TGA Balance Decrease, Increased Liquidity Supply

This is interpreted as a signal that the Federal Reserve is supplying liquidity to the market through Treasury purchases (buybacks). The market expects these policy actions to have a positive impact, contrasting with the current sell-off.

Experts predict that a performance-driven market is highly likely to begin in earnest from October, after late September. Analysis suggests that stock prices could rise even faster if the trend of interest rate cuts is maintained. Nasdaq, in particular, is expected to maintain its upward trend, securing downside rigidity based on solid earnings.

By the end of December, there is a 40% probability that the interest rate target will close at 4.2% to 4.5%. Unlike past divided votes, this decision was unanimous, demonstrating strong consensus on tackling inflation.

Experts analyzed that this stance suggests the possibility of prolonged high interest rates.

Some market participants interpret the Fed's interest rate hikes as evidence of a very robust U.S. economy. Corporate profit and revenue growth are offsetting the burden of interest rates, and the strong earnings generation capability of hyperscale companies supports this analysis. The view was also raised that interest rate hikes would not significantly impact the market.

He particularly emphasized the importance of the earnings season to be announced after October, adding that among inflation indicators, focus should be primarily on oil prices.

A Morgan Stanley trader warned that chasing the stock market at this point could be a misguided decision. Despite a short-term market rebound, the possibility of further declines was raised, and technical analysis indicators suggested a two-week period of potential stock price drops. Historically weak market patterns in September and concerns about oversupply also support a cautious outlook.

Investment experts recommended selling long-term bonds due to the risk of losses during interest rate hikes and expressed a preference for dividend stocks and ETFs with low dividend propensity and secured stability. This is interpreted as an investment strategy aiming for stable returns in a high-interest rate environment.

This was followed by energy (46%), healthcare (23%), and utilities (22%) in terms of preference. It was also predicted that the energy and utility sectors would see essential co-growth with the expansion of the AI industry. Institutional investors appear to be focusing on sectors that can defend earnings even during periods of interest rate hikes.

It emphasized that the current interest rate hike trend is less aggressive and slower than in the past. While valuation concerns exist, it predicted that stock prices would trend upward based on solid earnings.

Concurrently, it strongly recommended investment in IT and information technology sectors. Conversely, it projected poor performance for the financial and consumer goods sectors and advised a cautious approach to these industries.

There is also an analysis that Bitcoin reacted positively when the money supply growth rate exceeded 4%. However, given Bitcoin's high price volatility, a 1% investment in a portfolio increases total risk by 2%, and a 4% investment results in 14% risk, so investments of less than 5% are recommended due to increased risk.

Cloudflare showed higher growth rates compared to major competitors like CrowdStrike (26%) and Zscaler (25%). In particular, its growth is expected to accelerate further with new AI-related businesses.

This is considered a significantly high level compared to other stocks. Despite high growth rates, caution is needed regarding overvaluation, and the possibility of being the first to be sold off if the overall market index declines is also raised.

Some on Wall Street expressed that the positive reaction to Generac's recent announcement was excessive. Criticisms pointed out that valuing the company at 15 times its annual revenue of $1.2 billion is an aggressive level. Controversies over overvaluation due to a 30% surge in after-hours stock price and risks of resistance from state and local communities also exist.

Illumina has endured several difficult years. It faced fines from the failed Grail acquisition, a sharp drop in stock price, and $65 million in losses due to China's export ban. However, its Q2 revenue hit $1.16 billion, a 9.5% increase year-over-year, signaling financial recovery. Despite struggling through complex M&A issues, it is now seeking opportunities for a rebound.