the rhythm of economic turmoil: global markets in the vortex of "recession trade"

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this year, the global economic environment has changed rapidly, and the changes in the central bank's monetary policy have made it difficult for the market to predict. from the bank of japan's unexpected interest rate hike in july and the shift in japan's monetary policy it indicated, to concerns about the us recession trade, to geopolitical turmoil and interference from elections in many countries, the market has jumped back and forth between "rate cut trades" and "recession trades", making it difficult for people to predict the future.

for example, the bank of japan suddenly released a "hawkish" policy, which led to the appreciation of the yen and triggered the unwinding of yen carry trades. this change directly affected the global market, from the stock market to the bond market and the foreign exchange market, all of which experienced violent fluctuations. the market was once in a panic, and investors sold their assets in search of safe havens.

expectations for a u.s. recession are also growing, and market concerns about the fed cutting interest rates too late are becoming more pronounced. u.s. nonfarm payrolls again fell short of expectations, pushing the market back into "recession trading" mode, with the s&p 500 and nasdaq recording their worst weekly performance since march 2023 and march 2022, respectively, and the chicago board options exchange volatility index (vix) rising to 22.38.

nikkei 225 futures fell by more than 5% at one point, almost taking over the baton of the turmoil in the us stock market again. the decline narrowed later, but still showed concerns about the economic outlook. commodities also fell across the board, and market sentiment was depressed.

however, these fluctuations are not meaningless, they reflect the market's suspicion and anxiety about the future trend of economic development. people have to face reality, acknowledge the complexity of the economic environment, and constantly adjust their strategies.

ultimately, it takes time for the market to digest the information and find a new equilibrium. although the economic environment is challenging, we still believe in the power of the market and believe that rational analysis and a positive and optimistic attitude can help people succeed in the future.