Stocks rally as yields fall, softening US data, cryptos impress

US stocks got a boost from another round of decent earnings and as softening economic data that supports the argument for the Fed to downshift its tightening pace after next week’s policy meeting. ​ Earnings from UPS, General Motors and General Electric did not unravel the optimistic outlook corporate America has been providing this earnings season. Wall Street is locked into mega-cap tech earnings this week, so the current rally will likely lose steam until we hear from both Alphabet and Microsoft after the close.

US Data

A few economic reports all told a similar story today that the economy is weakening. ​ The FHFA and S&P core logic housing reports both showed house prices fell in August. ​ The Conference Board’s consumer confidence index declined to a 3-month low as a weakening labor market weighed on the present situation. ​ The Richmond manufacturing index also showed weakness that included decent declines with both prices paid and received.

A weakening economy will bring down inflation and that is good news for long-term investors looking to get back into equities.

Crypto rebounds

Cryptos are rebounding nicely as rates slide and the dollar weakens. ​ Both bitcoin and ethereum are gaining momentum as Wall Street musters up a few strong sessions. ​ The economy is showing further signs of weakening and that is helping investors grow confident that the Fed will be in a better position to downshift its tightening pace after next week’s FOMC meeting.

This week is filled with a handful of major risk events that could help keep this week’s broader market risk-on rally going. ​ Massive tech earnings, a couple major central bank decisions, and the first look at Q3 GDP will all weigh on risk appetite this week. ​ To the upside, bitcoin should find resistance at around $20,500, while $18,500 provides strong support. ​

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.