Outlook for the USA market: Is gold trending upwards again? Drackenmiller warns that the early rate cut by the FRB could reignite inflation.

Good evening, Moomoo users!Tonight's analysis of NY stock market.

Market Overview
The USA market started with the Dow Jones Industrial Average, which consists of high-quality stocks, down by 11.01 dollars at 43,718.92 dollars, while the Nasdaq Composite Index, with a high proportion of technology stocks, began 100.96 points higher at 19,084.43. The S&P 500, which consists of 500 large-cap stocks in the USA, started 18.17 points higher at 5,947.21.

Rising bond yields and economic strength are fueling unrest in the bond market.
● Concerns are growing that the Federal Reserve Board (FRB) will not cut interest rates as expected, putting pressure on the bond market. The yield on 10-year government bonds has exceeded 4.2%, pushing up borrowing costs globally. Additionally, the ICE BofA MOVE index has hit its highest level this year, indicating increased volatility in the bond market.
Several factors such as the strong US employment market, revisions to rate cut expectations, and concerns about inflation rising due to the inauguration of President Trump are supporting bond selling. Furthermore, the expansion of the budget deficit could lead to increased bond issuance, which is likely to have further impacts on the market.

Gold is once again on an upward trend.
Despite the rise in government bond yields, precious metals are increasing. Normally, when bond yields rise, prices of gold and silver, which do not pay interest, tend to fall.
However, with the US elections just two weeks away, there is a potential for renewed uncertainty about Donald Trump's presidency, leading investors to seek safety. Concerns also exist about the extent of Israel's strong retaliation against Iran. Additionally, the Fed is being pressed to decide whether to continue rate cuts.

As Chairman Powell and President Trump's second term escalate inflation concerns, they face challenges.
Wall Street, following President Trump's reelection, is scaling back expectations of Fed rate cuts. Analysts from JP Morgan and others are now anticipating a narrower rate cut margin compared to before the election, while Nomura Securities expects the number of rate cuts next year to be reduced from 4 to 1.
President Trump's economic policies, including tariff hikes and tax cuts, could lead to an increase in inflation rates, complicating the Fed's decision-making process and potentially delaying or halting future rate cuts.
Amid the global market reacting to policy uncertainties and upcoming central bank decisions, Fed Chair Jerome Powell is compelled to assure investors that the Fed can address the impacts of President Trump's second term.

Druckenmiller warns that an early rate cut by the Federal Reserve Board may reignite inflation.
Mr. Stanley Druckenmiller believes that the current narrow leadership in the stock market is a warning sign of a bearish market, criticizing the Federal Reserve Board (FRB) for its rate cut to address concerns about reigniting inflation.
Mr. Druckenmiller regrets the early sale of Nvidia shares, while showing short-term caution towards AI stocks due to their high valuation, likening the current AI trend to the internet boom of 2000.
He states that the combination of human intuition and AI can generate powerful investment capabilities, potentially surpassing both human and machine investors.

Foreign investment in US stock ETFs exceeded the 2021 record, pushing up the S&P 500 index.
Investors in Europe and the Asia-Pacific region invested $147 billion in US stock-focused ETFs this year, surpassing the $124 billion recorded in 2021.
●Out of this, $106 billion flowed in from Europe and $41 billion flowed in from the Asia-Pacific region, indicating high international interest.
●While these inflows are lower compared to inflows from US investors, they have significantly contributed to the 23% rise in the S&P500 this year.