Zhitong Finance APP learned that US stocks achieved a strong rebound last week, and the US stock benchmark index - S&P 500 index (SPY.US) rose nearly 4% last week, and even Nasdaq 100 index (QQQ.US), which is mainly technology stock , also rose 2.1%. In addition, the Dow Jones Index (DIA.US), which represents large-cap stocks, rose 5.7%, and the small-cap stocks, also achieved a sharp rebound, and the Russell 2000 Index (IWM.US), which represents many small-cap stocks, rose about 6%. The benchmark index has rebounded more than 9% since the S&P 500 hit a nearly two-year low of 3491 on October 13.
Although the performance of some large technology stocks such as Meta (META.US) disappointed investors, the U.S. stock market rebounded strongly last week, mainly because the performance of the S&P 500's weighted stock Apple (AAPL.US) boosted market confidence, and the market's expectations that the Federal Reserve's monetary policy has shifted from radical to moderate began to heat up. At present, the market's bet on the 250 basis points of the Fed's interest rate hike in December has exceeded 75 basis points.
However, Matt Fleury from Goldman Sachs' stock business wrote in a report: "At the beginning of a new bull market, most of the weight stocks in the benchmark index often do not fall sharply as in recent weeks." "And this is still the case when the U.S. nominal GDP is growing, so what will the stock market look like in a recession? Will it be more pessimistic?"
Since the Federal Reserve's "money mouthpiece" - Nick Timiraos from " Wall Street Journal " reported that the Federal Reserve may revisit future interest rate hikes at the meeting, Goldman Sachs said the market has seen the possibility of 5D indicators being loose again in the financial environment this century.
focuses on the speech delivered by Federal Reserve Chairman Powell this week
This week Whether US stocks will continue to rise depends largely on the attitude of the Federal Reserve - but it is not a "confirm" event of 75 basis points interest rate hikes, but the remarks made by Federal Reserve Chairman Powell on the prospects of monetary policy.
Matt Fleury said: "With officials making comments on the market, and with the European Central Bank , the Bank of Japan's interest rate resolutions and corporate performances being announced one after another, the volatility market showed a simple event risk premium , the stock market volatility curve has dropped significantly this week."
He emphasized: "Now, the focus is firmly shifted to Fed Chairman Powell. Is the Fed satisfied with this loose financial environment expectation? This is the only question you need to ask yourself." At the same time, Matt Fleury pointed out that the market's fundamental is not good.
He said: "What I'm most eye-opening in this week's tech company financial report is probably the year-on-year change in the quarterly operating margins of the financial report: Apple fell 0.9% year-on-year, Amazon (AMZN.US) fell 2.4%, Google parent company Alphabet (GOOGL.US) fell 7.5%, Meta fell 14.0%, Microsoft (MSFT.US) fell 1.7%. "
technology rebound trend has not stopped yet
"My benchmark expectation is that companies with slower growth will have lower price-to-earnings ratios. "This has always been a feature of this round of bear market, and I expect this time is no exception. However, technology stocks such as Microsoft did not fall out of favor this week." In response, Fleury said that although the fundamentals are poor, the technology still has an advantage.
"Recent trends are the technology that have the upper hand. Some buyers are forced to buy due to pressure from trading volume, but the fundamentals are still likely to worsen." "When Nick Timiraos tweeted that the Fed may be stepping on the brakes, I may avoid betting on this trend. I'm waiting to see if Powell agrees with this relaxation of the financial environment."
"If Powell 'released' this week and did not show the strong attitude of the Jackson Hall meeting, from a technical perspective, there is almost nothing to stop this rebound - moving objects continue to remain in motion. But if Powell expresses his support for maintaining hawkish monetary policy, it would be an excellent opportunity to short ."
