(1/2 ) The year of transition is turbulent, and a technical rebound is about to begin!
One day of big rise and one day of big fall, the year of transition is turbulent, and the market is heartbroken and doesn't know whether to cry or laugh.
The upcoming interest rate cut brings a one-day trip of big rise ecstasy, and it may be too late to cut interest rates one day later, which has become the mainstream view.
ISM data below the boom-bust line is lower than expected + the number of initial jobless claims hit a new high + the weekly report of large factories exploded, and the economic recession concerns followed the big drop for one day.
The currency market followed the decline but remained strong, temporarily holding the 30-day moving average, and the technical rebound of the big cake is about to begin.
1. Fundamentals: From "non-recessionary interest rate cuts" to "recessionary interest rate cuts", from "bad data = good market" to "bad data = bad market"
1. On Wednesday this week, the Federal Reserve announced the resolution of the interest rate meeting, keeping the interest rate unchanged, which was in line with market expectations. Powell affirmed the possibility of a September interest rate cut at the press conference, saying that the committee's overall view is that the economy is approaching a level suitable for interest rate cuts.
U.S. stocks opened higher and went higher in response, with the three major indexes rising collectively, and both the S&P and Nasdaq hitting their best single-day performance since February.
2. After a big one-day trip on Wednesday, U.S. stocks turned 180 on Thursday, ushering in a massive sell-off on Wall Street. The Dow Jones and S&P both fell more than 1%, and the Nasdaq fell more than 2%, almost giving up Wednesday's gains.
On Wednesday, everyone was delighted by the Fed's upcoming easing shift.
On Thursday, a series of bad data showed that the U.S. economy may be about to enter a recession, complaining that Powell and others were "old and slow" and that the interest rate cut might be a "recession-type interest rate cut."
3. Poor economic data led to concerns about a U.S. recession
The U.S. Institute for Supply Management (ISM) manufacturing index continued to decline below the boom-bust line, below expectations, hitting its lowest level since November 2023 (close to the lowest level after the epidemic lockdown), indicating that manufacturing activity was shrinking and weaker than all economists surveyed expected.
The number of first-time unemployment claims in the United States jumped to its highest level in nearly a year on Thursday, further proving that the labor market is slowing down.
