🔥🌡️ Fed’s Powell Softer on Rate Cuts!

Hala,

🚐🍦 An ice cream van took an unexpected dip in Cornwall!(1) 🌊🤣 Onlookers filmed as waves tossed it around like a beach ball. Thankfully, a heroic farmer with a tractor saved the day when the tide went out! 🍦🚜 #IceCreamGoneWild #CornishWaves

amana’s Take

• The World Gold Council reported a second consecutive month of inflows for Gold ETFs in June, increasing total holdings by 18 tonnes to 3,106 tonnes. Meanwhile, China's central bank paused its Gold purchases, maintaining reserves at 72.80 million troy ounces.
• Gold prices continue to benefit from rate cut speculations and geopolitical uncertainties, although China's halt in Gold buying may temper bullish sentiment. Key economic indicators and Fed speeches will be closely monitored for clearer signals on the future interest rate trajectory.

Stock Market Update

📈📉 US stocks rode another financial rollercoaster on Tuesday as Fed Chair Jerome Powell warned about the risks of keeping interest rates high for too long. The S&P 500 added 0.07% to hit a fresh record of 5,576.98. The Nasdaq 100 also gained 0.07% to reach 20,453.02, while the Dow dipped 0.13% to settle at 39,291.97.(2) Looks like another day of twists and turns on Wall Street! 🎢🛼

📊⏸️ Meanwhile, Mideast stocks closed mixed largely for the same reason. Abu Dhabi was flat at 9,136, while Dubai eased 0.1% to 4,078.(3) ↗️↘️

🔥📉 Powell to Turn Down the Heat on Rates?

Federal Reserve Chair Jerome Powell might be dialing down the economic thermostat, aka lowering interest rates, after hinting that a further cooling in the labor market may no longer be necessary.(4) During his congressional hearing, Powell acknowledged "considerable progress" in bringing inflation closer to the Fed’s 2% target. However, he remained cautious about when interest rates might be lowered. This slight shift in tone suggests the Fed might be warming up to the idea of rate cuts. 📉🔥

📅🔢 Key Data Points:

• Inflation: Fell to 2.6% in May from 4% a year earlier.
• Job Market: Unemployment rate rose to 4.1% in June from 3.7% in December.
• Interest Rates: Fed's benchmark rate held between 5.25% and 5.5%.
• Job Growth: Average of 200,000 jobs added per month this year.

🌡️🗓️ Timing the Cooldown

Powell's remarks indicate a shift from the Fed's prior stance that an overheated labor market was a primary inflation driver. Recent data shows a slowdown in hiring and a mild rise in job seekers, partly due to increased immigration. While Powell suggested that it's a matter of "when" not "if" the Fed will cut rates, he avoided committing to specific timing. Projections indicate potential rate cuts this year if inflation continues to ease and growth remains steady. The next Fed meeting on July 30-31 is anticipated to provide clearer hints on future rate actions. 🌡️🗓️

Closer to Home 

• 💰 In H1 2024, Saudi Arabia dominated MENA's venture capital scene, securing SAR 1.5 billion ($412 million) in VC funding, which represents 54% of the region’s total VC investments—an impressive leap from its 38% share a year ago!(5) 🤯
• 🚀 Ras Al Khaimah Government increased its stake in RAK Properties to 34%, banking on robust 2023 earnings and confidence in projects like Mina Al Arab and Hayat Island(6)—talk about making waves in their real estate game! 🤑
• 📝 Meanwhile, MENA start-up investments took a 46% plunge to $882 million in H1 2024, down from the $1.6 billion raised in H1 2023, with the Gaza conflict casting a gloomy shadow on the regional start-up ecosystem.(7) 👀

What Else Is Trending

• 📉 BP shares took a 4.3% hit on Tuesday as the company signaled a possible $2 billion impairment for Q2, feeling the pinch from weaker refining margins—looks like their financials hit a rough patch.(8) ↘️
• 🛢️ Meanwhile, oil prices slid on Tuesday as fears of prolonged supply disruptions from Hurricane Beryl eased. Brent fell 1.3% to $84.66 a barrel, while WTI shed 1.1% to $81.41.(9) ⛽
• 🪙 Lastly, gold prices glimmered higher on Tuesday as the US dollar remained soft. Spot gold gained 0.2%, glittering at $2,363.71 per ounce.(10) 🌟

💬Quote of the Day

"For a long time, the risks were more that we would fail to hit our inflation target." — Jerome Powell

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Sources:-  (1) Sky News, (2) (8) CNBC, (3) (5) (6) (7) (10) Zawya, (4) Wall Street Journal, (9) Reuters