Market sentiment: RiskOn – 12 days
Recap of the past week:
The past week was marked by significant events and encouraging numbers, with market sentiment indicator ultimately ending on a positive note. The highlight was Jerome Powell’s speech at the Jackson Hole Symposium, where he confirmed the expected rate cut in September and indicated the Fed’s focus on the labor market over inflation figures. Positive momentum was also fueled by a stable U.S. job market report, while a disappointing U.S. Manufacturing PMI (expected 49.5, prior 49.6, actual 48.0) highlighted ongoing global manufacturing challenges. Overall, the Moodix sentiment index strengthened by a solid +0.26 points.
Outlook for the following week:
Let’s have a look at the following week from the economic calendar perspective.
We kick off Monday with a nearly empty economic calendar, focusing on German IFO data and U.S. Durable Goods Orders.
Tuesday will bring fresh German Q2 GDP and GFK data, followed by U.S. Housing Price Index and Consumer Confidence figures.
Wednesday will be pivotal, especially for the TECH and AI sectors, as Nvidia’s earnings report is anticipated. Strong results could boost the broader market, while a miss might prompt profit-taking.
Thursday’s focus will be on EU Business Climate, Consumer Confidence, and Economic Sentiment Indicator, along with the first estimates of German inflation. Key U.S. updates include the weekly jobless claims, revised Q2 GDP, and quarterly Personal Consumption Expenditures Prices.
Friday will start with crucial inflation data from Japan; a rise might signal another rate hike from the BoJ. Later, the EU will release August inflation estimates, followed by Canadian GDP, the monthly PCE index, and the Michigan Consumer Sentiment Index. News related to the weekend escalation between Israel and Hezbollah is also expected to unfold throughout the week.
Long-term sentiment
The moodix market sentiment indicator has shown continued strength (see more on waves statistics), maintaining a positive outlook. Markets have been anticipating this week for some time, with Nvidia’s earnings set to validate TECH/AI valuations. Investors will scrutinize major macroeconomic indicators closely. Concerns about a potential recession linger, particularly given recent struggles in the manufacturing sector. Trading systems are expected to focus on identifying long positions.
Good luck! Team moodix!