Never forget 9/18!

Some friends are curious: Why didn’t the market fall when the Federal Reserve raised interest rates, but instead rise, without any large-scale crisis breaking out as people said online? Actually, it has to do with the market’s current expectations. U.S. media exclusively revealed that next Tuesday, Trump will meet with leaders of the Gulf states at the UN General Assembly to finalize the postwar plan for Iran. This has given the market hope that the U.S.-Iran war can be resolved peacefully. International oil prices fell in response, while gold and stocks rose across the board. We have heard too many such reports before, often about peace negotiations—but what happened in the end? Oil prices rose again. So why is this time different? Because after the Fed’s rate hike, the 10-year U.S. Treasury yield rose above 5%, and U.S. stocks also fell. This put a great deal of pressure on Trump, because if he wants to win the midterm elections, he must stabilize the stock market and prevent it from falling. The prerequisite for stabilizing the stock market is to keep interest rates at a high level, so he has to find ways to make oil prices fall. How? Through negotiations and a peaceful resolution to the U.S.-Iran war. This is the simplest method. Therefore, investing is mainly about looking at the future. As for things everyone already knew, such as rate hikes, there is no need to pay too much attention to them because the market had already priced them in. I also mentioned in yesterday’s post that rate hikes should be viewed from two perspectives: positive factors exist in the market, and today’s rise is powerful proof of that. Next, the market’s focus is on next Tuesday’s major meeting. This is a crucial time window. I will share more views with everyone.