To The Moon

Recently, the upward trend of the US stock market is subject to the ever-increasing expectation of high interest rates, showing a high downward trend.

Last week, due to the resilience of US macro data, strong job market data, and the hawkish influence of the minutes of the Federal Reserve's monetary policy meeting, the 10-year US bond yield continued to rise, the risk appetite weakened, and the three major US stock indexes collectively entered into correction , while the the US Dollar Index fluctuated upward.

In fact,it was not only US stocks that felled, but also MSCI Global Market Index closed down across the board, among which MSCI Asia (except Japan), Asia-Pacific region (except Japan), BRIC countries and Asia were among the top losers.

US Treasury bond yields have climbed to a new high

Last week, the US macro data was generally strong,

which helped the expectation of high interest rates to be strong again

First, retail sales in the United States exceeded expectations in July, and service consumption remained strong.

The data released on August 15th showed that the retail sales in the United States increased by 0.7% month-on-month in July, with the previous value of 0.3% and the expected value of 0.4%. The retail sales data in the United States in July exceeded market expectations.

Increased market confidence in the strength of the US economy made the situation at the September interest rate resolution meeting no longer clear, and hawkish concerns heated up again.

Secondly, the US real estate investment data in July exceeded market expectations,

which supported hawkish concerns.

According to the data released on August 16, the total number of new housing starts in the United States in July recorded an annualized 1.452 million, with a previous value of 1.398 million and an expected 1.448 million; In July, the total number of construction permits in the United States recorded 1.442 million, with the previous value of 1.441 million and the expected number of 1.463 million.

The real estate investment data in the United States in July exceeded market expectations. To a certain extent, this eased the pressure of continuous downward exploration of manufacturing PMI. In addition, the current service industry consumption remained resilient, the manufacturing PMI gradually entered the bottoming stage, the market confidence in the US economy gradually increased, and the hawkish disturbance warmed up again.

Finally, the number of jobless claims in the United States at the beginning of the week also exceeded expectations,

and the yield of 10-year US bonds rose at a high level.

According to the data released on August 17th, the number of jobless claims in the United States recorded 239,000 in the week ending August 12th, with the previous value of 250,000 and the expected number of 240,000.

The number of jobless claims in the United States exceeded market expectations at the beginning of the week. The non-farm payrolls data in June showed that the job market was still strong, and there was still a gap in the American labor market, which clearly revealed the resilience of the American economy. The yield of 10-year US bonds continued to rise, and the risk appetite of equity market cooled down.

Looking ahead, Jackson Hole annual meeting is the top priority

In the coming week, we need to focus on the speech attitude of Fed officials and Powell's speech at Jackson Hole Annual Meeting, which is likely to interfere with interest rate expectations and affect the risk appetite of equity markets.

Considering that some hawkish expectations have been priced in advance recently, it is expected that with the landing of uncertain factors, the yield of 10-year US bonds may gradually stabilize, and the short sentiment of US stocks may gradually slow down.

However, according to Mr. Gan Canrong, a Private equity manager who has studied the stock index for many years

@Ivan_Gan

since the US bond yield will continue to fluctuate at a high level, the market panic has not been released. After the US stock market rebounded slightly, there may be another collapse before the negative impact on hawks completed.

His view:

At present, the decline of US stock index is not too much, 10% has not arrived, and it may rebound before Powell speaks next week.

According to the characteristics of the decline process of the US stock index last year, almost all the rebound highs in the decline process are located near the 20-day moving average, which means that the 20-day moving average will continue to be the current watershed between long and short. Friends who intend to short may consider arranging short positions at the 20-day moving average.

The highest risk period of the whole financial market this year is in the current August-October, so it is a victory to avoid loss in this period.

Even the most powerful crude oil price of recent times may unexpectedly fall sharply in the face of economic recession.

Therefore, As long as the Federal Reserve is willing to let go and enter the interest rate cut cycle, the relatively chaotic financial market will enter the stage of easy trading again. Therefore, as long as the strength is preserved now, there will be many opportunities in the future.

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