Hang Seng Index and Mainland China Equities Slide on Stimulus ...
On Tuesday, the RCM/TIPP Economic Optimism Index increased modestly from 46.1 in September to 46.9 in October. Despite the increase, the numbers are unlikely to give the Fed concerns about a possible surge in consumer spending. Upward trends in consumer spending could fuel demand-driven inflation, potentially delaying a Fed rate cut.
According to the CME FedWatch Tool, the chances of a 25-basis point Fed rate cut increased from 84.4% on Monday to 88.8% on Tuesday.
Experts Weigh in on the Fed’s Potential Rate PathArch Capital Global Chief Economist Parker Ross commented on the US economy and Fed rate path, stating,
“Key Takeaway: Sept. job growth of 254k was much stronger than expected and reinvigorated a plausible path to a soft landing. Macro Implications: Slowdown concerns have been quelled, bringing market pricing into alignment with our expectation for a 25bps rate cut in Nov.”
Investors Clamor for More Stimulus from BeijingWhile expectations of a Fed rate cut buoyed the US markets, the HK and Chinese markets faced challenges. On Tuesday, the highly anticipated National Development and Reform Commission (NDRC) press conference disappointed investors. There were no fresh policy measures to boost demand for riskier assets.
The Kobeissi Letter commented on the press conference and market sentiment, stating,
