📅 On April 1st, tensions flared as 🇮🇱 Israel targeted the Iranian consulate in Damascus; 🇮🇷 Iran retaliated with a barrage of missiles and drones on the night of April 13th to 14th, an event that caught 🌍 the world's attention. To prevent a spiral into a cycle of violence, Western governments issued 🔴 red alerts. An escalation into a full-scale regional conflict could have devastating global effects.Led by the United States, Western countries condemned Iran's actions. The international response varied:Turkey urged Iran to prevent further escalation; China adopted a policy of appeasement; 🇷🇺 the Russian Foreign Ministry called for "restraint" from all parties; and Syria, an ally, emphasized Iran's "right to self-defense."🌐📉 The Middle East's unrest has global implications, affecting capital
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🚨💥 Iran-Israel Conflict: Gold vs. U.S. Treasuries for Assets?
🚨💥 Iran-Israel Conflict: Gold vs. U.S. Treasuries for Assets?
Weekly Insights: AI Hype Overshadows Macro, But Be Careful of AI Server Speculations
1. Performance of Global Equity Indices(in US Dollar) Source: Bloomberg 2. Key Market Themes: U.S. job market is weakening. Powell said “a bit more evidence” is needed for rate cut The United States added 275k non-farm jobs in February, slightly higher than the market consensus of 200k. However, the unemployment rate rose by 3.9% in February, higher than market expectations. Meanwhile, average hourly wages increased by only 0.1% month-on-month, and full-time employee wages year-on-year growth declined to almost 0, lower than market expectations. Taken together, this Feb NFP report further confirms that the U.S. job market is weakening. Source: Wells Fargo Fed Chairman Powell said “a bit more evidence” is needed for rate cut in his testimony to congress, pushing the rate cut pricing by the
Weekly Insights: AI Hype Overshadows Macro, But Be Careful of AI Server Speculations
Prepare For The Unexpected--2024's Outlook For Major Assets
1. Review of Asset Performance in 2023.As the path curves around the mountain peak, the rivers and mountains bask in the moonlight. Yesterday, we removed our masks to embrace the world; today, conflicts arise, creating a complex and bewildering situation. War or peace, inflation or rate hikes, investing or lying flat, truth and illusion intertwine, marking another year.In 2023, global political unrest prevails, conflicts in Eurasia persist, and the fires of war reignite in the Middle East;In 2023, the global economy tends to stabilize, soaring inflation finally sees a decline, and the ongoing interest rate hikes show signs of a turning point;In 2023, global technology is on the verge, ChatGPT triggers the AI wave, and SpaceX sparks human imagination;In 2023, global assets experience a mix
Prepare For The Unexpected--2024's Outlook For Major Assets
Institution Views on 2024 Outlook: Can We Buy Tech Giants?
With the end of the year approaching, major institutions begin to provide outlook for US stock market in 2024.According to some reports released so far, most institutions are slightly more optimistic this year compared with the widespread concerns last year.We have selected three outlook reports from David J. Kostin team of Goldman Sachs, Michael J Wilson team of Morgan Stanley and the Mark Haefele team of UBS.Let’s look at their forecasts for the US stock next year, as well as their analyses and judgment on important issues and directions.Forecasts for S&P 500; Chart made by Tiger_Insights1. Up or down? US stocks growth forecast for 2024It is difficult to accurately predict the rising/falling points of US stocks next year. It is common for institutions to be "prove
Institution Views on 2024 Outlook: Can We Buy Tech Giants?
Data Board | Will US Stock Market Crash or Bottom in October?
In history, it's quite a coincidence that two major stock market crashes in the U.S. occurred in October.In October 1929, the Great Depression began to spread, leading to a massive stock market crash.In October 1987, the U.S. experienced Black Monday, with the Dow Jones Industrial Average plunging by over 20% in a single day.With the conflict in the Israeli-Palestinian region, the U.S. dollar is surging. On one hand, there is the significantly better-than-expected non-farm employment data, and on the other hand, the Federal Reserve's unwavering commitment to its inflation target, leaving many investors feeling "chilled to the bone" about this October.1. Is October really the month of stock market crashes in the U.S.?The following chart provides the average returns and daily average volatil
Data Board | Will US Stock Market Crash or Bottom in October?
Long-term opportunity in chip design, manufacturing, and production of the Semiconductor Industry
There are still medium- and long-term opportunities in chip design, manufacturing, and production in the semiconductor industryApart from whether the U.S. stock index $S&P 500(.SPX)$ $NASDAQ(.IXIC)$ $DJIA(.DJI)$ will fall or continue to rise in the second half of the year, there are some medium- and long-term opportunities that investors should seize. For example, the semiconductor sector, which is benefiting from generative AI, and companies that are benefiting from the shift in manufacturing and chip computing.1. The semiconductor industry benefiting from Generative AI:The semiconductor industry is on the upswing. In Q2, revenue levels across the global se
Long-term opportunity in chip design, manufacturing, and production of the Semiconductor Industry
Institution Views|Fed Will Raise Rates in September the Last Time and Plan Cut in 2024
1. The Fed's rate hike this year is coming to an end, and the rate will be raised no more than once in September.Federal Reserve Chairman Powell said at the July FOMC meeting that the path of future rate hikes will depend on U.S. economic data, meaning as long as core inflation can continue to fall, the likelihood of the Fed raising rates further is not that high.Jerome Powell - WikipediaBelow are three factors that deserve attention and could affect inflation data (CPI) in the future:The impact of the July increase in crude oil prices on CPI: There was a relatively significant increase in crude oil prices in July, which may mean that CPI does not return to 2% as quickly.The influence of U.S. residential rental prices: The statistical subitem US CPI includes owner-equivalent rent, while th
Institution Views|Fed Will Raise Rates in September the Last Time and Plan Cut in 2024
Institution Views: Dissecting Disinflation's Impact on Earnings and Sectors
The resilience of the US economy is a testament to its robust fundamentals and adaptive strategies. As disinflationary currents flow, two heavyweight reports - one from Morgan Stanley and the other from Barclays - offer deep dives into its nuanced effects on earnings and sectoral dynamics. Disinflation's Broader Brushstrokes on Earnings Disinflation, while signaling a deceleration in price rises, casts a multifaceted shadow on corporate earnings. Morgan Stanley underscores that while disinflation can offer a reprieve from escalating costs, the lingering effects of temporary pricing power can still pose challenges. Companies that ramped up prices in an inflationary environment might find themselves cornered if consumers, sensing the disinflationary trend, anticipate price stabilization. Thi
Institution Views: Dissecting Disinflation's Impact on Earnings and Sectors
H1 Recap & Outlook | Where to Find US Bulls Under High Returns, High Inflation and High Rates Era?
Looking back at the first half of this year, Fed remains firm in raising interest rates, and the US benchmark interest rate has broken through the 5% . At the same time, although global inflation has fallen, it is still far from the 2% target. “Higher For Longer” for the interest rate has gradually been verified. The birth of ChatGPT has triggered the fantasy of artificial intelligence to greatly improve production efficiency, which is the biggest surprise in the first half of this year. Under these multiple influences, the United States may enter the era of "high interest rates, high inflation, and high growth" in an all-round way. Looking forward to the second half of the year, how will the market perform?I. Asset Performance Review in H11. Major asset returnsLe
H1 Recap & Outlook | Where to Find US Bulls Under High Returns, High Inflation and High Rates Era?
Data Board | Predicting the Future? Can Fed's Dot Plot be Trusted?!
At the June FOMC meeting, Fed unsurprisingly paused the rate hikes. However, Fed Chairman Powell stated during the subsequent press conference, “This pause does not imply that the benchmark interest rate has reached its peak.” The dot plot released at the same time indicated that FOMC members anticipate two additional rate hikes totaling 50 bps by the end of this year.Strangely, the market seemed unfazed by such hawkish remarks, and US stocks only experienced a slight decline on that day. Looking at the Fed Fund Futures traded in the market, the expected benchmark interest rate for December not only failed to surpass previous highs but also remained significantly lower than the median of 5.625% indicated in the Fed's dot plot.Source: BloombergSo, is the benchmark interest rate indicated by
Data Board | Predicting the Future? Can Fed's Dot Plot be Trusted?!
Data Board | Calendar Effect Analysis Before Quadruple Witching Day
In the US stock market, the monthly OE (option expirations) day (the third Friday of each month) is often a focal point for the market. I. Weird Wednesday?Some investors have pointed out that based on their personal trading experience, the Wednesday of the week preceding the monthly OE day tends to be weird, with the U.S. stock market facing significant downside risks.For example, on the recent date of June 7th, both $S&P 500(.SPX)$ and $NASDAQ 100(NDX)$ experienced varying degrees of decline. Therefore, we conducted the following data analysis to explore the characteristics of this so-called Weird Wednesday. 1. Does Weird Wednesday perform worse than regular Wednesday?As shown in
Data Board | Calendar Effect Analysis Before Quadruple Witching Day
Market Review| Where is the AI frenzy taking the US stock market?
Entering May, the most dazzling narrative in the global market belongs to $NVIDIA Corp(NVDA)$ , the leader in AI computing power, with its stellar financial report. The day after the financial report, its market cap exceeding one trillion.Influenced by NVIDIA's strong financial report, the soap opera of the U.S. debt ceiling negotiations and the increased probability of a rate hike in the June FOMC meeting, along with other negative market news, were all set aside. The tech stocks in the U.S. stock market experienced the "melt up" that we anticipated in our Market Review| Rate Hike Pause, Stagflation Continues, Cherish the Good Times Before Recession in early May. However, global as
Market Review| Where is the AI frenzy taking the US stock market?
Institution Views| Market Liquidity Analysis Following Debt Ceiling Agreement in Principle
As of May 29th, President Joe Biden and House Speaker Kevin McCarthy have announced they have agreed in principle to raise the US debt ceiling and avert a default. For the market, reaching a debt ceiling agreement may mean the start of a new round of liquidity shocks, as it would allow for the issuance of new US Treasuries.According to the US Department of Treasury forecast, approximately $1.46 trillion US Treasuries are expected to be issued in Q2 and Q3 of this year, which will inevitably absorb a significant portion of market funds.Source: Tebon SecuritiesWhy new issued Treasuries may cause a liquidity crisis?Generally, when new Treasuries are issued, the balance of TGA on the liability side of Fed will be increased. Assuming the asset side remains unchanged, the issuance leads to the d
Institution Views| Market Liquidity Analysis Following Debt Ceiling Agreement in Principle
Data Board| US Treasury Yield Spread Bottoms? Bonds Performance Will Take the Lead!
During the FOMC meeting in early May, Fed Chairman Powell hinted at a "halt to interest rate hikes." Meanwhile, the interest rate market have already pricred in at least two 25 bps rate cuts by the end of this year. For reference, the current benchmark rate is 5%-5.25%. Therefore, barring any major surprises, the deep inversion of US Treasuries yield curve is already on the path to bottoming out and rebounding. So, during the process of transitioning from an inverted yield curve to a positive one, how will major asset classes around the world perform? What investment opportunities will arise? Let's look at how the data speak:Six instances of yield curve inversion over half a centuryAs the name suggests, yield curve inversion happens when a yield curve graph of (typically) government bonds
Data Board| US Treasury Yield Spread Bottoms? Bonds Performance Will Take the Lead!
Market Review| Rate Hike Pause, Stagflation Continues, Cherish the Good Times Before Recession
On May 4, Fed finally gave a dovish meeting statement after the May FOMC meeting. The statement said outright that it will decide which "additional policy firming" may be appropriate based on data, rather than decide the magnitude of rate hikes based on data.It implies that the current cycle of 500 bps rate hikes may probably hit the pause button. Market implied fed fund rate, which went down by about 20 basis points after the meeting.Source: CNBCAlthough Powell did not explicitly say in press conference that he would not raise rates thereafter, and that it was not time to discuss a rate cut, we believe that the market's focus will change from how high to how long thereafter.Let's review the performance of major global asset classes and strategies in the last month.I. Asset Performance Rev
Market Review| Rate Hike Pause, Stagflation Continues, Cherish the Good Times Before Recession
Institution Views| How Far Away is the US Debt Default?
For a long time, US Treasuries have been widely regarded as the world's safest "risk-free assets" because the United States, as the world's strongest country, has never defaulted on its debt.However, on January 19th of this year, the US government's debt had already reached the statutory limit of $31.38 trillion, which means that the US Treasury Department will not be able to continue issuing Treasury bonds until Congress passes relevant legislation to raise the debt ceiling.Without external assistance, the US Treasury Department has been forced to use its Treasury General Account and cut or suspend unnecessary expenses. In addition, the high Treasury yields have further increased the interest expenses for the US government. This combination of factors has made the US Treasury Department i
Institution Views| How Far Away is the US Debt Default?
Data Board| Is “Sell in May” True? Check Opportunities about Calender Effect!
The saying "Sell in May and Go Away" is a well-known phrase in the US stock market, which implies that the performance of the US stock market from November to April, during the half-year period, tends to be better than the performance from May to October during the other half-year period. Some people attribute this calendar effect to the impact of the mid-April deadline for US individual income tax filing, while others believe it is because most fund managers tend to be more aggressive in investing at year-end and year-beginning, and prefer to take vacations during the middle of the year. So, is this saying really true? Let's look at the objective data.1. Is the "Sell in May" true in US stock market? The chart below shows historical data from nearly 40 years (1985-2022) of the three major
Data Board| Is “Sell in May” True? Check Opportunities about Calender Effect!
Apple Launched 4.15% APY Account? But Tiger Vault Offers a 4.81% Yield!
On April 17, $Apple(AAPL)$ released news that put the US banking industry under pressure. Apple's Apple Card high-yield savings account in cooperation with $Goldman Sachs(GS)$ was officially launched.According to Apple's official announcement, Apple Card offers users an annual percentage yield (APY) of 4.15%, which is more than 10 times the current average savings deposit rate in the United States. Plus, the account requires no fees, no minimum deposit amount and no minimum requirements...Daily Cash will be automatically deposited into the user's savings account if the Apple Card is activated, making it a truly senseless and seamless way to pay for everyday purchases. In addition, users can also freely tran
Apple Launched 4.15% APY Account? But Tiger Vault Offers a 4.81% Yield!
Data Board: How Did Global Assets Perform Before & After Fed's Last Rate Hike?
On April 12th, US CPI and the minutes of the March FOMC meeting were released. After the two key events, the pricing of Fed rate futures and the Wall Street investment banks led by Goldman Sachs' chief economist Jan Hatzius all generally expect that the Fed will raise interest rates for the last time at the May FOMC meeting.So what has been the performance of US, Hong Kong, and other major global asset classes before and after the last time the Fed raised interest rates in history?The following chart shows the 16 times the Fed has raised interest rates for the last time since 1971. In the year following these events, the US economy has gone into recession 8 times and not gone into recession 8 times. Therefore, we will first look at the historical performance analysis of these two situation
Data Board: How Did Global Assets Perform Before & After Fed's Last Rate Hike?
Q1 Review: Where Are Opportunities After Bank Crisis & OPEC Production Cut?
Last weekend, OPEC+ announced a production cut, causing a surge in crude oil prices and making the current market narrative more confusing.On the one hand, the footsteps of the recession are getting closer. Despite the temporary relief of the European and American banking crises after the Fed provided temporary liquidity, the erosion of bank profit margins and the tightening of credit in a high-interest-rate environment have not fundamentally changed.On the other hand, stagflation has not ended. The rise in crude oil prices is likely to prolong the high-inflation level and limit the Fed's pivot.How should we allocate our investment portfolio?I. Q1 Asset Performance Review1. Major asset returnsSource: Bloomberg. Denominated in USD; 2023/1/1-2023/3/31Looking back at Q1 2023, major global ass
Q1 Review: Where Are Opportunities After Bank Crisis & OPEC Production Cut?
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