- Small-Cap Companies Gain the Most
- US500 remains above 5800 points
- The dollar is losing significantly, with the USDIDX dropping below 100 points
- Bond yields are falling
Lower PCE data is fueling gains in the stock market, with small-cap companies from the US2000 index leading the rally. Improved sentiment in risky assets is also supported by the weakening dollar, which has been struggling to hold the 100-point level for several days. At the time of publication, the USDIDX index is down 0.40% to 99.9000 points. Bond yields are also experiencing a sharp decline, with 10-year and 2-year yields falling to 3.75% and 3.59%, respectively.
The dollar index is at the lower boundary of a nearly 3-year consolidation channel. A sustained break below the 100-point zone could signal further declines. As a result, a cheaper dollar should continue to support stock and cryptocurrency markets.
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile app
Source: xStation 5
Buying demand in the market is supported by lower inflation readings from the 14:30 publication. The PCE inflation measure is favored by the Fed because it considers a broader basket of goods, and the weights of individual products are updated regularly based on need. Consequently, this means that PCE inflation is better able to reflect current inflationary pressures. Lower readings support speculation of a 50 bp cut at the November meeting. At the time of publication, the chances of such a move are 54% compared to 46% for a 25 bp cut.
US2000
The small-cap index is gaining 0.70% today, reaching 2250 points. However, in the longer term, compared to the US500 index, the small-cap index is clearly underperforming. It still needs 9% to reach a new ATH at 2450 points.
Source: xStation 5
Company Highlights
Bristol-Myers Squibb (BMY.US) shares jumped 2.6% after the FDA approved its novel schizophrenia treatment, Cobenfy, developed through its $14B acquisition of Karuna Therapeutics. This drug represents a significant advancement in schizophrenia treatment, targeting cholinergic receptors rather than traditional dopamine receptors.
BlackBerry (BB.US) shares declined over 7.5% despite surpassing FQ2 expectations and raising its FY2025 outlook, as its FQ3 revenue forecast fell short of consensus estimates, projecting $150M at the midpoint, below the $155M expected. The company also slightly adjusted its FY2025 revenue guidance, now expecting $591M to $616M.
Cassava Sciences (SAVA.US) decreases by 13.30% following a settlement with the SEC over "misleading claims" related to an Alzheimer's clinical trial. The company’s founder and former CEO, along with a former executive, will pay over $40M in penalties. Despite this, Cassava maintains its cash reserve outlook for year-end 2024 at $117M to $127M, with net cash use for operations expected to be $80M to $90M in the second half of 2024.
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
