Does AI still have potential? What will the week bring?
Donald Trump's meeting with Xi Jinping, though brief, yielded the desired results. China agreed to postpone restrictions on rare earth exports for one year, and the US side hopes this truce will be extended annually. Driven by investor optimism, US stock indices reached historic highs.
Does AI still have potential?
Federal Reserve As expected, the Fed cut interest rates by 25 basis points. However, last week's meeting changed the market landscape. Lower inflation in September and a further cooling labor market had made December a near-certainty for a cut. However, Powell's communication led to a decrease in the probability of a December cut from 90% to 63%. Historically, interest rate changes with such a probability haven't occurred very often.
While the past week brought new all-time highs for the indices, the latter part of the week saw a clear battle between buyers and sellers. The quarterly results of digital giants appear to be key to the ongoing trend. Apple, a consumer electronics icon, continues to face serious challenges related to the situation in Asia and the trade war.
The meeting between the leaders of the United States and China, however, offers hope for at least a semblance of friendship between the world's two largest economies. Beijing will resume imports of American soybeans, and both countries will suspend mutual port dues. China will also begin purchasing American energy, and the United States has announced its readiness to increase oil and gas exports. So, are we witnessing a return to "normalcy" after months of chaos triggered by Trump's tariffs?
- Apple – will the apple tempt Asia?
- Fed decision – rates down, dollar up?
- Is this the end of the trade war?
About the host
Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.
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