Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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As widely expected, the Federal Reserve lowered rates on the dollar to 4% during its latest meeting. What markets did not anticipate was Chairman Powell’s stance regarding the next decision on the 10th of December. Interest rate traders had largely accepted that one more 25-bps cut was pencilled in before the end of the year, but Powell dashed such hopes during Wednesday’s press conference, stating that “a further reduction […] is not a foregone conclusion”. FedWatch is still leaning towards a December cut, although with less conviction than a few days ago. The dollar has strengthened somewhat over the past couple of sessions, reflecting the Fed’s lack of commitment to reduce rates in the future.
Yesterday’s meeting between the US and China appears to have produced some tangible results. According to the US President, “the rare earth issue has been settled”, adding that China would delay its export controls for one year. In exchange, the additional so-called “fentanyl tariff” would be lowered from 20% to 10%, as a reward for Chinese commitments to crack down on shipments of the drug and its precursors. Progress was also made on the agricultural front, with China agreeing to buy large amounts of American soy beans. Of course, none of the above has been committed to writing as of yet – such agreements will likely take months to solidify – and the consensus among many market participants is that the trade war is far from over. Precious metals reversed their recent slide yesterday as investors digested the scope of the talks in South Korea, with gold pushing back above $4,000 per ounce and silver closing in on $49.
The big tech companies have displayed mixed signals so far regarding Q3 earnings. Meta Platforms (META) collapsed 11% yesterday due to growing concerns surrounding the company’s heavy spending on AI, while Microsoft (MSFT) fell 3% for similar reasons relating to spending forecasts. Alphabet (GOOG) meanwhile pushed higher following strong quarterly results. Amazon (AMZN) and Apple (AAPL) reported last night after the closing bell, and both companies rose in after-market trading. Amazon in particular surged over 12% during extended hours.
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