US stocks slip as stagflation fears resurface. Asia Pacific markets rally despite US retreat. The US dollar is soft. Nikkei soars to a new all-time high.
Nikkei 225 rallied to another record high, US dollar remained soft, WTI extended losses
US stock markets slipped on Friday, 15 August, as stagflation concerns weighed on sentiment following the latest University of Michigan consumer survey. The S&P 500 fell -0.3%, the Nasdaq 100 lost -0.5%, while the Dow Jones Industrial Average ended nearly flat, up just 0.08%.
The preliminary University of Michigan Consumer Confidence data for August fell for the first time in four months to 58.6 from 61.7 in July, and well below expectations of 62. Its inflation expectations sub-component rose; the one-year ahead increase for a second month to 4.9% in August from 4.5% in July, and the longer-term five-year ahead increased to 3.9% in August from 3.40%.
Despite this latest bout of stagflation fears in the US, Fed Funds futures traders are still assigning a high probability scenario that the US Federal Reserve is likely to enact its Fed Funds rate cut in the upcoming FOMC meeting on 17 September.
Based on the latest data from the CME FedWatch tool, there is still a high chance of 85% that the Fed may cut 25 basis points on 17 September to lower the Fed Funds rate to 4.25%-4%, almost unchanged from a week ago's rate cut probability of 86%.
Most Asia Pacific stock markets shrugged off last Friday’s US stock market retreat and rallied in today’s Asia session. Japan’s Nikkei 225 soared by 0.9% to another fresh all-time intraday high of 43,757 at this time of writing. Hong Kong’s Hang Seng Index rebounded by 0.5% after a close retest of its 20-day moving average, acting as key intermediate support at 25,055. The outlier is Singapore’s Straits Times Index as it shed -0.8% to hit a five-day low.
The US Dollar Index traded flat in today’s Asia session after last Friday’s loss of -0.4% as it continued to remain soft below its 20-day and 50-day moving averages. The NZD (0.3%) and AUD (0.2%) are the outperforming currencies against the greenback, while the JPY shed-0.2% against the US dollar at this time of writing.
WTI crude oil extended its decline in today’s Asia session, slipping -0.4% intraday following last Friday’s Trump–Putin meeting in Alaska. While President Trump described the talks as “productive,” he provided no details on a potential Russia–Ukraine ceasefire. Markets now turn their focus to today’s meeting between Ukrainian President Zelenskiy, several European leaders, and Trump for further developments.
Our YouTube video above contains the latest intraday technical analysis on the latest intraday technical analysis on US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
