Under the cover of the U.S. Federal Reserve's ultra-hawkish remarks, Taiwan stocks opened lower and lower, and the week has been black for five consecutive days.


■Xiao Huizhong

On September 23, Taiwan stocks were dragged down by the weak trend of related groups, including high-priced stocks or weight stocks such as technology stocks, coupled with the lack of market investment confidence and a strong wait-and-see atmosphere. Under the cover of remarks, the broader market opened lower and lower, and ended at 14,118.38 points, down 166.25 points. The weekly trading volume was 200.803 billion yuan.

Taiwan stocks wait-and-see atmosphere is relatively strong

Taiwan stock market is full of conservative atmosphere, the recent trend is volatile.

Especially affected by the mood of the US Federal Reserve's hawkishness and Chairman Powell's more hawkish remarks, the volatility has been relatively large, and the overall volume of recent transactions has also been relatively shrinking, showing that the market is still relatively strong in wait-and-see atmosphere.

Please read on...

The U.S. Federal Reserve unanimously passed a meeting a few days ago, announcing a 3-yard rate hike, raising the policy rate to a range of 3-3.25%, accumulating five consecutive rate hikes so far this year, including the latest three consecutive rate hikes of 75 basis points, extending The fastest pace of rate hikes since the 1980s has pushed rates higher to their highest level since 2008.

In terms of factors affecting the disk, since the beginning of this year, there have been many variables in the international political and economic environment, including inflation, the Fed’s rate hike process, geopolitical risks such as the Ukraine-Russia conflict, China’s zero policy, changes in consumer demand momentum, and investment. mentality of the person.

Market sentiment remains relatively conservative amid hawkish comments from the Federal Reserve and uncertainty about inflation.

As far as the industry is concerned, it is still a period of stock price correction in which the stocks of technology stocks continue to be revised. The most severe downward revision of fundamentals has begun. The market is digesting investors' expectations for the degree of profit slowdown in 2023. , the Federal Reserve has adopted a positive pace of interest rate hikes and demonstrated a strong anti-inflation determination, which has also added to many uncertainties in the economy.

Looking back over the past month or so, the stock market has made a strong rebound, from relatively large declines to historical lows, and stocks with light bargaining chips have risen until the global central bank annual meeting at the end of August and the Federal Reserve meeting. The chairman's remarks reiterated his determination to suppress inflation, and the index pulled back significantly.

The stock market has always been expected to operate. From the remarks of the Federal Reserve Chairman at the end of August, to the Fed's strong anti-inflation determination and ultra-hawkish remarks in the past few days, the market's expectations for interest rates have been pushed up, which also means that future evaluations may be be adjusted again.

Rising interest rates to suppress inflation, terminal consumption may be affected

Looking at the US retail sales figures, after deducting inflation, the volume is close to the point of no growth. However, referring to the labor market participation rate figures, it is still a high probability that rising wages will push up inflation. Continued interest rate hikes will suppress inflation, and end consumption will be affected. situation will gradually appear.

Industry research began to receive orders for revisions in May and June, and it has continued to be in progress until now. Corporate profits will see another wave of profit revisions in September and October, so that the stock price will be re-anchored.

If we look at the direction of corporate profits next year and the downward revision expectations, it is estimated that there will still be downward pressure on highly rated stocks in the next two months.

However, we are cautiously optimistic about the expected downward revision. We will observe the ongoing revision dynamically, and keep an eye on the beneficiary stocks that are lagging behind, relatively cheap, valued and long-term trends emerging.

For the market outlook is to maintain a neutral view.

Uncertainty in the overall economy, the market outlook is still under pressure

One of the main principles is that inventory digestion and other bad news will come to an end, and the stock price will mostly reflect bad news. However, the challenge facing us is that there are many uncertainties in the overall economy. pressure on the city.

As for the observation indicators, as the current interest rate gap widened by the active interest rate hike policy of the United States is still one of the key factors affecting the direction of market funds at this stage, in addition to paying attention to changes in fundamentals, the dollar index can also be Change as a reference for investment.

(The author is the manager of Allianz Taiwan Dam Fund)

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