To The Moon

With an impending meeting between 31 Oct - 1 Nov of the Fed officials to decide their next monetary policy move, the markets have been treading cautiously between optimism from latest job data showing a still robust labour market and pessimism from the sticky inflation that has shown no consistent signs yet of cooling to the Fed’s long-term target of 2%, increasing the odds that the Fed may resume its rate hike before the end of this year and hold the rate higher for longer.

US government 10-year bonds have also reacted with record yields in recent years, igniting flees from risky assets like equities to the safety of US dollars.

These have weighed on growth stocks like $C3.ai, Inc.(AI)$ and $Palantir Technologies Inc.(PLTR)$ , speculative bets on $Semiconductor Bull 3X Shares(SOXL)$  and meme stock the likes of $AMC Entertainment(AMC)$ , as their borrowings to fund future growth become more costly and their valuations come under pressure.

These are not helped by a slowing economy from the lagging effects of previous rate hikes and persistent geopolitical tensions, offsetting hopes for a soft landing of the economy and raising the odds of stagflation.

Recent hype on artificial intelligence has yet to bring home the bacon and propel explosive growth in the technology sector, as the AI revenue takes time to materialise, weighing on C3.ai, Palantir Technologies and the semiconductor sector SOXL that were originally expected to ride on the next phase of growth driven by AI demands.

Nevertheless, recent resurgence in global COVID-19 cases led by the emergence of new sub-variant may benefit $Sea Ltd(SE)$ , as more consumers turn to its e-commerce and online gaming platforms for shopping and entertainment, while at the same time discouraging outdoor activities, so that earlier improving turnouts at AMC’s theatre chain may start to see renewed declines as customers shun the cinema halls and opt for online movies streaming options.

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