Zhitong Finance APP learned that Guosen Securities released a research report saying that the judgment of individual inflation and employment data in the United States being higher than the market will not directly lead to a June rate hike. However, if the CPI continues to be higher than the market’s judgment, the probability of raising interest rates in June will increase significantly. US stocks can be bullish after confirming the breakthrough of the pressure level.
The Federal Reserve’s May FOMC meeting raised interest rates by 25bp, and changed its attitude towards potential future interest rate hikes to neutral
On May 3, the Federal Reserve held the FOMC meeting in May and announced a 25bp rate hike, which was in line with the market’s previous judgment.
After the meeting, Federal Reserve Chairman Powell issued a statement. Compared with the FOMC meeting statement in March (the expression at the time was: no longer stated that interest rates should continue to be raised, but monetary policy may need to be consolidated), this statement’s attitude towards future interest rate hikes has further shifted to neutral. Regarding the future direction of the Fed’s monetary policy, Powell said: “The committee’s judgment on whether to further consolidate monetary policy will depend on the data.” At the same time, Powell reiterated: “When formulating monetary policy, the Committee will consider the extent of the accumulated interest rate hikes and the hysteresis of monetary policy.”
The next interest rate meeting will be on June 23. During this period, the market will experience 2 releases of CPI data, 2 releases of non-agricultural employment data, and 1 release of PCE data. Combined with Powell’s mention that the lag of monetary policy will be considered, we believe that individual inflation and employment data are higher than the market’s judgment and will not directly lead to a rate hike in June. However, if the CPI continues to be higher than the market’s judgment, the probability of raising interest rates in June will increase significantly.
U.S. Unemployment Falls in April, Nonfarm Payrolls Stronger
On May 5, the U.S. Department of Labor released U.S. employment data for April. The data showed that the U.S. unemployment rate was 3.4% in April, down 0.1ppt from March, and the consensus was 3.6%, up 0.1ppt from March. This is the directional deviation between the actual value of the U.S. unemployment rate and the consensus value after January. In addition, the number of new non-agricultural employment in the United States in April was 253,000, which was a significant rebound from the previous value of 165,000, and was also significantly higher than the market consensus of 180,000. The US labor force participation rate was 62.6% in April, unchanged from the previous value and higher than the consensus of 62.5%.
Overall, the U.S. job market is relatively strong in all aspects, so it may be difficult for us to see a weakening of U.S. consumer demand in the short term.
U.S. stock market: The monetary policy game will fade out, and the fundamentals will gradually improve, but short-term advice is to observe
After the FOMC meeting and the release of strong non-agricultural employment data, the U.S. dollar index fell slightly, and is currently in a low-level and small shock stage; the 10-year U.S. bond yield fluctuates greatly but still maintains a random walk within the current shock range. The trend of the above two assets shows that the current market is in a stage that is relatively insensitive to monetary policy events. The main reason is that the interest rate hike has come to an end, and it is too early to cut interest rates.
In terms of stocks, the trend of U.S. stocks during the FOMC meeting on Wednesday is generally not related to monetary policy; after the employment data was released on Friday, it rose significantly, implementing the logic of “seesaw on stocks and bonds” with fundamentals as the core logic. The strong macroeconomic data has also effectively implemented the consensus on the performance of individual stocks. This week, U.S. stocks have returned to the stage of performance revisions (the number of companies whose performance has been revised upwards is greater than the number of companies whose performance has been revised downwards).
However, from the perspective of technical analysis, the recent rebound of U.S. stocks has repeatedly stopped around the 4160-4180 points of the S&P 500, and around the 13200-13300 points of the Nasdaq 100. After Friday’s rapid rise, the S&P 500 once again Close to the pressure level, the Nasdaq 100 has reached this position. We suggest that you can go long after confirming the breakthrough of the pressure level.