Market Pulse: Riding the Edge of Momentum | September 26, 2024
Tomorrow’s inflation data is set to be the biggest focus this week. We’ve seen some reactions to consumer confidence earlier and today’s jobless claims, but something still feels off. Every time we try to get these broad rallies, they fade. That said, we’re moving in the right direction, and momentum is starting to pick up. The idea of a breakout turning into a melt-up still holds, and right now, the setup feels more risk-on than off.
Bitcoin had a solid move today, closing above the 200-day moving average, which is a positive sign for the bulls. If it can hold this level, there’s potential for it to push toward the $68,000 target. However, this moment is crucial. If it drops back below the 200-day moving average soon, it could give the bears more confidence, and buyers might start to pull back.
The broader crypto asset market is still under close watch, especially with key economic data affecting overall sentiment. Bitcoin’s move is promising, but the next few days will be important in determining whether the rally can continue or if we’ll see a reversal. Stay alert as we watch this key level.
A close above 65K would change the outlook, but until then, caution is warranted.
The relationship between bonds and tech is key. Rising yields signal a healthier economy, especially after the Fed’s recent rate cuts. Yields continue to hit higher highs, which is a good sign. Despite some bond buying today, yields are still way below last year’s highs, so stocks should be able to handle this. With central banks cutting rates globally, the setup remains favorable for risk assets. The drop in oil prices today is also important, as it eases concerns about inflation surging with China’s economy ramping back up. Saudi Arabia increasing oil supply also helps keep inflation in check.
Semiconductors showed strength after lagging, which is a good sign for tech. The SMH ETF is making higher highs, and if that continues, it could drive a broader rally. Even with a few concerns about individual companies, the overall trend for chips is positive, especially with strong AI demand.
Both Chinese and U.S. markets performed well today, showing that global investors are willing to take on risk in both regions. If inflation data keeps the positive trend going, we could see a strong follow-through, as long as there’s no major surprise. A further bond sell-off would confirm that the economy is improving.
Overall, the market setup looks solid, with key indicators pointing to a more risk-friendly environment. We’ll see if tomorrow’s inflation report confirms that momentum.
