Black Monday is coming back! Is there a second bottom? Here are 3 selected American ETFs that could be used as hedge instruments.

Is 'Black Monday' coming again?On Monday, August 5th, the dollar-yen surged to the 141 yen level, causing a sharp decline in Japanese stocks.日経平均株価の下げ幅はブラックマンデーを超えた（下落率は12.4％）。米リセッション懸念が強まっているなか、想定より急速に進んだ円高がリスクオフにつながった。円キャリートレードの巻き戻しに伴う株式の強制売買やリバランスも下げ幅を助長したと指摘されている。5日はアジアや米国の主要株価指数がそろって急落し、Global Stock Market SelloffIt happened.

On the following day, the USD/JPY saw a reversal and was sold back to the 145 yen level. The improvement in the US ISM non-manufacturing index exceeded expectations, leading to dollar buying and yen selling. In response, the Nikkei Stock Average rose by 10.2% on the 6th.10.2% increase. Major stock market indices in Asia and US stock market index futures also rebounded.

Temporary relief from the recovery on the 6th spread, but the bearish camp remains cautious.The 5th day's selling was seen as an overreaction, providing an opportunity for bargain hunting. There are also views that uncertainty remains around concerns about a US recession. Emergency rate cuts by the Federal Reserve Board are being watched. In this way,Balance between bearish and bullish viewsIf it continues, the high volatility may continue.

In addition, the rapid decline in the short termevokes memories of Black Monday.There are also voices saying that if it experiences a sudden drop like at that time,When a second bottom occurs remains to be analyzed based on the experience of Black Monday.Let's consider it.Selecting 3 ETFs that can be used as hedging tools in a volatile market environmentWe will also pick up 3 ETFs.

Experience of Black Monday.
Black Monday refers to the major stock market crash that occurred on October 19, 1987, Monday in the US stock market. There are various interpretations for the cause of the decline, but at that time, the Hong Kong market plummeted, and the US market made a significant adjustment. In terms of the point that 'Asia fell first, and then the US declined,' it is subtly similar to the current situation. However, at that time, the decline rate of US stocks was more severe. On the day of Black Monday, the S&P 500 index fell by 20.5%, the NASDAQ 100 index fell by 15.1%, and the Nikkei Average fell by 14.9% on the following day.

Black Monday is coming back! Is there a second bottom? Here are 3 selected American ETFs that could be used as hedge instruments.

Afterwards, panic selling subsided temporarily and major indexes rebounded. However, the daily volatility was high. After a sharp rebound, it fell again and hit bottom on December 4, 1987, and then rebounded significantly. In other words,approximately 2 weeks after Black Monday, it bottomed out for the second time.Policy coordination by major countries' financial authorities led to the recovery of market confidence.

This time, the S&P 500 index and the NASDAQ 100 index did not decline as much as the Nikkei Average, butmany high-tech stocks have fallen as much as or more than the Nikkei Average.Amid lingering concerns about a US recession from the end of last week, the sharp rise in the yen on the 5th affected carry trades.

Many hedge funds manage high-tech stocks such as M7 of US big tech and semiconductors through yen carry trades. It is pointed out that the unwinding of carry trades, which involves borrowing yen and buying high-yielding assets, due to a more rapid appreciation of the yen than expected, has exacerbated the decline in high-tech stocks. Therefore, it can be said that the stabilization of the yen exchange rate and Japanese stocks is also important for US stocks.

It should be noted that the global stock market decline on the 5th was fundamentally due to concerns about the unwinding of yen carry trades and "US recession concerns + policy mistakes by the Federal Reserve." Therefore, the state of the US economy and the monetary policy of the Federal Reserve are even more important.US recession concerns + policy mistakes by the Federal ReserveThis is believed to be due to the influence of the toro. Therefore,The state of the US economy and the monetary policy of the Federal Reserve will be even more important.It is likely to become a sector. (*August 2nd issue)AI stocks are fluctuating wildly! Is the biggest turning point coming? While Nvidia plunged, there are stocks that are moving in the opposite direction.Please refer to "

In the current market, with the rise in unemployment rate exceeding market expectations, there are speculations of an emergency interest rate cut by the Federal Reserve (FRB) and "verbal intervention". If the FRB's response leads to a decline in recession concerns or avoids a recession altogether, it is expected to regain a full recovery trend.

Three selected US ETFs that can serve as hedging instruments
As hedge instruments to respond to volatile markets, three ETFs have been selected, including those that track the VIX index and ETFs in the essential goods and utilities sectors, which tend to attract safe-haven funds in a market environment where recession concerns linger.

● $iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX.US)$
It tracks the VIX index, also known as the "fear index." The VIX index, short for volatility index, tends to rise when market volatility increases. Therefore, VXX, which is linked to the VIX, is often used as a hedging instrument. It is important to note that the VIX index has high volatility and can experience sharp reversals. It should be used as a short-term hedge to control risks, while paying attention to the movement of the VIX index and the overall market.

　(Note: An actively managed hedge fund called "Black Swan Hedging") $Cambria Tail Risk Etf (TAIL.US)$ Some traders also use it as a hedging tool.

● $Ishares Trust Global Consumer Staples Etf (KXI.US)$
iShares Global Consumer Staples ETF aims to achieve similar investment results as an index composed of global consumer staples stocks.

● $Ishares Trust Global Utilities Etf (JXI.US)$
iShares Global Utilities ETF aims to achieve similar investment results as an index composed of global utilities stocks.

Market analyst Amelia on August 6th, 2024.
Source: Created by moomoo Securities based on Bloomberg and various sources

Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more

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聖地 : There was too much noise.

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181301798 : Since we say economic recession, economic recession, everyone panics and is unable to make a calm decision,
Certainly, it's important to prepare for a recession,
I wonder if we're still looking at American indicators from now on; it's strange with the employment statistics from before and the number of unemployment insurance applications, so even though Mr. Ueda of the Bank of Japan was a little surprise just by raising interest rates, but there is a possibility of additional interest rate hikes in the future, so it's ridiculous to see that
I'm not really thinking about anything!
I have absolutely no imagination!
Because I'm only staring at numbers
The yen suddenly appreciates and the dollar weakens
So the Japanese market is also causing a panic, and what is everyday life
even though nothing has changed in the past week
pathetic
Compared to the current situation where the Fed is saying additional interest rate hikes, it's left unchanged, and in a situation where interest rate cuts are already getting closer, it's not possible for the economy to do a soft landing, and it's still hard to decide anything
Negative thoughts
I just think it's calling for a bad series

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