Market Performance (Wednesday): $S&P 500(.SPX)$ : +1.1% (Best Fed-day since July 2024). $NASDAQ(.IXIC)$ : +1.4%. Consumer Discretionary Stocks: +1.9% (Leading the rally) . $Cboe Volatility Index(VIX)$ (Lowest March reading)
Powell Press
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Markets responded positively to Powell’s steady stance on rate cuts and reassurance on economic resilience. The S&P 500 is now at a critical juncture, with the VIX needing to decline further to confirm a sustained bull market.
1️⃣ Key Takeaways from Powell & the Fed Meeting
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Fed’s “wait-and-see” approach remains in place
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2 rate cuts still projected for 2024
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Inflation forecast revised UP, economic growth forecast revised DOWN
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Powell acknowledges higher uncertainty but remains confident in policy tools
“The hard data are still in good shape. It’s the soft data—surveys, sentiment—that show significant downside risks.”
Fed Funds Futures interpreted Powell’s comments as dovish, reinforcing rate-cut expectations, fueling a rally.
2️⃣ Uncertainty Remains: Tariffs & Inflation Risks
Tariffs
Powell acknowledged uncertainty 18 times in his press conference, emphasizing that:
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Tariffs could delay further inflation progress.
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The Fed remains flexible but data-dependent.
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Economic outlook has become more unpredictable
3️⃣ Sector Spotlight: Chinese Tech & US Large-Cap Tech
Chinese tech stocks (KWEB proxy) $KraneShares CSI China Internet ETF(KWEB)$ have outperformed the Nasdaq 100 by 2 standard deviations over the past year. Historically, when US large-cap tech was this oversold, it rebounded with double-digit gains 100% of the time over the next year. $Tencent Holding Ltd.(TCEHY)$ $NVIDIA(NVDA)$
$KWEB
4️⃣ What’s Next?
VIX needs to decline further to confirm bull market status. Market will closely watch upcoming inflation and labor market data. Fed’s next moves remain highly uncertain, despite today’s optimism
Powell’s steady message helped calm markets, but investors should remain cautious as uncertainty around inflation, tariffs, and rate cuts persists…
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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.
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