1. The Fed#Powellannounced a 50 basis point rate cut, which was an evasive measure made in advance due to concerns about a market recession. But looking back at the rate cut in 1981, it led to a sharp rise in the third quarter of that year, which truly destroyed the economy. So we need to observe the market reaction of long-term bonds to Powell's return.
2. Continuing with the first point, the steepening of the yield curve after inversion is a signal of #经济衰退 . The recently released economic data has raised concerns about economic recession, such as #ISM the manufacturing PMI is 47.2, indicating that the economy continues to shrink, and the unemployment rate is 4.2%, indicating that the labor market has begun to weaken.
But the market seems to have reduced its fears of a recession, which combined with the current situation may lead to more room for gains before the economy eventually enters a recession.
3. Market expectations for the Fed’s rate cut are as follows
November 7, 2024: 25 basis points rate cut to 4.50-4.75%
December 18, 2024: 50 basis points cut to 4.00-4.25%
January 25, 2025: 25 basis points cut to 3.75-4.00%
March 19, 2025: 25 basis points cut to 3.50-3.75%
May 7, 2025: 25 basis points cut to 3.25-3.50%
4. As of now, the Qing Dynasty#Shenzhen300Index peaked in February 2021 and has since fallen 45%, while the S&P 500 has risen 43.7%. Of course, this is temporary data and does not represent future market trends (Figure 1)
5. According to Bloomberg: U.S. unemployment benefit applications fell to the lowest level since May, indicating that despite the slowdown in hiring, the job market remains healthy. What do you think about this? Please refer to 1-2
6. Through today's data, we can see that the number of people continuing to apply for unemployment benefits has decreased. #美联储 The 50 basis point interest rate cut has begun to take effect. The number of people continuing to apply for unemployment benefits in the United States has slowed down, and it has been announced that most of the unemployed people are caused by immigrants rather than the original employed people.
7. According to Bloomberg: The professional class in the Qing Dynasty is taking a pay cut. These people bear the mortgage and children's tuition fees. Original title: The crisis has caused millions of China's highest-income workers (translation)
8. A debt crisis is unfolding. The U.S. budget deficit reached $380 billion in August, an increase of 66% from August 2023, or $12 billion per day. This is the largest deficit to date (Figure 2)
9. Let’s talk about Ethereum #EFT . As of the end of August this year, the total holdings of all $ETH ETFs were 2,862,403 ETH, worth about $7.2 billion, indicating that institutions have a strong interest in #以太坊 ETFs (Figure 3)
10. Some analysts say that Bitcoin $BTC may rise to 74K in the next few weeks. What do you think about this? Although institutions no longer have positive factors for shorting Bitcoin, I think it still needs a huge driving factor such as truly reducing concerns about economic recession and introducing huge liquidity.
11. Let’s talk about liquidity. From 2019 to now, the global money supply#M2has increased by more than 20 trillion US dollars. With the interest rate cuts in the United States, Hong Kong, and China, liquidity is still growing. Of course, the price of Bitcoin has always been positively correlated with M2, which will be discussed later (Figure 4)
