The negative consequences of April will emerge this week...
The sentiment in the US stock market is very positive right now, but this Friday the US non-farm payroll data will be released. Be cautious of the poor data from April, as this week will be a turning point for the US stock market!
In my opinion, the recession will last until mid to late May, after all the panic from April's data is fully released, and after Trump completes the unequal agreements with other small countries. Only then will Trump truly engage in trade negotiations with China.
Recently, the approach remains tough; unless there is another triple threat to stocks, bonds, and currencies, it may be possible for Trump's attitude to change!
Historical experience tells us that major market bottoms generally occur at the end of an interest rate reduction cycle!
Especially as the earnings report season is nearing its end, the profitability exhibited by the AI industry seems unable to justify their current market cap, and the biggest bubble currently in the Nasdaq is supported by the AI industry, while also facing competitive pressure from the AI industry in China.
Therefore, if the sentiment of this rebound weakens and gradually enters into the realization of earnings report expectations, under the dual pressure of economic indices not meeting expectations, it is highly likely to accelerate the decline!
It can be observed that the stabilization point for the Nasdaq last week actually rebounded when the weekly line approached the 120-week line. The second round of accelerated decline may continue from early May to mid to late May, and the true stabilization point may reach the 250-day weekly line!
This is within the weekly range mentioned in my previous article for the year 2023! Currently, it is still fluctuating in the first range, which aligns with my views from a month ago!
Do not expect the Federal Reserve to lower interest rates early after such poor economic data performance in April (with expectations of high inflation).
Especially since Tesla's Earnings Reports have shown that they do not meet expectations, the main reason being Musk's political maneuvers have made some consumers feel disgusted. Recently, Trump has also discussed attempting to ease tariffs on Chinese Autos (the A-share market has already responded today).
Therefore, Trump seems to be in a dilemma, as currently, China can 'disregard' tariffs, exporting products under tariffs while still profiting, mainly with electric vehicles. If Trump continues to take a strong stance against China, the US stock market will continue to release panic.
If Trump eases tariffs on Chinese electric vehicles, this will be another pressure on Tesla, and undoubtedly, in a fair competition scenario, Chinese electric vehicles will significantly squeeze Tesla's market share. The pessimistic sentiment towards Tesla will also spread to the Nasdaq and the entire market!
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Everyone should still be cautious when participating in the rebound market! This is a personal opinion and does not constitute investment advice!
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May 6 20:45
S&P 500's Put/Call Ratio Hits 5-Year Low: Fear Fades and Bottom Near?
R Dragon (6龍交易手) : Perhaps the rebound is about to end.
151037991 : Will it be able to conclude before tonight's rebound.
HEM_JC OP R Dragon (6龍交易手) : It’s almost done.
HEM_JC OP 151037991 : It’s almost done.
MoneyMaker_Ivan : The rebound has ended, just worried about a direct reversal.
保守投资者 : Clearly guessed wrong and underestimated the resilience of the U.S. stock market.
HEM_JC OP 保守投资者 : Wait a bit longer, no rush. I mentioned earlier that it should be around mid to late May.