Editor's note:《Inventory of major asset classes》The section closely follows macroeconomic developments, reviews the price performance of equity, bonds, foreign exchange, and commodities in the world's major markets to help people explore more investment opportunities in major asset classes.
This month, as the market expects the Fed to complete the rate hike, it is expected that the economy will take an early turn while achieving a soft landing, and risk appetite will return to the market.
The US GDP in the third quarter rose to the fastest in the past two years. The Federal Reserve's Beige Book confirms that the economy and prices are slowing simultaneously. Recent speeches by many Fed officials have also deepened the market's expectations for a soft landing in the economy and interest rate cuts in the first half of next year.
Futures traders are also betting that the next two FOMC meetings will not raise interest rates. The probability of interest rate cuts in March next year rises to 45%, and the probability of interest rate cuts in May next year is close to 80%. The market believes that the Fed will cut interest rates four times next year, for a total of 100 basis points.
As of November 29, 2023:
In terms of the stock market, compared with the decline from July to October, the US stock market can be called a rainbow of gains this month. The NASDAQ surged nearly 11%, and the S&P 500 Index and the Dow index recorded 8.51% and 7.19% during the same period, all of which are expected to record the best monthly performance in over a year.
The Hong Kong stock Hang Seng Technology Index also rose more than 4%, while the Hang Seng Index fell slightly.
Furthermore, the Nikkei 225 Index has surged 7.98% cumulatively, once reaching a new high of over 33 years.
The US bond market may usher in a full recovery! The 10-year US Treasury yield fell by more than 13% this month, which is expected to be the biggest monthly decline since December 2008.
Bank of America analysts predicted on Wednesday that as the Federal Reserve begins cutting interest rates next year, the US bond yield curve, which depicts different government bond matures, may become steeper in 2024.
Mark Cabana, head of US interest rate strategy at Bank of America (BofA), said in a media briefing that the US benchmark 10-year Treasury yield is expected to fall back to 4.25% by the end of next year. Comparing the yield curves of two-year and ten-year US Treasury yields, it is expected that the inversion will end and be positive next year, and the interest spread is expected to reach +25 basis points by the end of next year.
With the recent intensive release of a series of favorable real estate policies, market sentiment has been boosted. The cumulative increase in the Chinese dollar real estate bond index is over 11%.
Editor/Somer