CITIC Securities: The Trading Logic of a "Powell Put"-Driven Rally Will Lead the Next U.S. Stock Market
BlockBeats News, August 24th, CICC Securities research report believes that Powell's speech at the Jackson Hole Symposium was in line with our previous expectations, and it is expected that the Federal Reserve will cut interest rates three times this year, each time by 25bps. On the asset side, we believe that the main theme of the "rate cut trade" in the U.S. stock market will be redefined, and the "catch-up" trading logic will dominate the future U.S. stock market. Similar to the July 2024 "rate cut trade" where rate-sensitive assets such as the Russell 2000, S&P 500 Real Estate, and NASDAQ Biotechnology saw a rise in prices may happen again.
The market's expectation of Fed interest rate cuts this year still differs from our view. We expect U.S. bond yields and the U.S. dollar index to have a slight downward potential. For non-U.S. equities, Powell's dovish remarks and a weaker U.S. dollar are expected to boost global equity market risk appetite. As for gold, the rate cut expectations are favorable for price increases, but caution is needed regarding the potential bearish impact if Russia and Ukraine reach an agreement. (FXStreet)
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