After a rocky start in early August, European and U.S. indices have rebounded significantly, following our previous predictions. Prices for Q2 2024 have remained stable despite the volatility we witnessed.
Although Western markets saw moderate gains in August, there were moments of sharp declines and high volatility. The European index dropped by 7 percent in the first week, only to recover by 10 percent in the following weeks. This instability was triggered by issues in the Japanese stock market and concerns about a possible U.S. recession. However, these fears subsided, leading to positive results by the end of the month.
Core PCE inflation stayed steady at +2.7 percent in July, supporting the Federal Reserve’s plan to lower the benchmark rate in September. The market expects a 25 basis point cut, but further macroeconomic data is needed for a clearer picture. The European economy mirrors the U.S., with inflation at 2.2 percent, prompting expectations of an interest rate cut by the ECB.
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The technical outlook for September is positive, despite historically being a challenging month for markets. A consolidation phase may occur after recent gains, with anticipation of a recovery in October and November. The U.S. presidential election is a key focus, with certain sectors poised to benefit based on the outcome.
The NASDAQ 100 may experience a consolidation phase before testing the 200 moving average and potentially reaching all-time highs with a 7 percent gain. The German market is at record highs, with a possible retracement to the 50-period average before aiming for new highs up to November, projecting a 4 percent rise.
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Stay tuned for more insights in our next article and make informed decisions to secure your financial future!