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Last week's non-farm payroll report fell significantly below expectations, causing the global market to experience the baptism of 'Black Monday', and there are even expectations of a 50 basis point rate cut in September. Furthermore, combined with selling pressure in the technology sector and a resurgence of expectations for a rate cut in the US, there is the possibility of a rotation in the US stock market.What investment strategies should investors take as a rate cut approaches? There is the possibility that the rotation will continue.Will market correction and buying opportunities coincide with the rate cut approaching?
In the short term, the market may enter a correction phase, but ultimately it is likely to turn upward. Typically, the stock market rises towards the first rate cut, and in the 1-3 months after the rate cut, there is a back and forth movement.
If there is no recession, the stock market will normally rise.In an economic expansion, there may be a period of give and take in the 1-3 months after a rate cut.If there is no economic downturn, it will then turn to an upward trend.It will likely turn upward again afterwards.Because there is a high chance that the first rate cut will take place in September, considering the year-to-date increase in major indices,there is a possibility of entering a consolidation phase.Furthermore, the first rate cut may coincide with the volatile prelude of the US presidential election.In the case of a soft landing, stocks tend to show strong performance in the 6-12 months after a rate cut.Investors...