The US ISM service index surpassed expectations and returned to expansion in July, and with the appeasement of Federal Reserve officials, the Japanese and South Korean authorities, and Wall Street banks, the market's fears about the economic recession have abated. Some investors believe that they are overreacting to concerns about the US economy's immediate recession. On Tuesday, safe-haven assets fell in the market, while the three major US stock indices all ended three consecutive declines. The Dow $.DJI.US$ Up 0.76%, NASDAQ $.IXIC.US$ Up 1.03%, S&P 500 $.SPX.US$ Up 1.04%.

Citibank strategist Beata Manthey wrote in a memo that the bank's “bear market checklist” — measures include stock valuations, earnings curves, investor sentiment, and profitability, and suggests “buying on dips.” But she said, “Once we see more complete evidence of position adjustments, we will be more confident.”

According to Goldman Sachs's latest brokerage data, as the global market experienced “Black Monday” this Monday, the global stock market received modest net capital purchases, with long buys outstripping short sales.

Judging from Citi's views and the market buying situation, the time for US stocks to bottom may have arrived.

The factors that caused the sharp decline in global assets have all been mitigated

According to market analysis, the main factors of this round of “Black Monday” are the following three points:

1. US employment data triggers expectations of a recession;

2. The Bank of Japan's interest rate hike led to an appreciation of the yen;

3. Borrowing yen to buy high-interest assets was liquidated in carry trade, causing global stock markets to plummet.

Up to now, the current factors have all been mitigated:

1. The US ISM service PMI in July exceeded expectations, reducing market concerns about the US recession: the US ISM service sector PMI rebounded from 48.8 to 51.4 in July, which was also higher than the expected value of 51. The index expanded again, breaking away from the worst contraction in four years recorded in June. Among them, the sub-indices of employment, new orders, and business activity all returned to the expansion range, boosting the July data.

2. At 9:30 a.m. on Wednesday, Bank of Japan Vice Governor Shinichi Uchida delivered a speech:

Recent fluctuations in the stock market and foreign exchange market have had an impact. If market fluctuations affect the outlook, then the interest rate path will change.

The Bank of Japan will not raise interest rates when the market is unstable; currently, it is necessary to firmly implement an easing policy.

If the outlook becomes a reality, the degree of easing will be adjusted. Interest rates are not lagging behind the situation, and we are watching the impact of the market on the economy with a sense of urgency.

Stimulated by the speech, USD/JPY $USDJPY.FX$ Today's intraday price rose by more than 2.4%, reaching a high of 147.907.

3. Regarding “Japanese yen arbitrage trading,” Goldman Sachs's foreign exchange team's position ratings indicate that the Japanese yen short positions have basically been liquidated, which indicates that the market is about to bottom; the July CFTC position data from FaXing also shows that most of the short Japanese yen positions have been closed. Of course, there are institutions that have different views. J.P. Morgan said that currently only half of the Japanese yen arbitrage transaction has been closed.

Institutions suggest bottom-checking US stocks

Cathy Seifert, an analyst at CFRA Research, believes that if US stocks continue to plummet, it will be a “golden opportunity” for Buffett to bottom out, and the record cash reserves of 276.9 billion dollars he has accumulated at that time will come into play. Buffett is known for his self-discipline; he only buys when he sees a bargain. Over the years, he has been lamenting that due to high valuations, there are too few deals to be made. But as the stock market plummets, it may soon be time to buy.

Citibank strategist Beata Manthey wrote in a memo that the bank's “bear market checklist” — measures include stock valuations, earnings curves, investor sentiment, and profitability, and suggests “buying on dips.” But she said, “Once we see more complete evidence of position adjustments, we will be more confident.”

According to Goldman Sachs's latest brokerage data, as the global market experienced “Black Monday” this Monday, the global stock market received modest net capital purchases, with long buys outstripping short sales. Purchases in the US stock market come from individual stocks. Net purchases of individual stocks by hedge funds were the biggest in about 5 months. They were mainly driven by long purchases, and there was little capital flow from bears.

Judging from Citi's views and the market buying situation, the time for US stocks to bottom may have arrived.

“Cathie Wood” continues to buy US technology stocks this week

At a time when US stocks plummeted this week, Cathy Wood's Ark Investment Management Company is “bottoming out” technology stocks. On the two trading days of this week, the six funds under “Cathie Wood Tou'” bought technology stocks as follows:

AMD $AMD.US$ Buy 130,318 shares;

Amazons $AMZN.US$ Buy 22,167 shares;

Meta Platforms $META.US$ Buy 12,545 shares;

Tesla $TSLA.US$ Buy 12426 shares.

How to bottom out US stocks through ETFs?

Buffett believes that the passive investment model is ideal for ordinary investors. It not only saves time to research individual stocks, but also has a better chance of profit, and is suitable for investors interested in long-term deployment of US stocks:

What I often recommend is a low-cost S&P 500 index fund, but only a few humble friends will take my word for it. Hardly any of the richest investors, fund managers, and pension funds actually followed my advice; they politely thanked me. However, he turned his head around and was persuaded by the asset management manager, who charged high management fees, and chose a different investment method.

ETF index equity funds linked to the S&P 500 include the SPDR S&P 500 ETF $SPY.US$ , S&P 500 ETF-iShares $IVV.US$ and S&P 500 ETF-Vanguard $VOO.US$ etc.

Among them, $SPY.US$ It is the first ETF in US history. It was founded in 1993, and is also the largest ETF in the world. SPY has extremely high liquidity and huge daily trading volume, which makes it easy for investors to buy or sell, and the spread (spread) is usually very small, which is particularly beneficial to large traders.

$IVV.US$ It is an ETF issued by iShares, a subsidiary of BlackRock, which also aims to track the performance of the S&P 500 index. The cost ratio of IVV is lower than SPY, which is around 0.03%. Although IVV's liquidity is not as high as SPY, for most investors, its average daily trading volume is still sufficient to meet normal trading needs.

$VOO.US$ It is an ETF managed by Vanguard Group, a well-known low-cost fund manager, and also closely tracks the S&P 500 index. VOO's fee ratio is usually around 0.03%, which is a reflection of Vanguard's long-standing low-cost investment strategy.

Also, if you want to invest in a S&P 500 leveraged ETF, double the S&P 500 ETF-ProShares $SSO.US$ and 3x longer S&P 500-ProShares $UPRO.US$ Wait, that's also a good choice.

In addition to this, there are still a large number of index ETFs for investors to choose from in the US stock market. Bulls can check them by clicking Market>ETF>US Stocks>Index ETF~

Editor/Jeffy