HOW SHOULD INVESTORS DEPLOY US EQUITIES ON THE DIVERSIFICATION PATH?
The author originally intended to issue a review and outlook for the first half of US stocks today
However, with the trading performance of US stocks after the CPI announcement yesterday, I believe that people are more concerned about the performance of the US stocks in the short term post market than in the entire mid-term post market, and it seems that we will continue to lag behind the relevant outlook articles
First, let's take a look at the latest developments that U.S. stocks will face.
ON THE CPI DATA RELEASED YESTERDAY, THERE ARE CLEAR SIGNS OF US INFLATION PRESSURES SLOWING, LEADING MARKETS TO FURTHER BELIEVE THAT A FURTHER CYCLE OF RATE CUTS IS COMING. FROM THE CME'S FEDWATCH, THE ODDS OF A SEPTEMBER RATE CUT HAVE RISEN TO ABOVE 98%, ALMOST WITHOUT A DOUBT, LEADING TO LAST NIGHT'S US DEBT Interest Rate Declines, Related Longitudinal Debts $iShares 20+ Year Treasury Bond ETF(TLT.US)$und $Direxion Daily 20+ Year Treasury Bull 3X Shares ETF(TMF.US)$Has a good performance.
However, US stocks outperformed the spread. Track Small Stocks $Russell 2000 Index(.RUT.US)$The index rose sharply, but $Nasdaq Composite Index(.IXIC.US)$und $S&P 500 Index(.SPX.US)$There have been more marked adjustments in recent months under the drag of weighted stocks, $NVIDIA(NVDA.US)$und $Tesla(TSLA.US)$ $Costco(COST.US)$Large shadow candles appear on the solar chart.
After a talk in physical stores last night, there were also bulls who asked about the impact on the US stock market after the CPI was released.
The author replied at the time: “Not the focus, the market is now more concerned about the hype about the stock, such as the different types of concepts, like the announcement of the IPO last night $MicroStrategy(MSTR.US)$“The market is more concerned about these individual messages.” The authors did not accurately determine the occurrence of a weighted stock recall, but the performance of the market was not surprising. Here are the author's current insights into the market situation:
The path of interest rate decline is already very clear, and the market is not yet worried about a hard landing in the economy
Many investors are looking at yesterday's CPI data, or the non-farm employment data from earlier this month. In fact, writers have not focused on economic data recently, mainly because market expectations are already very clear, namely the belief that the trend of falling interest rates will take place in a gradual manner, as can be seen from last month's economic data, which was on May 31.PCE coming and inflationary pressures coming back? Are interest rate expectations coming back again? ” and June 7th”Non-farming or showing a slowing economy? Interest rate reduction period means what day to expect? ” It is also mentioned that the author isLecture on June 11Mention the relevant direction. I believe that the vast majority of investors in the market are also aware of this, so the CPI data released are mostly reflected in the debt market (only because the debt market has recently been buoyed by election factors).
For now, the market is more concerned about whether the economy will face further downward pressure in the two months if rate cuts do not begin until September 18. So when observing economic data to judge stock market movements, some economic data such as retail sales, durable goods orders, consumer confidence data, and personal spending become more influential.
Reasons behind small and medium-sized stocks
If you look closely, before yesterday's U.S. stock trades, some of the most popular sectors or star stocks were lagging behind, such as Tesla, $Intel(INTC.US)$、 $Advanced Micro Devices(AMD.US)$und $Super Micro Computer(SMCI.US)$Etc., the above stocks tend to fluctuate or become hyper due to different news (especially Tesla, the more real news in the last month, the short line pressure may be greater
). But small and medium-sized stocks are different in concept, these small and medium-sized stocks have been lagging behind the big markets this year, and in their actual operations, these SMEs have been plagued by high interest rate factors, while yesterday's debt downgrade news led to the transfer of funds to stir up the associated SME stocks believe to be the main source Cause.
In the case of heavyweight stocks, such as NVDA, $Apple(AAPL.US)$ $Microsoft(MSFT.US)$ $Meta Platforms(META.US)$For example, this year points to the strength of the Qi Xiao, in addition to benefiting from the AI craze, the companies have one thing in common: they have super-strong free cash flow, so the impact on the yield gap itself is relatively large in the tech industry (and even some analysts believe there is no impact, so repurchases can be continued). As a result, these stocks are unlikely to benefit from falling yields in the short term.
Should I be chasing the wind now?
Some cattle lovers who are not familiar with the above may consider following the wind blindly, which is possible at the level of technical analysis. On the daily chart, the Russell 2000 index shows a head and shoulders pattern. For another perspective, you can refer to the Russell Index 2000 ETF $iShares Russell 2000 ETF(IWM.US)$, Futubull's automated line layout features a slightly elevated triangle shape. Depending on the technical trends, some shortline departments recommend that this type of stock can be scaled, preferably the EFT format (small equity risk is high, the indicator can spread the risk).
Keep in mind, however, that the above technical analysis is better for medium-short line deployments using daily charts, and this type of trailing behavior is more suitable for investors with a strong sense of the market. If you turn to slower investors, it is not very suitable.
In the long run, there will be significant room for those who follow suit. After all, it is clear that the investment trajectory of US stocks has always been “technology” -driven, and technology has driven economic growth as a whole has been the investment logic for almost a decade. The technology industry's heavy R&D (R&D) spending makes it difficult for SMEs to catch up. So in practical terms, writers have not been too keen on the hype of Intel, Russell 2000 stocks or concepts. Maybe that's the difference between a trader and an analyst.
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How should Star Shares be deployed?
Many star stocks have seen more marked adjustments in recent days, with a lot of exaggerated gains accumulated since the beginning of the year so far, and the risk of short lines is still high. THE AUTHOR SUGGESTS THAT THE BEST STRATEGY FOR HOLDERS IS TO HEDGE RISK WITH COVERCALL'S OPTIONS STRATEGY. After all, US stocks are entering the earnings period, and many stocks have risen to an extreme level, and the strategy of selling options to hedge the risks of stocks is a good option.
For investors looking to adjust their shipments in the near term, they can also consider deploying them in the form of sell and sell options (remember to have a sufficient amount of money ready to pick up), where there is no obvious support.
Overall, the authors believe that the direction of AI investment in this year has not changed much, and the risks of short-line capital movements are currently facing. Or take a simpler way to think, across the entire AI different domain racetracks, the highest bubble risk right now is on AI cybersecurity (related concepts are often hundreds or thousands of times PE or unprofitable), but look at last night $CrowdStrike(CRWD.US)$Performance, while the technical trend is poor, there have been no crashes so far (and the year-to-date increase is more modest
). So if investors who are not confident in AI investing, they can take a direct look at the performance of the relevant concept stocks to give themselves a signal and judgment for reference.
Monthly U.S. stocks are another option
FINALLY, IF INVESTORS ARE BOTHERED BY THE ABOVE STRATEGIES OR FIND IT DIFFICULT TO DIGEST THE CURRENT MESSAGING, IT MAY BE A GOOD INVESTMENT OPTION FOR MONTH-TO-MONTH LONG LINE INVESTMENT. In particular, some ETFs that track major indices, such as $SPDR S&P 500 ETF(SPY.US)$、 $Vanguard S&P 500 ETF(VOO.US)$und $Invesco QQQ Trust(QQQ.US)$, or popular investment topics such as Semiconductor ETFs $iShares Semiconductor ETF(SOXX.US)$etc. Details can be found in this Futubull Classroom【Futubull Operating Group wants to buy a hot stock, what time is it? This method can be boarded immediately for $10“。
Chief Analyst of Futu Securities Liang
(The author is a license holder of the Securities Regulatory Commission, and its contacts do not have financial interests in the issuer of the proposed shares mentioned above)
