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Highlights
- JPMorgan team denies chances of bull run despite rate cuts looming.
- Mislav Matejka and team share insights on the market's current state.
- The crypto market braces for impact.
JPMorgan’s latest remarks on Fed rate cuts have raised severe concerns among traders and investors globally. Today, Despite expectations of interest rate cuts soaring, JPMorgan’s head of global and European equity strategy dismissed chances of a bull market ahead. The statement has promptly sparked global discussions with the stock and crypto market expecting sentimental shifts ahead.
JPMorgan Analyst Stays Bearish On Market’s Future
As per a recent report by Fortune dated September 3, Mislav Matejka’s team said, “Any policy easing would be in response to slowing growth, making it a “reactive” reduction.” This statement by JPMorgan’s team is primarily attributable to expectations of Fed rate cuts soaring with the upcoming September meeting.
The report cites that the seasonal trend is another difficulty, with September historically being the worst month for U.S. stocks. “We are not out of the woods yet,” Matejka stated. “Sentiment and positioning indicators look far from attractive, political and geopolitical uncertainty is elevated, and seasonals are more challenging again in September,” he adds.
Meanwhile, the S&P 500 recovered after slumping in the early days of August, reaching a record high with the anticipation that the Fed would start cutting interest rates at its next policy meeting on September 17-18. The MSCI All-Country World Index, a global equity index, is also currently at an all-time peak. Simultaneously, the S&P 500 was up 1% today.
Although the broader market remains optimistic about Fed rate cuts in September, its wider impact is anticipated to stall the stock market’s movement near a record high, per JPMorgan team mentioned above. The crypto market also anticipates further turbulence with the upcoming US jobs data.
Crypto Market Braces For Impact
Notably, the crypto market reacted skeptically to the JPMorgan Fed rate cut news. Industry participants express concerns as the crypto market shows sluggish performance despite interest rate cut expectations.
BitMEX co-founder Arthur Hayes took to X today, revealing why the September rate cuts aren’t falling into line. According to Hayes, ever since the hints of rate cuts in Jackson Hole, BTC price has sunk 10%. This market reaction contrasts usual expectations of risk assets gaining momentum with rate cuts. A recent Bitcoin price analysis by CoinGape further points out that the flagship coin can rebound from bottom support of $53500 or even $50000, bolstering future movements.
For context, Hayes reveals that the RRP facility’s effectiveness in comparison to T-bills is diverting funds away from risk assets. This explains why the market is not benefitting from the current rate-cut scenario. RRP (Reverse Repo) facility allows financial institutions to park money at the Fed for a return.
Meanwhile, JPMorgan’s remarks have echoed a buzz across the broader industry, rationalizing the current crypto market movement.
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