The Fed’s 50 bps rate cut, the first in over four years, has shifted investor focus to messaging — with investors weighing whether the move means the Fed is attempting to avert a recession or is confident about economic growth.

Was the Fed behind the curve? Some investors are not convinced by Fed Chair Jerome Powell assurances that the US economy is on the right track, convinced instead that the atypically large rate cut indicates fear that the US is behind the curve, Reuters reports.

History says yes: This is mostly because, historically, jumbo cuts have come in the context of crises or otherwise major issues with the economy, the New York Times writes.

But others take it as a sign of confidence in the economy: On the other hand, many are taking it as a positive sign that the US will be able to stick a soft landing, especially considering economic growth data estimates, other investors said. Bloomberg’s latest MLIV Pulse survey also showed that 75% of respondents expect a soft landing after the cut.

Wall Street’s response following the cut on Wednesday signaled a broader view that the move was positive, with US stocks climbing through the week. The S&P 500 rose 1.4% throughout the week, the tech-heavy Nasdaq was up 1.5%, and the Dow Jones Industrial Average ended the week 1.6% up on where it was on Monday morning.

EGX30

30,938

+2.0% (YTD: +24.3%)

USD (CBE)

Buy 48.45

Sell 48.59

USD (CIB)

Buy 48.46

Sell 48.56

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

12,080

+1.3% (YTD: +0.9%)

ADX

9,439

-0.7% (YTD: -1.5%)

DFM

4,436

+0.3% (YTD: +9.3%)

S&P 500

5,703

-0.2% (YTD: +19.6%)

FTSE 100

8,230

-1.2% (YTD: +6.4%)

Euro Stoxx 50

4,872

-1.5% (YTD: +7.7%)

Brent crude

USD 74.49

-0.5%

Natural gas (Nymex)

USD 2.43

+3.7%

Gold

USD 2,646.20

+1.2%

BTC

USD 63,143.30

+0.5% (YTD: +49.4%)

THE CLOSING BELL-

The EGX30 rose 2.0% at Thursday’s close on turnover of EGP 5.5 bn (42.1% above the 90-day average). Local investors were the sole net buyers. The index is up 24.3% YTD.

In the green: Palm Hills Developments (+7.2%), Fawry (+5.7%), and GB Corp (+5.6%).

In the red: Ezz Steel (-2.9%), EFG Holding (-2.8%), and Alexandria Containers and Cargo Handling (-1.8%).

CORPORATE ACTIONS-

CIRA Education could pay a dividend of EGP 0.26 per share on its FY 2022-2023 earnings after its board approved the move, according to an EGX disclosure(pdf). The decision now rests with the ordinary general assembly, which is scheduled to meet on 15 October.

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