Black Monday is back! Is there a bottom 2? 3 US ETFs that can be hedging tools
Is “Black Monday” coming back. On Monday, 8/5, the dollar yen rapidly advanced to the 1 dollar = 141 yen level, and Japanese stocks plummeted.The decline in the Nikkei Stock Average exceeded Black Monday（The rate of decline was 12.4%）。Concerns about the US recession are growinginside,The appreciation of the yen, which progressed more rapidly than expected, is risk-offIt's connected. It has been pointed out that forced trading and rebalancing of stocks associated with the reversal of yen carry trade also contributed to the decline. Major stock price indices from Asia and the United States all plummeted on the 5th,Simultaneous global stock depreciationIt became.
On the following day, on the 6th, the dollar to yen completely reversed and was sold back to the 145 yen range of 1 dollar. The US ISM non-manufacturing business climate index improved more than expected, leading to dollar purchases and yen sales. In response to that, the Nikkei Stock Average was on the 6th10.2% increase. Major Asian stock indices and US stock index futures also rebounded.
I'm relieved for the time being because of the pick-up on the 6thIt has spread, but the bearish groups have not lost their cautious stance. This is because there is still a sense of uncertainty surrounding concerns about the US recession. On the other hand, there is also a view that the sale on the 5th overreacted and provided an opportunity for a hot buy. Emergency interest rate cuts have been observed regarding the Federal Reserve's monetary policy. like thisThe antagonism between the bearish and the bullishIf it continues, the state of high volatility (price fluctuation rate) may continue.
Note, what is the sharp drop in a short periodReminiscent of Black MondayThere is also a voice saying. If it becomes one level cheaper like it was back then,When is the second bottom, consider from the Black Monday experienceI'll try it.3 ETFs that can be hedging measures in response to fluctuating exchange ratesThey will also be picked up.
Black Monday indicates a major stock price crash that occurred in the US stock market on Monday 1987/10/19. There are various interpretations of the factors behind the decline, but at that time, after the Hong Kong market plummeted, the US market adjusted drastically. There is a slight similarity with this one in that “Asia fell first, and the United States declined.” However, at that time, the rate of decline in US stocks was more intense. On Black Monday, the S&P 500 index fell 20.5%, the Nasdaq 100 index fell 15.1%, and the Nikkei Stock Average fell 14.9% on the next 20th.
After that, panic selling temporarily subsided, and the main indices rebounded. However, the daily fluctuation rate is large. After a sharp rebound, it fell again, bottomed out on 1987/12/4, and then rebounded in earnest. In other words,About 2 weeks after Black Monday, I hit the 2nd bottom. Policy coordination by the financial authorities of major countries led to a restoration of market confidence.
This time, the S&P 500 Index and Nasdaq 100 Index haven't dropped as much as the Nikkei Stock Average,Among individual stocks, there are also many high-tech stocks that have fallen to or above the Nikkei Stock Average. This is because while concerns about the US recession came to an end last weekend, the rapid advance in yen appreciation on the 5th had an impact on carry trade.
Many hedge funds manage high-tech stocks such as US Big Tech's M7 and semiconductors through yen carry trades. It has been pointed out that the reversal of carry trade, which purchases high-yield assets by borrowing Japanese yen, contributed to the decline in high-tech stocks in response to the rapid appreciation of yen than expected. Therefore, it can be said that it is important for US stocks for the yen exchange rate and for Japanese stocks to calm down.
Note that the simultaneous global stock depreciation on the 5th is not only a rebound in yen carry trade, but fundamentally”Concerns about the US recession+concerns about the Fed's policy mistakes” (*) is thought to be in the background. Therefore,Trends in the US economy and the Federal Reserve's monetary policy are more importantLet's be. (*As of 8/2”AI stocks are fluctuating! Has the biggest mountain reached? Amid NVIDIA's sharp decline, what are the high retrograde stocks(See”.)
Currently, in response to an increase in the unemployment rate that exceeds market expectations, emergency interest rate cut observations and “verbal intervention” observations by the Fed have also surfaced. If recession concerns recede or are avoided due to the Federal Reserve's response, a full-scale recovery trend will be restored.
In addition to stocks linked to the VIX Index, we picked up daily necessities and public service sector ETFs where evasion funds tend to gather in a market environment where concerns about recession are smoldering as 3 ETFs that can be used as hedging tools in response to fluctuating exchange rates.
● $iPath Series B S&P 500 VIX Short-Term Futures ETN.US$
It is linked to the “VIX” index called the fear index. The “VIX” index is an abbreviation for volatility index, and as the name suggests, it tends to rise when market volatility increases. Therefore, VXX linked to VIX is often used as a hedging means. The caveat is that the fluctuation rate of the VIX index is large, and there are cases of sudden reversals. It would be necessary to control risk as a short-term hedging tool and keep an eye on trends in the VIX Index and the overall market price.
It is linked to the “VIX” index called the fear index. The “VIX” index is an abbreviation for volatility index, and as the name suggests, it tends to rise when market volatility increases. Therefore, VXX linked to VIX is often used as a hedging means. The caveat is that the fluctuation rate of the VIX index is large, and there are cases of sudden reversals. It would be necessary to control risk as a short-term hedging tool and keep an eye on trends in the VIX Index and the overall market price.
(Note, the active operation type called “black swan hedging” $TAIL.US$ (There are also traders who use it as a hedging tool.)
● $KXI.US$
The iShares Global Daily Necessities ETF aims to achieve investment results equivalent to an index composed of global stocks in the daily necessities sector.
The iShares Global Daily Necessities ETF aims to achieve investment results equivalent to an index composed of global stocks in the daily necessities sector.
● $JXI.US$
The iShares Global Utility ETF aims to produce investment results equivalent to an index composed of global stocks in the utilities sector.
The iShares Global Utility ETF aims to produce investment results equivalent to an index composed of global stocks in the utilities sector.
8/6/24 Market Analyst Amelia
Source: Created by Moomoo Securities using Bloomberg and various materials
Source: Created by Moomoo Securities using Bloomberg and various materials
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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聖地 : There was too much noise.
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