 0.11% in September, showing a V-shaped reversal.
Offshore yuan (CNH): The offshore yuan fell by 258 points at the end of the session, reporting 7.0074 yuan, trading overall in the range of 6.9735-7.0139 yuan during the session, and accumulated a rise of 826 points in September, rising for the third consecutive month, matching the number of consecutive rising months in January, when it accumulated a rise of 5795 points.
Cryptocurrencies generally fell on Monday. The largest market cap leader, Bitcoin, fell by 3.14% at the end of the session, reporting 64,065 U.S. dollars, and accumulated a rise of 7.38% in September, trading within the range of 53,255-67,135 U.S. dollars during the month. The second-largest Ethereum fell by 2.18% at the end of the session, reporting 2,627.50 U.S. dollars, and accumulated a rise of 3.16% in September.Bitcoin rose by 7.38% in September, marking the best month since May.
OPEC+ plans to increase production in December, coupled with weak demand from crude oil importing countries, failed to support oil prices amid Middle East tensions. Both US oil and Brent crude have fallen for three consecutive months, with September declines of 6.2% and 6.7% respectively. Meanwhile, US natural gas rose by 17% in September:
US Oil: WTI November crude oil futures closed down by $0.01, a decrease of 0.01%, at $68.17 per barrel, with a cumulative decline of over 6.16% in September. Before the European stock market, US oil refreshed its daily high, rising nearly 1.7% and breaking through $69.30, and during the European stock market, it refreshed its daily low, falling nearly 0.9% and approaching $67.50.
Brent Oil: Brent November crude oil futures closed down by $0.21, a decrease of 0.29%, at $71.77 per barrel, with a cumulative decline of about 6.71% in September. Before the European stock market, Brent oil refreshed its daily high, rising nearly 1.7% and breaking through $73.10, and during the European stock market, it refreshed its daily low, falling over 1% and approaching $71.20.
Natural Gas: US November natural gas futures closed up by 0.72%, at $2.9230 per million British thermal units, with a cumulative increase of 17.01% in September. The European benchmark TTF Dutch natural gas futures closed up by 0.99%, at €38.350 per megawatt-hour, with a cumulative decline of 2.29% in September. ICE UK natural gas futures fell by 0.26%, at 96.150 pence per kilowatt-hour, with a cumulative decline of 7.80% in September.
Oil prices fell for three consecutive months in September, with US oil falling nearly 6.2%, marking the worst month since October 2023.
Powell's speech triggered a joint rise in the US dollar and US Treasury bond yields, coupled with profit-taking and a surge in the Chinese stock market, which suppressed gold prices by more than 1.4%. However, it still rose by more than 5.2% in September, driven by the Federal Reserve's 50 basis point rate cut and escalating tensions in the Middle East. Spot gold once set a historical high of $2,685.42, and has accumulated a 13% increase so far this quarter, the best since early 2020:
Gold: COMEX December gold futures closed down by 0.47%, at $2,655.50 per ounce, with a cumulative increase of 4.74% in September. Spot gold refreshed its daily high in the Asian morning, rising nearly 0.3% and approaching $2,670, then continued to decline, refreshing its daily low after Powell's speech, falling by 1.41%, and closing at $2,634.58 per ounce, with a cumulative increase of 5.24% in September, reaching a historical high of $2,685.58 on September 26.
Silver: COMEX December silver futures closed down by 1.58%, at $31.420 per ounce, with a cumulative increase of 7.81% in September. Spot silver refreshed its daily high in the Asian morning, rising over 0.7% and breaking through $31.80, then continued to decline, refreshing its daily low after Powell's speech, falling nearly 2.4% and approaching $30.80, closing down by 1.29%, at $31.1595 per ounce, with a cumulative increase of 9.16% in September, also reaching its monthly high of $32.7148 on September 26.
London's basic industrial metals all rose in September. The economic barometer "Dr. Copper" rose by 1.54%, at $9,829 per ton, with a cumulative increase of 6.43% in September.伦锌 closed up by $2, with a cumulative increase of over 6.69% in September.伦铝 closed down by 1.32%, with a cumulative increase of 6.74% in September.伦锡 rose by over 1.65%, with a cumulative increase of about 3.44% in September.伦铅 closed down by 1.13%.伦镍 closed up by 3.05%, with a cumulative increase of 4.46% in September.COMEX copper futures fell by 1.05%, closing at $4.5510 per pound, with a cumulative increase of 8.05% in September.
Goldman Sachs reiterated its recommendation to go long on gold, raising its gold price forecast for early 2025 to $2,900 per ounce (previously forecasted at $2,700). CITIC Securities Research Report believes that the United States' loose monetary policy stimulates financial attributes, while China's policy support safeguards commodity attributes, with the double impact of financial and commodity attributes opening up upward price space for industrial metals.
Spot gold rose for the 7th consecutive month in the past 8 months, marking the best month since March.