Global stock markets enter panic plunge mode
In early August, the Bank of Japan and the Federal Reserve successively announced monetary policy decisions, among which the Bank of Japan announced a 25 basis point interest rate hike, while the Federal Reserve announced that the benchmark interest rate would remain unchanged, but clearly released a signal of a high probability of interest rate cuts in September.
The market was moved by the news, and the yen-dollar exchange rate soared sharply, and the "carry trade" of borrowing cheap yen to enter the high-yield market came to an end. The positive boost to the U.S. stock market from the Fed's clear interest rate cut signal only lasted for one day. In the trading days in early August, Japanese, European and U.S. stocks experienced a comprehensive decline.
The greater concern comes from the negative signals of the fundamentals of the U.S. economy. The ISM manufacturing index reflecting factory activity was lower than expected, the number of first-time unemployment claims hit a new high since August 2023, and the U.S. non-farm payrolls data in July showed that the unemployment rate rose further. For a time, panic about the impending recession of the U.S. economy swept the market.