CPI and Market Reaction: Strategic Moves and Profit Sharing
Yesterday, I commented on Moomoo about the potential market reaction to the CPI announcement. I mentioned that if the CPI were to fall below 3% or rise above 3.2%, the stock market would likely drop. Today, the CPI was announced at 2.9%, confirming my prediction. As a result, the market has been experiencing a decline, with the QQQ ETF down by approximately 0.5% and continuing to drop.
Recent Market Conditions
1. CPI Data: The CPI data revealed a lower-than-expected 2.9%, indicating a more rapid cooling of the economy than anticipated. This result aligns with signs of a recession and contradicts the optimistic statements from government officials and the Federal Reserve, who have been attempting to calm the market.
1. CPI Data: The CPI data revealed a lower-than-expected 2.9%, indicating a more rapid cooling of the economy than anticipated. This result aligns with signs of a recession and contradicts the optimistic statements from government officials and the Federal Reserve, who have been attempting to calm the market.
2. PPI Data: Yesterday’s PPI data also came in lower than estimated, suggesting further economic deceleration. Despite this, the market responded with a rise, likely due to reduced sensitivity to PPI compared to CPI.
3. Economic Outlook: Tomorrow’s initial jobless claims data will provide further insight into the state of the economy. Given the current trends, I expect these numbers to reflect a weakening economic condition, which will likely impact the market further.
My View on Federal Reserve Actions
Given the latest CPI and PPI data, it is highly likely that the Federal Reserve will cut interest rates in September. I anticipate a 0.5% rate cut, equivalent to two basis points, as the Fed responds to the accelerating economic slowdown.
Given the latest CPI and PPI data, it is highly likely that the Federal Reserve will cut interest rates in September. I anticipate a 0.5% rate cut, equivalent to two basis points, as the Fed responds to the accelerating economic slowdown.
Strategic Moves
Given these economic indicators, I have made significant adjustments to my portfolio:
- Sold Stocks: I sold a substantial portion of my holdings, including high-growth tech stocks, and shifted to bonds and their bullish options.
- Invested in Bonds: Specifically, I bought TMF, a 3x leveraged ETF tracking TLT (long-term US Treasuries). I believe that in the current economic climate, long-term bonds will rise as investors seek safer assets.
Given these economic indicators, I have made significant adjustments to my portfolio:
- Sold Stocks: I sold a substantial portion of my holdings, including high-growth tech stocks, and shifted to bonds and their bullish options.
- Invested in Bonds: Specifically, I bought TMF, a 3x leveraged ETF tracking TLT (long-term US Treasuries). I believe that in the current economic climate, long-term bonds will rise as investors seek safer assets.
Profit Summary
Here are the details of my recent trades and profits across different platforms:
Here are the details of my recent trades and profits across different platforms:
FNGU (eToro)
- Invested Amount: $3,409.63
- Units: 10.98994
- Open Price: $310.25
- Close Price: $374.33
- Profit/Loss: $704.24
- Profit/Loss %: 20.65%
- Invested Amount: $3,409.63
- Units: 10.98994
- Open Price: $310.25
- Close Price: $374.33
- Profit/Loss: $704.24
- Profit/Loss %: 20.65%
FNGU (Moomoo)
- Invested Amount: $4,674.88
- Units: 14
- Open Price: $333.92
- Close Price: $380.00
- Profit/Loss: $645.12
- Profit/Loss %: 13.80%
- Invested Amount: $4,674.88
- Units: 14
- Open Price: $333.92
- Close Price: $380.00
- Profit/Loss: $645.12
- Profit/Loss %: 13.80%
QQQ (StashAway)
- Invested Amount: $35,951.81
- Units: 77.7202
- Open Price: $435.61
- Close Price: $463.49
- Profit/Loss: $2,166.76
- Profit/Loss %: 6.40%
- Invested Amount: $35,951.81
- Units: 77.7202
- Open Price: $435.61
- Close Price: $463.49
- Profit/Loss: $2,166.76
- Profit/Loss %: 6.40%
Conclusion and Future Outlook
Given the current economic indicators, I anticipate that the market will experience a period of correction or sideways movement over the next month to month and a half. However, it is unlikely to drop below the lows seen on August 5th, when circuit breakers were triggered. The overall market outlook remains cautious, with high risks associated with growth stocks.
Given the current economic indicators, I anticipate that the market will experience a period of correction or sideways movement over the next month to month and a half. However, it is unlikely to drop below the lows seen on August 5th, when circuit breakers were triggered. The overall market outlook remains cautious, with high risks associated with growth stocks.
Therefore, I have strategically shifted my investments into bond bullish options, anticipating a rise in long-term US Treasuries. This move aims to capitalize on the safer asset class amidst economic uncertainty.
Call to Action
If you found this post insightful and helpful, please remember to like and follow my profile for more updates and viewpoints. Your support helps me continue sharing market insights and strategies. Stay informed and prepared to navigate the complexities of the market during these uncertain times.
If you found this post insightful and helpful, please remember to like and follow my profile for more updates and viewpoints. Your support helps me continue sharing market insights and strategies. Stay informed and prepared to navigate the complexities of the market during these uncertain times.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Long-term value investor, focused on identifying undervalued stocks through thorough market analysis and fundamentals.
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Alex Wong Cian Yih OP : The market's median prediction for the CPI was between 2.9% and 3.1%. However, in my view, a CPI below 3% at this time is not ideal. This indicates a faster-than-expected decline in inflation, which aligns with recessionary trends. Given these conditions, I believe that long-term U.S. Treasuries are poised for a significant increase. Therefore, it may be a good time to consider investing in U.S. Treasuries.
104607726 : Insightful. Thank u