通常情况下，股市修正并不罕见，美元往往会在股市修正初期走强，因为美元在全球市场中的重要地位，通常会在市场不稳定时吸引资金流入。Goldman Sachs pointed out that, typically, the dollar tends to strengthen during the early stages of stock market corrections; however, this time, the dollar declined simultaneously as the stock market was repriced. If concerns about the USA's economic outlook and better returns overseas persist, the simultaneous decline of the dollar and US stocks may continue in the short term.
Recently, a rare and alarming phenomenon has emerged in the global financial markets: both the US dollar and US stocks have significantly declined simultaneously, and this trend has been ongoing for some time.
According to a research report released by Goldman Sachs on the 19th, recent doubts about the sustainability of "exceptionalism" in the USA economy have triggered one of the fastest corrections in the USA stock market since the early 1970s.
Typically, stock market corrections are not uncommon, and the dollar often strengthens at the beginning of a stock market correction because of its important position in the global market, which usually attracts Inflow during periods of market instability. However, the simultaneous decline of the dollar this time is quite unusual, especially when the stock market is rapidly re-evaluating.
Goldman Sachs believes that the main reasons for the dollar falling alongside the USA stock market usually include three factors: changes in relative interest rates of the dollar, revised growth prospects for the USA economy, and concerns about USA crediting. If worries about the USA economic outlook (and better return prospects overseas) persist, the dollar's weakness during stock market declines may continue in the short term.
Historical Comparison: What factors might lead the dollar to fall alongside the stock market?
In recent weeks, doubts about the continued superiority of the USA economy have accelerated the rapid pullback of the USA stock market. Although stock market pullbacks are historically not uncommon, the simultaneous decline of the dollar is quite unusual, especially when the stock market is rapidly re-evaluating.
"Analyzing the ten fastest corrections in the USA stock market since 1973, we found that the dollar usually strengthens during the initial decline phase, with the current situation being the only exception— the nominal trade-weighted dollar is declining simultaneously."
Goldman Sachs points out that in the past 25 years, there have been 33 periods when the S&P 500 Index and the trade-weighted dollar fell simultaneously, but only 5 of these periods lasted at least two months. According to Goldman Sachs' research, this phenomenon is usually triggered by the following factors:
Relative interest rate changes: In more than 60% of cases, this phenomenon is caused by unfavorable shifts in relative interest rates against the dollar.
USA growth outlook revised down: The growth outlook for the USA relative to other major economies has been revised downward.
Concerns about USA credit: There are market concerns regarding USA credit.
Goldman Sachs pointed out that atIntraday Trade.When the S&P 500 Index closes down, there is a 40% chance that the dollar will weaken. However, instances where this dynamic lasts for a long time are rare.
Goldman Sachs believes that the current situation could become the sixth long-lasting case. Given the over-allocation of USA assets, if concerns over the USA outlook (and better overseas return prospects) persist, this period may even last longer.
Although it is expected that the dollar will regain strength later this year, Goldman Sachs also pointed out that the current downward trend may continue in the short term, especially considering the over-allocation of holdings in USA assets.
Editor/Somer
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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