To The Moon

The U.S. debt ceiling refers to the maximum amount of Treasury Bond issued in the United States within a certain period approved by the U.S. Congress.

Before 1917, every time the US government needed to borrow money, it had to obtain authorization from Congress. During World War I, in order to improve the flexibility of the state apparatus, legislators decided to grant the government a package of borrowing authority, provided that the total borrowing amount of the federal government (excluding local governments) was less than the existing quantitative limit. At present, the debt ceiling of the United States is 31.4 trillion yuan. According to the US Treasury Secretary, the US government will reach the ceiling as early as June 1. If it cannot increase its debt, the government will have "no money" to spend, including repaying the interest of the past Treasury Bond, which constitutes a "default".

Of course, according to historical experience, the two parties in the United States will always negotiate the upper limit at the last minute, so as to avoid "default". What's more, in the debt ceiling negotiations, the political game between the two parties constantly brings some surprises to the market from time to time, such as the illusion of suddenly "almost talking".

Although almost everyone thinks that the talks between the two parties will come together in the end, the current market has had the shadow of banking crisis before and the fear of economic recession after, and the overall expectation is very fragile. I am afraid that this sudden "surprise" will scare the US stock market.

Strategies corresponding to US stock index

The market is still waiting for the exact news of the debt ceiling negotiations, and the rebound is negotiated. If the negotiation is postponed, the price will be reflected first, and the price will fall first. Since March this year, everyone has not heard a few good news, and pessimistic expectations are still the key factor restricting the upward movement of US stocks. Therefore, the strategy is still not optimistic about US stocks, and at least it will not chase higher US stocks.

At present, S&P is still hovering below 4200 points. It has been three months since I told you this point, and there is still no sign of breakthrough. If you look forward to being more friends, you must be cautious. Friends who short US stocks can short along the S&P 4200 point, and cut down if they break through. How much they fall depends on how much the market reacts to bad news.

Although the trend of the Nasdaq is stronger than that of S&P, it is still in a state of strong expectation (the Fed cut interest rates) and weak reality (still in the high interest rate range). Once revised, the decline of the Nasdaq is larger than that of S&P. At the same time, around 13700 is a strong expectation area where the market thought that the Fed would slow down the rate hike turning point last year, which can be understood as a certain hold-up, and the Nasdaq is prone to adjustment here.

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