Plunge warning? Can the market reproduce the "312" or "519" type of collapse?
As the market enters the downward channel again, does it indicate that the prelude to a new round of plunge has quietly opened? Will history repeat itself and let us witness the thrilling "312" or "519"? Let us analyze the current market in depth to explore whether the four high-risk factors for a sharp plunge have been brewing.
Four major risk warning signals:
1. Macro liquidity crisis looms
Historical data shows that in the Fed's interest rate hike cycle, such as the two interest rate hikes in 2007-2008 and 2018, the S&P index fell sharply, with a drop of up to 20%. At present, the Fed has maintained a high interest rate level of 5.25%-5.5% for a year, the market's capital tension has intensified, and the macro crisis is imminent.
2. Risk asset reshuffle under the expectation of interest rate cuts
Recently, the unexpected decline in inflation data and PCE data has caused the market's expectations for the Fed's interest rate cut in September to rise sharply. According to CME data, the market generally believes that the probability of a rate cut in September is 66.5%, a significant increase from last month. The Fed's statement at the June interest rate meeting sent a clear signal: whether it is weak employment or reduced inflationary pressure, it may prompt the Fed to cut interest rates in advance.
However, on the eve of a rate cut, the market often conducts a round of deep cleaning of risky assets to release accumulated risks. Therefore, any disturbance in the current market environment may become a fuse that triggers a plunge.
Summary:
Faced with the macro liquidity crisis, the lack of funds at the end of the interest rate hike cycle, and the expectation of an upcoming interest rate cut, the market is entering a period of uncertainty. Historical experience tells us that risky assets at this time are extremely vulnerable to heavy losses. Investors need to remain highly vigilant, pay close attention to market dynamics, and be prepared for risk prevention and control. In the coming storm, choose to stick to it or avoid risks? This will be an important choice that every investor must face.
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