Since this year, in the strong interest rate increase signal of the United States, the yield of US bonds has risen rapidly and the capital market has fluctuated sharply. In the adjustment stage, the decline of NASDAQ index > the decline of S & P 500, and the decline of growth stocks > the decline of value stocks.
Historical experience shows that the Fed's interest rate hike will not lead to a bear market in the stock market. Before the interest rate hike, affected by the expected warming of the market interest rate hike, the stock market usually has a correction of about 5%. However, in the first year of raising interest rates, US stocks tend to grow steadily, with an average return of 3.4%.
Comparing the economic data of several tightening cycles after 90 years, including the economic cycle, inflation rate and unemployment rate, we find that the Fed raised interest rates later than in the past, and corporate profits seem to have peaked. The Fed's response to rising inflation is too lagging, resulting in a rapid shift in market communication and expectation guidance. At the same time, the speed of subsequent monetary normalization is also significantly accelerated. Therefore, this tightening may be different from the previous tightening cycle. When the Fed actually starts to raise interest rates, especially when there are signs that the economy is slowing down, market volatility may increase. We need to be vigilant about the possibility of continued decline of US stocks after raising interest rates.
The spillover effect of US monetary policy tightening on the financial markets of emerging market economies depends in part on the US economic growth prospects. If the outlook for employment and profit growth in the United States is relatively bleak, and the Fed's interest rate increase is more due to the Fed's increased concern about inflation, the negative spillover effect on emerging economies will increase.
In the Fed's interest rate hike cycle after 2000, the impact of interest rate hike on emerging markets is not obvious, but the liquidity tightening caused by table contraction will lead to the decline of MSCI Emerging Market Index for 10 months. Considering the current economic expectations of the United States and the reduction of monetary policy, the impact of this round of fed interest rate hike cycle on emerging economies may be greater than several times after 2000.
Comparing the performance of Wande a before and after the last three fed interest rate hikes, we found that after the Fed's first interest rate hike, Wande a index fell sharply for about four months. At present, the divergence of monetary policies between China and the United States is closer to 2015. In 2015, China's economy also faced great downward pressure, and the monetary policy tended to be loose. In the four months after the Federal Reserve first raised interest rates in 2015, wandequan a fell by about 18%. It is expected that the current round of fed interest rate hike will also bring greater pressure on a shares.
The subsequent trend of A-Shares will depend on the comprehensive influence of internal and external factors. It is expected that A-Shares will enter the "policy based" trading stage. The intensity and rhythm of the implementation of China's steady growth policy will greatly affect the performance of the A-share market. The market needs further care from the policy side to establish investors' confidence in China's economic prospects.
