#10月PPI低于预期 This PPI reading coming in below expectations is essentially “a small positive in the face of bad expectations.” It won’t directly trigger a broad-based rally, but will only temporarily ease extreme market panic.
U.S. stock market performance:
Both PPI month over month at 0.3% and year over year at 6.5% came in below expectations. The market immediately cut the odds of an aggressive 50-basis-point Fed rate hike in December from 14% to 9%, while bets on a more moderate 25-basis-point hike rose to 91%. This is equivalent to temporarily moving aside the sword of “aggressive rate hikes” that had been hanging over the market.
📊 Core logic: The real impact of cooling inflation
1. This PPI reading was only “slightly below expectations,” and is by no means a sign that inflation is rapidly falling back to 2%. Combined with the earlier-than-expected CPI reading, core services inflation remains highly sticky, and the Fed has absolutely no reason to pivot directly to rate cuts.
2. The market had already priced in the extreme bearish scenario of a possible 50 bp hike in December. This data rules out that worst-case option, amounting to an expectations adjustment, not a trend reversal.
3. Retail sales, employment, and other data are still to come. As long as consumption doesn’t fall off a cliff, a 25 bp hike in December is almost certain.
📈 Immediate reactions across three asset classes
• U.S. stocks: Previously weighed down by high inflation and rate-hike fears, technology and growth stocks suffered the steepest declines. Following this data release, the Nasdaq should be much more sensitive than the Dow, as the market reprices expectations that “the duration of high interest rates will be shorter.” However, as long as the 10-year Treasury yield remains above 5%, pressure on corporate earnings won’t fully ease, making it difficult for the broader market to stage a sustained rally.
• BTC: As a highly volatile risk asset, it is far more sensitive to rising interest rates than stocks. Amid growing rate-hike expectations, it had already fallen below $74,000, hitting a three-month low. With the negative prospect of a 50 bp hike now ruled out, it will see an oversold rebound. But as long as Bitcoin ETFs continue to see outflows, coupled with concerns about tighter regulation, the rebound will be limited, and it will be difficult to break directly above its previous high.
• Gold: It will see a modest recovery from its previous oversold state in the short term, but a direct reversal into a strong uptrend is unlikely. A 25 bp hike remains a 91%-probability event, so the opportunity cost of holding non-yielding gold remains high, while support from the dollar and Treasury yields is still in place. However, the long-term case for gold remains intact as central banks continue to buy it, so prices won’t fall sharply and will broadly trade in the $4,000-$4,100 range.
🎯 Practical recommendations
1. Don’t blindly chase U.S. stocks higher. Prioritize leading companies in the AI supply chain with exceptionally strong cash flow. These stocks can withstand a high-interest-rate environment and benefit from this repricing of expectations.
2. Don’t heavily buy the dip in BTC at current levels. Wait until the December policy meeting has concluded and the rate-hike uncertainty is fully resolved, then decide whether to add based on the liquidity environment at that time.
3. Keep a core gold position for the long term, but don’t chase short-term gains. Wait for a clear signal that real interest rates are falling before adding to lower your cost basis.#WCTCS9
U.S. stock market performance:
Both PPI month over month at 0.3% and year over year at 6.5% came in below expectations. The market immediately cut the odds of an aggressive 50-basis-point Fed rate hike in December from 14% to 9%, while bets on a more moderate 25-basis-point hike rose to 91%. This is equivalent to temporarily moving aside the sword of “aggressive rate hikes” that had been hanging over the market.
📊 Core logic: The real impact of cooling inflation
1. This PPI reading was only “slightly below expectations,” and is by no means a sign that inflation is rapidly falling back to 2%. Combined with the earlier-than-expected CPI reading, core services inflation remains highly sticky, and the Fed has absolutely no reason to pivot directly to rate cuts.
2. The market had already priced in the extreme bearish scenario of a possible 50 bp hike in December. This data rules out that worst-case option, amounting to an expectations adjustment, not a trend reversal.
3. Retail sales, employment, and other data are still to come. As long as consumption doesn’t fall off a cliff, a 25 bp hike in December is almost certain.
📈 Immediate reactions across three asset classes
• U.S. stocks: Previously weighed down by high inflation and rate-hike fears, technology and growth stocks suffered the steepest declines. Following this data release, the Nasdaq should be much more sensitive than the Dow, as the market reprices expectations that “the duration of high interest rates will be shorter.” However, as long as the 10-year Treasury yield remains above 5%, pressure on corporate earnings won’t fully ease, making it difficult for the broader market to stage a sustained rally.
• BTC: As a highly volatile risk asset, it is far more sensitive to rising interest rates than stocks. Amid growing rate-hike expectations, it had already fallen below $74,000, hitting a three-month low. With the negative prospect of a 50 bp hike now ruled out, it will see an oversold rebound. But as long as Bitcoin ETFs continue to see outflows, coupled with concerns about tighter regulation, the rebound will be limited, and it will be difficult to break directly above its previous high.
• Gold: It will see a modest recovery from its previous oversold state in the short term, but a direct reversal into a strong uptrend is unlikely. A 25 bp hike remains a 91%-probability event, so the opportunity cost of holding non-yielding gold remains high, while support from the dollar and Treasury yields is still in place. However, the long-term case for gold remains intact as central banks continue to buy it, so prices won’t fall sharply and will broadly trade in the $4,000-$4,100 range.
🎯 Practical recommendations
1. Don’t blindly chase U.S. stocks higher. Prioritize leading companies in the AI supply chain with exceptionally strong cash flow. These stocks can withstand a high-interest-rate environment and benefit from this repricing of expectations.
2. Don’t heavily buy the dip in BTC at current levels. Wait until the December policy meeting has concluded and the rate-hike uncertainty is fully resolved, then decide whether to add based on the liquidity environment at that time.
3. Keep a core gold position for the long term, but don’t chase short-term gains. Wait for a clear signal that real interest rates are falling before adding to lower your cost basis.#WCTCS9
