Most Markets Up But Waiting for Fed’s Chair Speech

The BLOM Stock Index (BSI) compiled by BLOM Invest Bank daily increased weekly by 5.44% to reach 1,833.87 on August 23^rd, 2024 up from 1,739.24 on August 16^th, 2024.

On the Beirut Stock Exchange (BSE), the real estate sector grasped the lion’s share of the BSE’s trading value with a stake of 62.94%, while the banking sector came next with a 26.32% stake along with the industrial sector with the remaining 10.74% stake. The most noteworthy trades throughout the mentioned period included:

As for the BLOM Preferred Shares Index (BPSI), it remained constant at 27.78 on August 23^rd, 2024.

European and U.S. stock markets are waiting for Federal Reserve’s Chair Jerome Powell speech today at 10 am ET time at the annual economic policy symposium in Jackson Hole. This speech is awaited by traders and investors due to its importance concerning the Fed’s future policies, since previous years’ speech defined broad policy initiatives and delivered signs about future of policy. Although there is an agreement between investors that the Federal Reserve will initiate rate cuts in September but the magnitude of the cut is not predicted. Investor’s prediction that rate cuts are inevitable is supported by the Bureau of Labor Statistics’ preliminary benchmark revision that revealed number of workers on payroll was revised downward by around 818,000 for the year ending in March. However, the expected US economic data will be revealed before the FOMC meeting will directs Federal Reserve’s policy.

As such, U.S. stocks indices fluctuated this week where S&P 500 and Dow Jones rallied by 0.49% and 0.37% while NASDAQ dropped by 0.07%.

It is interesting to note that stock markets this week gave two bullish signals that it could reach a fresh high soon. As per Ed Clissold, chief U.S. strategist at Ned Davis Research, pointed out that “the S&P 500 experienced a so-called breadth thrust this week, when more than 90% of the stocks in the benchmark broke above their 10-day moving averages on Monday”. While the second sign is from the bond market where Clissold pointed out that “the benchmark 10-year Treasury bond yield fell to its lowest level in more than a year on Wednesday” and it happened after the release of U.S. jobs data revision that supported the forecasts of fed lowering interest rates.

Across the Atlantic, Europe stocks increased awaiting Powell’s speech today in the annual economic policy symposium in Jackson Hole. The European index Stoxx 600 increased by 0.43% this week to reach around 517. CAC 40 also increased as business confidence in France rose from 95.4 in July (three-and-a-half year low) to 98.8 by August 2024.

In Asia, Hang Seng equities led the Asian Markets gains this week, to reach 17,612.1 by August 23^rd, 2024 recording a consecutive third week gains as investors believed that China might provide more support for the economy in the remainder of the year. In addition, Alibaba Group announced plans to convert its secondary listing to a primary listing in Hong Kong, effective August 28^th, 2024. Similar did the Japanese stock index (NIKKEI) that rose by 0.79% by August 23^rd, 2024 as investors digested recently revealed Japan’s core inflation rate that accelerated for the third consecutive month and recorded 2.7% in July, although the governor of Bank of Japan stated that the central bank could adjust the monetary policy if the economic projections materialize, indicating that rates increases is possible.

In China, stocks dropped by 0.87% amid market concerns about China’s economic outlook due to its ongoing geopolitical and trade tensions with other major economies.

Similarly, the MSCI Emerging Market index also scored some weekly gains as it surged by 0.66% to reach $1,100.89.

The Arab Stock Market rallied this week (except for Qatar) along with its international peers with the Saudi Stock Exchange index TASI leading this hike by 2.35%.

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