1. Last night, Dow Jones Index fell 2.11% to 29,296.79 points; S&P 500 Index fell 2.80% to 3,639.66 points; Nasdaq Index fell 3.80% to 10,652.41 points, and once fell more than 4% during the session. U.S. stocks plummeted on Friday as traders evaluated their September job reports. The report shows that the unemployment rate continues to decline and triggers a rise in yields.
In fact, US stock has accumulated a lot of growth in the past few years, so as long as there is a turbulence, there will be large fluctuations! The current US stock market is completely following the policy of Fed ! If the Federal Reserve continues to aggressively raise interest rates on , then the US stock market will be in a bottom line in the short term! Some analysts pointed out that the probability of the Federal Reserve hike rate 275 basis points in has reached 92%, which means that it is a foregone conclusion that another aggressive rate hike is! So, for US stocks, if interest rates continue to be raised, liquidity will be affected, and it is quite difficult to rebound significantly!
2. The Federal Reserve's interest rate hike is also unfavorable for global stock markets! The first thing that affects is of course the exchange rate . US dollar index still maintains a higher level, performing quite strongly, while non-US dollar currencies will become weaker. In this way, the move to return the US dollar is relatively large! The impact on the stock market is quite large. If foreign capital in other countries is about to be sold, the liquidity of the stock market has also been significantly affected!
Only when the US dollar index shows signs of weakening will U.S. stocks rebound retaliatedly. It is obvious that the US stock market rebounded sharply on Wednesday because the US dollar weakened, which triggered people's expectations of the Federal Reserve's early interest rate cut! Unexpectedly, the US dollar index has strengthened again in the past few days, and the US stock market has no choice but to fall sharply!
3. For A shares , it is the trend of RMB exchange rate ! It can be seen that the RMB exchange rate rose sharply on Tuesday and Wednesday, resulting in a two-day surge in A50. In the past three days, the RMB exchange rate began to depreciate again and there were signs of weakening again. The A50 also continued to show an adjustment trend. Although the current A-share trend is still relatively independent, in the wave of internationalization, the movement of northbound funds will also affect the trend of A-shares. Northbound funds have basically shown a net outflow during this period, which is affected by exchange rate fluctuations! From a broad perspective, if A-shares want to strengthen, the RMB exchange rate must be stable at a level in order to stabilize northbound funds. Only by net inflow of northbound funds can A-shares rebound be strong!
4. During the A-share market closing, A50 experienced two days of big rise and has basically fallen back. The closing of A50 before the festival was 12,909 points. The closing of A50 last night was 13084 points. That is to say, during the holiday period, the A50 rose by 175 points. The increase is also around 1%. For the weaker A-shares now, the increase is not large! If the U.S. stock futures opens on Monday, the A50 will also fall with the decline! Nowadays, A-shares are also keeping pace with exchange rate fluctuations. Northbound funds basically don’t look at their valuations, and they buy or sell in large quantities as long as there is a fluctuation in the exchange rate. The signs of buying with one click or selling with one click are quite obvious! Therefore, if northbound funds have not flowed back, A-shares may not bottom out in a short period of time!
5. In summary, the sharp drop in US stocks last night was caused by aggressive interest rate hikes. The US dollar index strengthens again, the RMB depreciates, and A-shares may further bottom out in the short term! A-shares will probably open slightly higher after the holiday! After that, you may look for support at around 3,000 points again! However, in history, every time A-shares are below 3,000 points, chances outweigh risks! As long as the market falls below 3,000 points, there is no need to be pessimistic! Maybe the turn will come soon!
