US Election | Trump Deal
Trump Trading a “Revolver” | Investment Opportunities for Rising Debt
A rise in U.S. stock market inflation, coupled with a series of strong economic data, led to a surge in 10-year U.S. Treasury yields to nearly 4.8 percent.
Recent $U.S. 10-Year Treasury Notes Yield(US10Y.BD)$ (An indicator of risk-free interest rates in financial markets) will push the sound of closer to 5cm, causing stock market volatility.
Looking at the U.S. economic data for the past five weeks, however, the increase in the average hourly labor year in the United States decreased ahead of schedule, the monthly wage growth rate fell in line with market expectations, and the loss rate increased and the addition of non-farm jobs was expected. Looking back on Futubull, the strong ISM services industry data and the number of first-time applicants losing the bailout at a low level is not likely to be the main reason for the increase in debt. The US one-year circulation rate, published last week, is expected to rise more than 3.3%, the highest level seen in six months. The trend of disinflation is likely to end with a strong US economic performance and Trump's policies following the strong US economic performance and Trump's policies, which are the main reasons for inflation in 2025.
$S&P 500 Index(.SPX.US)$ 、 $Nasdaq Composite Index(.IXIC.US)$ und $Dow Jones Industrial Average(.DJI.US)$ Weakness has remained since the Fed's meeting on 18 December, $Russell 2000 Index(.RUT.US)$ It further evaporated the gains accumulated after Trump's election victory. Investors are generally concerned about the expected rise in inflation. However, this market adjustment can also be seen as an opportunity to buy low for investors. This article will delve into the investment opportunities that may arise in the current economic environment and provide some key indicators and strategic advice for investors.
Potential Opportunities for the Bond Market in Trump Trading
The market's concerns about inflation stem mainly from the Trump administration's economic policies. However, if the enforceability of these policies is as variable as expected, any expectations fall short and interest rates are likely to fall as expected. In this case, like $iShares 20+ Year Treasury Bond ETF(TLT.US)$ Such a long-term Treasury ETF could once again become a short-line speculation opportunity. For example, Citibank Wealth Management recently pointed out that when the yield on the 10-year Treasury note is 5 percent, it will provide an opportunity to absorb.
Tech Stocks: Safe Haven for Strong Cash Flow
Companies with strong cash flow tend to be better able to cope with market fluctuations in the past in an environment of rising interest rates. Large tech stocks, especially this year's focus is BATMMAAN ( $Broadcom(AVGO.US)$ 、 $Apple(AAPL.US)$ 、 $Tesla(TSLA.US)$ 、 $Microsoft(MSFT.US)$ 、 $Meta Platforms(META.US)$ 、 $Amazon(AMZN.US)$ 、 $Alphabet-C(GOOG.US)$ ， $NVIDIA(NVDA.US)$ ) companies, which usually have a solid financial situation and strong cash generation capabilities. These companies are less likely to be seriously affected by rising market interest rates in the long term, and recent market adjustments may provide buying opportunities, given the experience of rate expectations in 2022. Investors can consider gradually building positions as these stocks experience a pullback, but keep a mid-line investment mindset.
Economic Data: Key Indicators and Opportunities
The United States has a highly transparent supply of economic data that provides investors with a strong basis for decisions. AS LONG AS THE ECONOMY DOES NOT EVOLVE INTO STAGNATION (HIGH INFLATION ACCOMPANIED BY LOW GROWTH), CURRENT MARKET ADJUSTMENTS ARE LIKELY TO BE AN OPPORTUNITY TO ATTRACT QUALITY ASSETS. Investors can focus on the following key economic indicators:
Non-farm employment data: important indicators reflecting the health of the employment market.
Number of people applying for unemployment relief for the first time: provides real-time, weekly data on the dynamics of the employment market.
CPI (Consumer Price Index) and PCE (Personal Consumption Expenditure): Important indicators that measure the level of inflation.
。 >>Click to learn about Futubull membersChanges in the Debt Curve
It is worth noting that while debt yields have risen, there has been no reversal of the yield curve at this time. The yield curve inversion is often seen as a warning signal of an economic downturn (e.g. previous 2-year debt > 10-year debt). Therefore, the current stage of asserting that the economy will come into a hard landing may be premature. Investors should pay more attention to changes in the overall shape of the debt curve, rather than simply watching debt rise. In short, as long as it does not evolve into a cycle of rate increases, the current situation does not cause significant problems for the time being.
On the other hand, from the perspective of interest rate futures, the forward forecast leads to a further tapering of the space. Although the additional futures are not floating, there is little chance of a bond issue emerging in the short term. The returns of some short-term bonds will become more stable as the gap in interest rate changes, such as Futu Cash
。
Investment Opportunities in the Trump Deal
The aforementioned technology stocks and bond investments will be biased towards mid-line deployments, but you can also keep an eye out for some lucrative market hotspots in the short term
Defensive shares
In an environment of rising interest rates and increased economic uncertainty, some of the more defensive sectors may perform well, such as consumer staples stocks $Walmart(WMT.US)$
In terms of technical trends, it is possible to watch whether 10 antennas and 20 antennas will emit golden cross signals in the short term as a buying opportunity
, the arrangement of the moving averages after issuance is expected to return to the favorable pattern of the Multi-Head Arrangement.
Financial stocks
In times of rising debt, financial companies can often benefit from widening the net spread, especially now that the debt curve has returned to normal, with a higher than short-term debt ratio, and it is beneficial for banks to return to the operating pattern of buying long debt. The bank's results on January 15 next week will be under scrutiny. $JPMorgan(JPM.US)$ 、 $Citigroup(C.US)$ 、 $Goldman Sachs(GS.US)$ Results will be published.
In terms of technical analysis, the stock price is in a symmetrical triangle pattern, and it is very likely that there will be a breakthrough after the results. From the trading point of view of technical analysis, post-break trading is a more rational operation.
Author Information
Tam Chi Lok
Chief Analyst of Futu Securities
The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the proposed issuer of shares mentioned above.
CE No.CentralCode: AVJ390
