Market Game US economic recession is about to begin, and great turmoil is on the way
The capital market has been very strange in the past two years. For US stocks, technology stocks have skyrocketed, while other stocks have not risen or even fallen. If investors buy the "Big 7", they will have considerable returns, but if they buy other stocks, they may lose money; the same is true for the multi-crypto market. If you buy Bitcoin, you will have better returns and experience the taste of the bull market, but if you buy altcoins, you may also lose money.
This is not a normal bull market, but more of a bubble bull market collectively promoted by institutions. US stocks are driven by artificial intelligence, and the crypto market is driven by ETFs.
In the past few years, under the background of unprecedented continuous interest rate hikes and balance sheet reduction, no matter how bad the CPI data is, the market will rise after it is announced. The core reason is the "economic prosperity" of the United States and the low unemployment rate.
But the CPI data released yesterday was the first month-on-month decline in four years. The market even began to bet on three interest rate cuts in 24 years. According to CME's "Fed Watch", the probability of the Fed's cumulative interest rate cut of 25 basis points by September is 84.6%, and the probability of a cumulative interest rate cut of 50 basis points is 8.1%. As a result, the US stock market fell sharply and did not rebound at all.
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After the good news of the US CPI data, traders chose to withdraw from the recent strong performance of technology giants. The heavyweight stock Nvidia closed down 5.57%, Tesla fell 8.44%, Meta fell more than 4%, Apple, Microsoft, Google and Amazon fell more than 2% respectively. In contrast, the Russell 2000 index, which is dominated by small-cap stocks, closed up more than 3.5%. The market value of the "Big Seven" evaporated by nearly $600 billion in a single day.
