Bull Market Expected to Continue Following Big Cut

This week (23rd-27th), the New York Stock Exchange is expected to continue its bullish trend due to the US Federal Reserve’s (Fed) big cut (0.5% point cut in the base rate). On the 18th (local time), the day the big cut was announced, the New York Stock Exchange briefly faltered due to Fed Chairman Jerome Powell’s “hawkish big cut” remark, indicating that he would not rush the pace of future interest rate cuts. However, it immediately turned bullish the next trading day. The Dow Jones Industrial Average surpassed the 42,000 mark for the first time ever, and the S&P 500 Index also surpassed the 5,700 mark for the first time.

US Labor Market Continues to Slow

However, as the U.S. labor market continues to slow, Wall Street investors are expected to keep a close eye on economic indicators this week. In fact, U.S. nonfarm payrolls increased by 142,000 in August, significantly lower than the 160,000 expected by experts compiled by Reuters.

Fed’s Economic Outlook Remains Uncertain

The Fed also said in a statement released after the regular meeting of the Federal Open Market Committee (FOMC) on the 18th that “the economic outlook remains uncertain, and the FOMC is mindful of risks to both aspects of its dual mission of price stability and maximum employment.” In fact, it forecasted this year’s real gross domestic product (GDP) growth rate to be 2.0%, down 0.1 percentage points from the 2.1% announced in June.

Upcoming Economic Indicators

This week, the final figures for the second quarter growth rate in the U.S. will be released. The weekly unemployment insurance claimant count, the purchasing managers’ index (PMI) that shows the manufacturing and service sector conditions, and the consumer confidence index will be released. The August personal consumption expenditures (PCE) price index, known as the Fed’s favorite price index, will also be released on the 27th.

Fed Officials Scheduled to Speak

On the 23rd, Chicago Fed President Austin Goolsbee and Atlanta Fed President Raphael Bostic are scheduled to speak. On the same day, Minneapolis Fed President Neel Kashkari is scheduled to speak. On the 24th, Federal Reserve Governor Michelle Bowman is scheduled to speak. On the 25th, Federal Reserve Governor Adriana Coogler is scheduled to speak.