📈 Markets on edge

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Good Morning and Happy Monday!

After last week’s rollercoaster, markets are on edge, awaiting key data including US CPI. If you used Cashapp in the past few years, you may be eligible to claim part of a $15 million settlement (see below).

Grab your Cold Brew and let's get into it! ☕️👇️

Markets

🎢 Whipsaw week leaves markets on edge
Last week, the S&P 500 experienced both its worst and best single-day performances of the year, reflecting heightened market uncertainty. On Monday, recession fears and an overseas sell-off triggered a 3% drop in the S&P 500, signaling volatility and concern on Wall Street.

However, by Thursday, stocks rebounded with a 2.3% surge, the best one-day rally since 2022, driven by a positive weekly unemployment benefit report that eased economic worries.

This week, key inflation and retail sales data will be in focus, potentially influencing market expectations for future rate cuts. “Should the data align with expectations, we anticipate fewer rate cuts this year,” noted Gapen.

⌚️ Gold Traders brace for US inflation data
Gold prices edged up on Monday, fueled by hopes of U.S. interest rate cuts and rising geopolitical tensions. Traders are now eyeing key U.S. inflation data later this week for further monetary policy insights.

🇨🇳 China’s CPI Data
China’s consumer prices increased by 0.5% in July year-on-year, surpassing expectations, driven largely by a surge in pork prices. Pork, a staple in the Chinese diet, heavily influences the country’s consumer price index but is vulnerable to sharp fluctuations due to factors like disease outbreaks.

📱 Cash App Customers Can Now Claim Part of a $15 million Settlement. Here's How
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🏘️ What’s the Bull Case For Housing?
Many are turning bearish on housing prices as they remain high alongside elevated mortgage rates, making homes unaffordable for much of the population. But what about the bull case? What factors could cause housing prices to defy both gravity and realistic expectations?

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From our partners

ECONOMY

What Declining Interest Rates Mean For You

Charles Schwab shared a great blog post on what declining interest rates mean for you. When the Federal Reserve lowers its key short-term interest rate, the effects ripple through the financial markets, but not uniformly.

Short-Term Impacts:

• Cash Investments: Yields typically decline, with cash-related investments feeling the negative impact.

• CDs and Savings Accounts: Rates usually fall, though not evenly across all maturities.

• Stock Market: The initial response may be positive, but a deepening economic slowdown could lead to declines.

• Financial Stocks: Bank stocks may suffer as the gap between deposit rates and loan rates narrows.

• Utilities Stocks: Typically benefit as investors seek stable dividends.

• ARMs, Auto Loans, Home Equity Loans: These generally see rate reductions tied to short-term interest rates.

Intermediate-Term Impacts:

• Intermediate-Term Bonds: May see more significant price changes due to rate sensitivity.

• Asset-Based Loans: Rates might decrease gradually.

• Global Stocks: Often outperform U.S. stocks during rate-cut cycles.

Long-Term Impacts:

• Long-Term Bonds and Mortgage Rates: Influenced more by growth and inflation expectations than by the Fed's rate cuts. The effects are uncertain and can vary over time.

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