ATFXThe "Great Earthquake" on US stocks,7The optimism of the month has disappeared

Traditional financial logic holds that the Federal Reserve's monetary policy primarily determinesforeign exchangeThe price trend of the stock market is mainly determined by the performance of listed companies. However, the rise and fall of the US stock market in the past year have been entirely determined by the Federal Reserve's monetary policy expectations, and there is a need to reshape financial logic.

8Month, comprehensive in the United StatesCPIfrom8.5%Fallback to8.3%The inflation rate has decreased for two consecutive months. However, the core inflation rate (excluding food and energy) has decreased from6.1%Ascend to6.3%, far exceeding market expectations. The "inflation inflection point theory" went bankrupt, funds betting on the Federal Reserve to temporarily raise interest rates hastily exited, and the overnight US stock market experienced a "major earthquake", causing the Dow Jones to plummet3.94%NASDAQ100The index even fell close6%。 On the same day, US President Biden delivered a speech stating that reducing inflation in the United States requires more time and determination. This exacerbates the market expectation that the "turning point" of high inflation has not yet arrived, posing a stacked negative impact on the stock market.

There is a viewpoint that a continuously rising inflation rate will lead to9month22The Federal Reserve's interest rate decision to raise interest rates100Base point. You know, in yesterday'sCPIBefore the data was released, the market's expectations were9Monthly interest rate hike50Basis points (even temporarily delaying interest rate hikes). Such a huge reversal resulted in the market entities' funds not being prepared, which led to the emergence of the stock market-currencies-Futures market, a situation where the three major markets rise and fall sharply simultaneously.

although8Monthly CoreCPIRising, but the inflation trend remains downward. In March of this year, the core inflation rate was6.5%In June, it fell below6%And maintain it in July.8The month jumps to6.3%Although exceeding expectations, it may only be a brief rebound.9Monthly CoreCPIData is crucial, if not revisited6%Below, high inflation continues. On the contrary, the "inflation inflection point theory" may still become a reality.

The importance of the decline in the overall inflation rate is severely underestimated. According to the inflation report of the Bureau of Labor Statistics,8Month on month decline in fuel oil prices5.9%The third consecutive month on month decline; Overall decline in energy prices10.1%For the second consecutive month of decline. Energy prices remain the main influencing factor for the high overall inflation rate.5Starting from the month, beautycrude oilThe price has shifted from rising to falling, and it has been declining for four consecutive months. The market price has changed from119The US dollar fell to90Below the US dollar.OPECThe latest monthly report mentions that Saudi Arabia8Increased production in the month23.610000 barrels/Day, to110510000 barrels/Day. Neighboring UAE8Increased production in the month5.110000 barrels/The total production capacity has reached31810000 barrels/Day. Decreased demand,OPECBut did not reduce production as verbally stated1010000 barrels/The price of crude oil is expected to further decline on the day. U.S.A9The overall inflation rate for the month is highly likely to further decline.

ATFXThe analyst team's concise view is that the overall inflation rate has decreased, while the core inflation rate has increased. Currently, the market places more emphasis on the latter, resulting in a sharp decline in US stocks and a sharp rise in the US dollar index.

*Risk Tips and Disclaimers*
There are risks in the market and investment should be cautious. The above contents only represent the views of analysts and do not constitute any operational recommendations.
2022-09-14