US rate cut boosts stocks and gold; Oracle falls post-earnings; JD Industrial debuts in HK.

Federal Reserve Decision: 25 Basis Points Cut and $40 Billion Treasury Purchase in 30 Days

The Federal Reserve has cut interest rates by 25 basis points for the third consecutive time, marking the first instance of dissent since 2019. Notably, three members opposed the decision, with one advocating for a 50 basis point cut. The statement emphasized that inflation remains slightly elevated and that employment risks have increased in recent months.

Key Highlights

• The Fed plans to purchase $40 billion in short-term debt over the next 30 days to maintain adequate reserves.
• The median interest rate forecast remains unchanged, suggesting one more cut in the next two years.
• Economic growth expectations for this year and the next three years have been revised upward, while inflation and unemployment forecasts have been slightly lowered.

Powell's Remarks

Fed Chair Jerome Powell stated that a rate hike is not currently expected, with a 77.9% probability of maintaining rates in January 2024.

Market Reactions

Following the Fed's announcement, major indices rose, with the S&P 500 nearing its historical high. The Dow Jones increased by 1.05%, and the Nasdaq by 0.33%.

Trump Critiques Fed's Rate Cut

President Trump expressed dissatisfaction with the Fed's decision, stating that a 25 basis point cut was insufficient and could have been doubled.

Goldman Sachs Analysis

Goldman Sachs analysts believe the Fed has reached the end of "preventive rate cuts," indicating that future easing will depend on labor market data.

Silver Prices Surge

The price of silver has surpassed $62 per ounce, driven by increasing demand in solar energy and electric vehicles.

Hong Kong IPO Forecast

KPMG predicts that Hong Kong will lead global IPO fundraising in 2025, with an expected total of HKD 272.1 billion, a 210% increase year-on-year.

European Central Bank Insights

ECB board member Fabio Panetta suggested that the world may transition from a "dollar-dominated" system to a "multipolar currency" framework.

Notable Stock Movements

• Oracle shares fell over 11% after disappointing cloud revenue results.
• Gemini's stock surged over 15% following the approval of its derivatives exchange by the CFTC.
• GE Vernova's stock rose nearly 16% after raising its earnings guidance.

Conclusion

The Fed's decision to cut rates and the subsequent market reactions highlight ongoing economic adjustments. Investors should monitor upcoming economic data, including unemployment claims and trade balance figures.