SignalPlus Macroeconomic Analysis Special Edition: Seasonal Caution

The overall market was quiet over the past week, with the U.S. market almost ignoring two of the most anticipated events — Nvidia's earnings report and Friday's PCE data. Although U.S. stocks saw a slight rise earlier in the week amid low Fluctuation, prices ultimately pulled back before the long weekend due to weakness in tech stocks (Nvidia and Dell's earnings reports fell short of expectations). In terms of data, the core PCE inflation in July rose by 0.27% month-on-month and 2.9% year-on-year, in line with expectations, but the "super core" service inflation unexpectedly strengthened, reaching 0.39%. The market is willing to overlook the one-time increase in the financial services sector, keeping government bond yields near recent lows.

This week's focus will be on Friday's Non-Farm Payroll (NFP) report, with the market expecting a total increase in employment of about 45,000 (with 60,000 in the private sector) and an unemployment rate of 4.3%. Given the weak hiring demand, the trend of slowing job growth is expected to continue, with an average of about 50,000 new jobs per month reflecting the reality of an economic slowdown and reduced immigration.

The Federal Reserve has fully turned dovish after the Jackson Hole meeting, leading to a significant pump in precious metals, with gold nearing $4000 and silver breaking $40/ounce for the first time since 2011. Additionally, due to ongoing geopolitical pressures and sticky inflation, the amount of gold held by foreign central banks has surpassed U.S. Treasury bonds for the first time since 1996, and this trend is expected to continue.

In the cryptocurrency sector, despite strong performance from gold, cryptocurrency prices fell last week, and the market bubble seems to have slightly receded, with the DAT premium overall retreating to near long-term lows. New capital inflow appears to have peaked, and a capital rotation phenomenon has emerged, with Solana being the only cryptocurrency to rise this week, and SOL becoming the latest destination for the DAT frenzy, with a significant rebound in total locked value (TVL) on-chain.

Looking ahead, we expect September to be a month of increased overall volatility for risk assets. Over the past decade, the seasonal performance of September has not been favorable for stocks (down), 10-year Treasury yield (rise), and Bitcoin (down). At the same time, the volatility premium is at a cyclical low, while risk leverage is accumulating. Given that the Federal Reserve has "preemptively" signaled its intention to ease, what other cards can be played if risk assets decline in September? It is currently judged to be too early, but with the tricky seasonal period of September to November approaching, we recommend staying cautious. Wishing friends smooth trading and good luck!