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 later yesterday signaled a broader view that the move was positive, with US stocks rallying to continue their streak yesterday. The S&P 500 rose 1.7%, while the Nasdaq gained 2.6%.

MARKETS THIS MORNING-

Asian markets are also having a field day, with Japan’s Nikkei up over 2% as the JPY firmed against the USD after slipping earlier in the day, and ahead of the Bank of Japan’s interest rate decision. Hong Kong’s Hanseng and South Korea’s Kospi also jumped 1%. Meanwhile, Wall Street futures are slightly lower after yesterday’s rally.

ADX

9,500

+0.8% (YTD: -0.8%)

DFM

4,422

+0.7% (YTD: +8.9%)

Nasdaq Dubai UAE20

3,874

+1.3% (YTD: +0.8%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

5.0% o/n

4.0% 1 yr

TASI

12,080

+1.3% (YTD: +0.9%)

EGX30

30,938

+2.0% (YTD: +24.3%)

S&P 500

5,714

+1.7% (YTD: +19.8%)

FTSE 100

8,329

+0.9% (YTD: +7.7%)

Euro Stoxx 50

4,943

+2.2% (YTD: +9.3%)

Brent crude

USD 74.69

-0.3%

Natural gas (Nymex)

USD 2.34

-0.4%

Gold

USD 2,611.6

-0.1%

BTC

USD 62,765.73

+0.7% (YTD: -85.2%)

THE CLOSING BELL-

The DFM rose 0.7% yesterday on turnover of AED 372.6 mn. The index is up 8.9% YTD.

In the green: Takaful Emarat (+4.4%), BHM Capital Financial Services (+2.2%) and Dubai Electricity & Water Authority (+2.1%).

In the red: National Cement Company (-8.9%), Shuaa Capital (-5.0%) and Agility (-4.6%).

Over on the ADX, the index rose 0.8% on turnover of AED 2.5 bn. Meanwhile Nasdaq Dubai closed up 1.3%.

CORPORATE ACTIONS-

Dubai’s Amanat Holdings will distribute AED 75 mn in interim dividends for 1H 2024, according to a DFM disclosure (pdf).

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