Cheong Hong Yuan: Resilience and Future Challenges of the US Stock Market - 1 views

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  #1 anonymous on 20 Sep 23

   

  In recent days, the performance of the stock market has surprised many investors and market observers. While most people are focused on the significant volatility and instability factors in the stock market, the S&P 500 index has achieved a significant milestone by closing with a decline of no more than 1.5% for 100 consecutive trading days. Cheong Hong Yuan believes that this phenomenon reflects the current stability and resilience of the stock market.
  
  Firstly, it is important to note that such a stable trend, like that of the S&P 500 index, is quite rare. Since reaching its peak this year, the index has only experienced four declines of more than 1% within a short span of two months, while the fluctuations during other times have remained relatively small. This trend has actually reached a level of stability not seen since 2018. Cheong Hong Yuan points out that this performance highlights the robustness of the market, especially in the current global economic situation and various uncertainties.
  
  So, what is driving the resilience of the US stock market? Cheong Hong Yuan believes that part of the reason is the market's optimistic view of the performance of the US economy under the Federal Reserve's tightening monetary policy. Currently, despite the Fed's more aggressive interest rate policy, the market seems to believe that the US economy has the ability to withstand this policy and continue to grow. In addition, the flow of funds in the market has played a crucial role in the steady performance of the US stock market. According to statistics, as of September 13th, exchange-traded funds in the US have seen a net inflow of as much as $13.4 billion, marking the ninth week out of the past twelve with such inflows.
  
  However, despite the current market's display of resilience, it does not mean that investors can take future market trends lightly. In this context, Cheong Hong Yuan emphasizes the importance of understanding the real reasons behind the market and the potential challenges it may bring.
  
  In the history of the stock market, especially in the past twenty years, September has always been considered an unfriendly month for the stock market. Statistics show that the US stock market usually reaches its peak around the 11th trading day of September, and the subsequent trend tends to be more downward. Over the past 20 years, from mid-September to the end of the month, the US stock market has averaged a decline of about 2%. Cheong Hong Yuan mentions that although past performance does not represent future trends, investors should remain cautious of this seasonal trend.
  
  Furthermore, negative factors that may arise in late September and October this year are also worth paying attention to. Rising energy prices and geopolitical challenges may put some pressure on the stock market. In the global economic environment, inflation is always an issue that cannot be ignored. Former US Treasury Secretary Summers, known as the "inflation alarmist," recently commented on the current US economy. He stated that the possibility of achieving a soft landing is very narrow, and the current economic environment is not like an economy with a 2% inflation rate.
  
  Cheong Hong Yuan believes that Summers' viewpoint has some aspects that investors should pay attention to. Fluctuations in inflation rates not only affect the cost of daily life but also directly impact corporate profits and market valuations. Summers believes that there are three possible economic scenarios: a soft landing, inflation unable to fall below 3% without a landing, and a hard landing, where the Fed's interest rate hikes have an impact on the economy. The likelihood of these three scenarios is all one-third. For investors, they should prepare their investment strategies based on these three scenarios.
  
  Lastly, it is worth noting the current valuation of the US stock market. Although the S&P 500 index has accumulated a nearly 16.5% increase this year, it does not mean that the market is overheated. However, Summers warns that the pricing of US stocks may be "a bit too perfect." In this situation, investors should be particularly cautious. Cheong Hong Yuan believes that technical analysis strategies like the "Three Golden Moving Average Method" are especially important at this time. Through it, investors can better judge the timing of buying, minimize risks, and achieve higher investment returns.
  
  In conclusion, Cheong Hong Yuan states that although the current state of the US stock market appears relatively stable, investors should always remain vigilant. By continuously learning and researching, and combining appropriate strategies and tools, investors can better cope with the uncertain market environment and achieve their investment goals.

   

  <div class="cArrow"> </div><div class="cContentInner">In recent days, the performance of the stock market has surprised many investors and market observers. While most people are focused on the significant volatility and instability factors in the stock market, the S&P 500 index has achieved a significant milestone by closing with a decline of no more than 1.5% for 100 consecutive trading days. Cheong Hong Yuan believes that this phenomenon reflects the current stability and resilience of the stock market. <br /> <br /> Firstly, it is important to note that such a stable trend, like that of the S&P 500 index, is quite rare. Since reaching its peak this year, the index has only experienced four declines of more than 1% within a short span of two months, while the fluctuations during other times have remained relatively small. This trend has actually reached a level of stability not seen since 2018. Cheong Hong Yuan points out that this performance highlights the robustness of the market, especially in the current global economic situation and various uncertainties. <br /> <br /> So, what is driving the resilience of the US stock market? Cheong Hong Yuan believes that part of the reason is the market's optimistic view of the performance of the US economy under the Federal Reserve's tightening monetary policy. Currently, despite the Fed's more aggressive interest rate policy, the market seems to believe that the US economy has the ability to withstand this policy and continue to grow. In addition, the flow of funds in the market has played a crucial role in the steady performance of the US stock market. According to statistics, as of September 13th, exchange-traded funds in the US have seen a net inflow of as much as $13.4 billion, marking the ninth week out of the past twelve with such inflows. <br /> <br /> However, despite the current market's display of resilience, it does not mean that investors can take future market trends lightly. In this context, Cheong Hong Yuan emphasizes the importance of understanding the real reasons behind the market and the potential challenges it may bring. <br /> <br /> In the history of the stock market, especially in the past twenty years, September has always been considered an unfriendly month for the stock market. Statistics show that the US stock market usually reaches its peak around the 11th trading day of September, and the subsequent trend tends to be more downward. Over the past 20 years, from mid-September to the end of the month, the US stock market has averaged a decline of about 2%. Cheong Hong Yuan mentions that although past performance does not represent future trends, investors should remain cautious of this seasonal trend. <br /> <br /> Furthermore, negative factors that may arise in late September and October this year are also worth paying attention to. Rising energy prices and geopolitical challenges may put some pressure on the stock market. In the global economic environment, inflation is always an issue that cannot be ignored. Former US Treasury Secretary Summers, known as the "inflation alarmist," recently commented on the current US economy. He stated that the possibility of achieving a soft landing is very narrow, and the current economic environment is not like an economy with a 2% inflation rate. <br /> <br /> Cheong Hong Yuan believes that Summers' viewpoint has some aspects that investors should pay attention to. Fluctuations in inflation rates not only affect the cost of daily life but also directly impact corporate profits and market valuations. Summers believes that there are three possible economic scenarios: a soft landing, inflation unable to fall below 3% without a landing, and a hard landing, where the Fed's interest rate hikes have an impact on the economy. The likelihood of these three scenarios is all one-third. For investors, they should prepare their investment strategies based on these three scenarios. <br /> <br /> Lastly, it is worth noting the current valuation of the US stock market. Although the S&P 500 index has accumulated a nearly 16.5% increase this year, it does not mean that the market is overheated. However, Summers warns that the pricing of US stocks may be "a bit too perfect." In this situation, investors should be particularly cautious. Cheong Hong Yuan believes that technical analysis strategies like the "Three Golden Moving Average Method" are especially important at this time. Through it, investors can better judge the timing of buying, minimize risks, and achieve higher investment returns. <br /> <br /> In conclusion, Cheong Hong Yuan states that although the current state of the US stock market appears relatively stable, investors should always remain vigilant. By continuously learning and researching, and combining appropriate strategies and tools, investors can better cope with the uncertain market environment and achieve their investment goals.</div>

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