[Awarded] The script for the suspension of the rate increase has already been written? Is the US Stock Style Switching?

The final session of 2023 is coming! Pause rate hike script already written in July? When does the interest reduction cycle start? 7 major tech stocks bounce back but the S&P 500 hits a new high in the year. Is the U.S. stock style shift underway?

1. Is the “pause rate hike script” already written in July? But is this pause in interest rate hikes to play an “opening card”?

The Fed will announce the December rate results at 3 a.m. on Thursday (Dec. 14), Beijing time. The market's point of contention is the timing of the Fed's rate cut compared to the widely anticipated pause in rate hikes. On the eve of the meeting, the CME FedWatch shows that the probability of a pause in interest rates in December is 97.1%.

Formerly inUS Inflation 3 Easy Down 3 Hard? Will July be the last rate increase?37% of mooers believe that July is the last time that the news has paused several times after interest rate highs, and the market has gradually come back to the conclusion that the stock market is only on its head. The trend in November has not fallen by 3%, as most of the mooers are judging by the adhesive state.

Data released on Tuesday (December 12th) showed that the U.S. CPI slowed slightly year-on-year in November, but core CPI grew at 4% year-on-year in October, without further declines. Notably, both November CPI and core CPI month-on-month growth showed acceleration. In the face of stubborn inflation uncertainty, markets are speculating that Fed Chairman Powell may continue to maintain a hawkish tone in his after-conference speech.

2. When does the interest rate cut start? Has the market started pricing in interest rate cuts?

Powell's last public address was on December 1, calling interest rate cuts speculation “premature.”

Nick Timiraos, a prominent reporter for the New Fed Press, also said that unless the U.S. economy weakens more than expected, the Fed is unlikely to seriously discuss when to cut interest rates this week or in the coming months.

But the market has started to talk about interest rate cuts and pricing:

Following the release of non-farm employment data in November, traders lowered their expectations for a rate cut to less than 50% in March next year; Fed watchers surveyed by Bloomberg last week forecast that the Fed will cut rates by 100 basis points next year, with the first rate cut coming in June; and the Fed in high recent days Forecast for the first interest rate cut from Q4 next year in advance to Q3 next year.

3. The seven major technology stocks are no longer hot, and the US share-style switch is underway?

Benefiting from the AI concept, the large stocks represented by tech stocks known as the “Seven Giants” dominated the U.S. stock market this year, while the smaller stocks represented by the Russell 2000 index performed flat. Small-cap stocks that have lagged for most of 2023 are shining again as markets continue to warm toward Fed rate cut expectations next year.

U.S. Small Stock Indices$Russell 2000 Index (.RUT.US)$It jumped more than 13% from its October low, and the MSCI European Small-Cap Index is up 12% since the end of last month.

The market is of the view that the future of small stocks will be more attractive in the future. The relative values of US small and large stocks are close to historical lows, according to LSEG Datastream data; second, because small companies tend to rely more on short-term debt, reducing interest rates will greatly alleviate the burden on small companies; Thirdly, earnings for small companies are expected to improve, with LSEG data showing that earnings of Russell 2000 index constituents are expected to grow by around 30% next year after falling 11.5% in 2023.

At the same time, the bull ring@狮子做 @趋势交易叶荣添 A number of mooers have been posting recently, discussing whether a US stock style swap is happening.

Interactive Session:

1. Is there a suspension of interest rate increases in December?

2. What about the Fed starting to cut interest rates in March? The reason is?

3. Pre-plan the interest reduction period, what assets should I buy? Major stocks or SME stocks, value or growth?

Please select one for the above questions and come to the comments section to talk about your views ~

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Event Hours:As at 24h, 17 December 2023, Beijing time

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