BTS
12-19 03:04

The Santa Claus rally may be in doubt this year as tightening monetary policies and global liquidity concerns threaten to dampen the typical year-end market boost。。。

A potential Bank of Japan (BOJ) rate hike could exacerbate worries about rising borrowing costs and inflation, adding further pressure on global risk assets

By draining liquidity and tightening financial conditions, such a move may deepen the market downturn, particularly affecting risk-sensitive assets like equities and emerging market bonds

As the year draws to a close, investors face a tough choice between staying in cash waiting for a pullback for protection against volatility, or remaining fully invested and riding out the drawdown for potential long-term growth

In these uncertain times, alignment of strategy with individual risk profiles and the broader economic outlook is essential to navigate current market challenges

Tag :@Huat99  @Snowwhite  

Santa Rally in Doubt? Will BOJ Rate Hike Deepen Market Downturn?

@Tiger_comments：
U.S. November employment data released on Tuesday showed the unemployment rate unexpectedly rising to 4.6%. While still relatively low by historical standards, it marks the highest level since early 2021. Data from the University of Michigan indicate that as of November, most consumers expect unemployment to continue rising over the next year. According to Morgan Stanley, if this week’s U.S. labor data show moderate softness, it could increase the probability of further Federal Reserve rate cuts, which would be supportive for equities. “We are firmly back in the ‘good news is bad news, bad news is good news’ regime,” Wilson wrote in a note. He explained that while a strong labor market is positive for the economy, it reduces the likelihood of rate cuts in 2026. Against the backdrop of softer employment data, $CME Bitcoin - main 2512(BTCmain)$ rebounded modestly. However, a heavy slate of macroeconomic data will continue to influence markets this week. On December 18–19, 2025, the Bank of Japan is expected to raise its policy rate from 0.5% to 0.75%, the highest level since 1995, sending the strongest tightening signal in three decades. Image Historically, every BOJ rate hike has been followed by a period of correction in U.S. equities. With U.S. stocks currently at record highs, this does not necessarily mean history will repeat itself—but a cautious stance is certainly warranted. Citi strategists, however, remain optimistic, forecasting $S&P 500(.SPX)$ to rise 12% to 7,700 by the end of 2026. The core drivers behind this outlook are strong earnings growth and an overall supportive Federal Reserve policy backdrop. Will the Santa Claus rally still arrive? Will a BOJ rate hike once again drain global liquidity and trigger a correction? Are you staying in cash waiting for a pullback, or fully invested and riding out the drawdown? Leave your comments to win tiger coins~
Santa Rally in Doubt? Will BOJ Rate Hike Deepen Market Downturn?

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  • zookie
    ·12-19 16:53
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    Stay nimble lah, market volatility requires dynamic hedging strategies [看跌][吃瓜]
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    • BTS: 
      [smile]
      12-20 10:03
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