🚧A Turbulent September

September indeed came in line with expectations as a poor season for the equity market. Major indexes retreated despite been green in the early session. This marked one of the worst September for critical indexes such as the S&P 500 and Dow.

Despite Congress passing a stopgap funding bill to keep the government open till Dec 3, uncertainty continued to roll in the market. Moreover, the worries of weakening corporate profits in the coming quarters and the persistent awakening of rising bond yields unsettle investors when the time has arrived for the Fed to begin tapering.

Pika World sees this confluence of factors as a headwind to the stock market with the wildcard- Covid still in play.

💵Inflation runs Hot in Europe

Economic health is getting better in the UK. However, on the backdrop is fierce Inflation in the eurozone area that is hitting a 10-year high. As a result, the Bank of England and the European Central Bank is pushing ahead with the tapering.

The UK GDP jumped by 5.5% for the quarter ended in June, an upward revision from the 4.8% estimate. A key takeaway is that the BOE Governor had hinted that there is a strong consensus among the body members to raise the rate soon to tackle the hot Inflation.

France is also experiencing high Inflation, which sees at 2.7% on an annual basis. Likewise, Germany’s Bundesbank had also indicated that Inflation is likely to stay above 2% for most of 2022.

With the Inflation fear narrative back on track, Pika World focuses strongly on the sentiments of tapering among developed economies.

🧨Meme Stocks; Bed Bath & Beyond Tumble

Its latest reported earnings are short of analyst expectations, and it had cut guidance. This is a red light for investors despite the CEO’s confidence in their multi-year transformation plan. Moreover, it is likely to pressure momentum stocks as Pika World is incrementally shifting to a more cautious stance on momentum play in a more volatile environment.

📮What’s on the Menu Today?

At 8.30 pm, we will receive the Core PCE Price Index, which is expected to remain at 3.6%.

10 pm will see the release of ISM Manufacturing PMI for September. We are likely to see a reading of 59.6, comparable to the prior period.

Concurrently, we will have the Michigan Consumer Sentiment, which is likely to stay at 71.0, similar to the previous reading.

At 1 am, FOMC Member Harker will speak, and we are focusing on FOMC members insights on the economy’s health.

It is Oct 1, Friday, at 7.35 am in Singapore and 7.35 pm in New York. It is the first trading day of the new quarter. We wish all friends a restful weekend ahead and a prosperous start for the week.