SignalPlus Macro Research Report (20230821): The market will enter a long-term sideways consolidation phase
Broad risk aversion briefly paused on Friday, U.S. bond yields fell slightly, while U.S. stocks finally closed flat after falling in early trading.Crisis in China eased temporarily after massive liquidity injection by PBOC (about 760 billion RMB last week) and exchange rate stabilization, while position squeezes in USD/JPY and UK Treasuries (-7 basis points) helped keep US yields in check on Friday, in addition to a very thin market on Friday (trading volume was about normal 70%).
Fast Money has been adding to fixed-income short positions, according to Citi research.Especially concentrated in long-term short positions, reaching the 99th percentile levelThe yield curve has been unilaterally bearish-steepening since its lows in early July, dragging risk markets into a sell-off even as economic data beat expectations, again showing thatEquities are more sensitive to perceived changes in liquidity than economic forecasts.
Risk-off sentiment will remain overshadowed by the start of the new week, especially the Chinese economy will continue to face structural challenges, and the market is gradually recognizing the view that interest rates will rise for a long time in the future; the US economic data this week will be mainly secondary data, including SP manufacturing PMI, durable goods orders and new home sales China is expected to further cut the one-year and five-year loan prime rate (LPR), although it may not help the deteriorating market sentiment.Market focus this week will be on Fridays Jackson Hole annual meeting, Chairman Powell will speak against the backdrop of rapidly deteriorating risks since the FOMC in July, but the performance of US data was much better than expected,The theme of this years conference is Structural Changes in the World Economy, The market will also pay attention to whether the conversation will mention changes in the neutral interest rate and the level of future terminal interest rates.
The sharp decline in the stock market this month has led toThe put/call ratio on the SPX jumped to its highest level since the SVB crisis, however, systemic equity exposure remains elevated due to a prolonged period of subdued realized volatility since March and a mostly bullish market this yearTherefore, even if there is a short-term relief rebound at the beginning of this week, risk sentiment is expected to remain highly vigilant; in addition, at a critical moment when the AI boom seems to have weakened significantly, market investors are highly optimistic about Nvidias earnings report on Wednesday. expect.
In terms of cryptocurrencies, prices stalled again after last Fridays small flash crash, and it remains unclear whether SpaceXs $373 million writedown in BTC was a mark-to-market accounting adjustment or an actual sale, but either way,This year could be an incredibly frustrating one for many BTC traders, with prices prone to large gaps followed by endless sideways trading, the market lacks a stable and operable trend, which makes it difficult for both trend trading and intraday trading to make easy profits, and sudden price changes may also have a negative impact on the profits and losses of ordinary traders. Due to the current extremely unstable risk sentiment, we have no A particularly strong view that prices are likely to follow the path of real yields over the next month or so.
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