The fluctuation of US stocks intensifies, and crypto assets encounter a pullback

This week, the US stock market experienced the largest fluctuation since 2019, although the overall performance remained basically flat. The market moved like a roller coaster, with a rebound following a panic sell-off on Monday, followed by another decline. On Thursday, unemployment data triggered bottom-fishing sentiment, and Friday continued the rebound but at a slower pace.

In the past week, the stock market and the Crypto Assets market have been closely linked. The themes of concern in the market are the U.S. recession and the unwinding of yen arbitrage trades, but this may be an overinterpretation. The real panic was very brief, and there was no situation of selling off all assets as in times of crisis.

From the data, the current performance of the US economy is good, with steady growth in corporate profits. The likelihood of Japan continuing to raise interest rates is low. The sell-off on Monday seems more like an unexpected mistake, and further observation of data changes is necessary. In the short term, US30 and US500 may outperform US100, but the cyclical sector has lagged recently, and a larger rebound cannot be ruled out.

The rise in bond prices has provided a buffer against the decline in the stock market. Recent interest rates have dropped significantly, and unless there are clear signs of recession, the current pricing may be excessive. In the coming weeks, the U.S. interest rate market may exhibit a pullback pattern after a rise, but in the long term, it remains in a buy-on-dips trend.

The crypto market has experienced the most dramatic pullback since the FTX crisis, with Bitcoin's price once dropping over 15%. Due to external shocks causing this, and the technical aspects being severely oversold, a strong rebound followed. Institutional investors maintain a relatively optimistic attitude towards the crypto market.

Overall, the recent market fluctuations have intensified, but there has not yet been a large-scale panic sell-off. Investors still need to closely monitor the upcoming economic data such as CPI and retail sales, as well as important events like the Jackson Hole meeting and NVIDIA's earnings report, to assess the economic outlook and policy direction.