SignalPlus Macro Research Report (20230824): The US macro economy is still strong, and the SPX index breaks through the downward channel

Yesterday, friendly U.S. economic data boosted risk markets, with U.S. stocks rising more than 1% and the 10-year U.S. bond yield falling sharply by more than 13 basis points.. U.S. new home sales rebounded by 4.4% in July, significantly higher than market expectations.Due to insufficient supply of second-hand housing, both new and second-hand housing prices have been under significant upward pressure., the median sales price also rebounded 4.8% this month; on the other hand,SP PMI data weakened, manufacturing PMI returned to contraction zone(47 vs. 49 expected), new orders fell for the fourth consecutive month, the employment index was at the lowest level since January, and the service PMI also fell to the lowest level since October last year, barely remaining in the expansion zone.

The softer US data coincided with weaker PMIs in Europe (47 vs 48.5), Germany (44.7 vs 48.5) and the UK (47.9 vs 50.4),The UKs Composite PMI hit a 31-month low, with SP commenting that it was an inevitable contraction due to a severe decline in manufacturing and a further weakening of the spring recovery in the services sector.。

Amid extremely crowded bond short positions, weak global economic data was enough to put aside the view that interest rates are heading higher in the long term., the 2/10s curve was flattened by about 6 basis points, and the overall curve fell by about 10-13 basis points; on the other hand, the U.S. Bureau of Labor Statistics (BLS) employment data was only revised downward by 306,000, lower than the expected 500,000. The job market still looks strong, causing the bond markets rally to temporarily pause, but the short squeeze eventually continued until the end of the 20-year U.S. Treasury auction;Technical indicators suggest bond prices could rise further back to early August levels, and Powells talk at Jackson-Hole may be a trigger.

After weeks of selling pressure,Stocks are clearly happy to see risk appetite moving, the SP 500 rose more than 1% led by technology stocks and real estate stocks. Technology stocks rose before Nvidias earnings report.Nvidia earnings beat even the most optimistic forecasts, leading the index to continue to rise by 0.8% after the bell.

Nvidias results were well above market expectations, mainly due toThe data center business performed exceptionally well, and management remains optimistic about the outlook for AI-led chip demand, driving the stock price up 7% after hours. The stock has joined the ranks of Apple and Amazon and has become one of the most important indicator stocks in the entire SPX index.

Technically speaking,The SPX appears to have successfully broken out of its downtrend channel in August, may rise further as bonds rise; the market focus will then focus on Chairman Powells speech tomorrow morning, especially whether he will show a strong attitude in raising terminal interest rates.

You can search for SignalPlus in the Plugin Store of ChatGPT 4.0 to get real-time encryption information. If you want to receive our updates immediately, please follow our Twitter account @SignalPlus_Web 3, or join our WeChat group (add assistant WeChat: chillywzq), Telegram group and Discord community to communicate and interact with more friends.

SignalPlus Official Website：https://www.signalplus.com