Traders Bet Aggressively On Rate Cuts Ahead Of Jobs Data: 5 ETFs To Watch This Week
Portfolio Pulse from Piero Cingari
Investors are anticipating key labor market data this week, which could influence expectations for Federal Reserve rate cuts. Market probabilities for a 50-basis-point rate cut at the upcoming FOMC meeting have increased. Five ETFs, including TLT, UUP, SPY, IWM, and USO, are highlighted as potentially impacted by the labor data.
September 03, 2024 | 8:51 pm
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POSITIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) may rise if jobs data is cooler than expected, increasing rate cut expectations.
TLT is sensitive to interest rate expectations. Cooler jobs data could lead to increased rate cut expectations, benefiting TLT.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
The United States Oil Fund (USO) may see movement based on labor market data, as oil prices are closely tied to employment trends.
USO tracks oil prices, which are influenced by labor market data. Changes in employment trends could impact USO.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 65
NEGATIVE IMPACT
The iShares Russell 2000 ETF (IWM) may be vulnerable to labor market fluctuations, with potential declines if recession risks rise.
IWM, representing small-cap stocks, is sensitive to labor market data. Rising recession risks could negatively impact IWM.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 75
NEGATIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) is sensitive to labor data, with potential declines if employment trends disappoint.
SPY is influenced by labor market data as it affects consumer spending and corporate growth. Disappointing data could lead to declines.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 85
NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) may decline if jobs data disappoints, as seen in its 1% drop on Aug. 2.
UUP tracks the dollar's performance. Disappointing jobs data could weaken the dollar, leading to a decline in UUP.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70