The non-farm payroll report released yesterday showed that the number of new jobs was revised down by 818,000. Normally, such data would have triggered a sharp market decline, but due to expectations of a rate cut, the market did not react.
The market is waiting Powell’s speech on Friday.
Market tend to rise after Jackson Hole meeting?
According to DataTrek Research, there is some good news at the moment: historically, U.S. stocks tend to “rise more and fall less” around the time of the Federal Reserve's annual economic policy symposium.
The S&P 500 index tends to rise in the two weeks before and after the Jackson Hole Symposium, especially following the speech by the Federal Reserve Chair.
Data from DataTrek shows that since 2010, the average return of $S&P 500(.SPX)$ during the two weeks around the Jackson Hole Symposium has been 0.9%.
However, there are concerns that a rate cut could lead to a “sell the fact” scenario. If economic data continues to deteriorate, even a rate cut might not be enough to reverse the downward trend.
How do you view the rate cut expectation?
Will rate cut bring more volatility for stock market?
Or “sell the fact“ will happen in September?
Leave your comments and also post to win at least 5 tiger coins~
Comments
about time to cut rate... how long to wait [Thinking] need to action before situations get worse...
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How do you view the rate cut expectation?
Will rate cut bring more volatility for stock market?
Or “sell the fact“ will happen in September?
Leave your comments and also post to win at least 5 tiger coins~
此外,2024 年 9 月的降息是否会导致通胀进一步走高,从而导致需要在不久的将来加息。
Also, would the rate cut in September 2024 cause inflation to come back even much higher, resulting the need to raise rate in the near future.
1. Impact on Stock Market Volatility: A rate cut can introduce volatility into the stock market, particularly if the cut is unexpected or if it leads to uncertainty about future monetary policy. While rate cuts are usually seen as supportive for equities due to lower borrowing costs and potential economic stimulus, the actual market reaction can be complex.
2. "Sell the Fact" Scenario: This phenomenon could occur if investors have already priced in the rate cut and then decide to take profits once the actual cut is announced. If the rate cut is widely anticipated and has been factored into stock prices, the announcement itself might not drive further gains.
In summary, while a rate cut is typically supportive for stocks, it can also lead to increased volatility or a "sell the fact" reaction, depending on how the market had anticipated and positioned itself for the policy change.
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