1. Expected effects of interest rate adjustments
The Federal Reserve is expected to cut interest rates twice this year, driven by the overall economic cycle. The high interest rate environment will not last long, and once interest rate cuts begin, they may last for 2-3 years. Interest rate cuts will bring about a drop in capital costs, thereby promoting market liquidity.
The most likely time for a rate cut is June, and it may be implemented in September at the latest. There is usually a delay in the market's reaction to news of interest rate cuts. The market may have a brief adverse reaction after the initial news is announced, but then the trend will change substantially. If interest rates are cut in September, the market may experience an upward trend before then, which is expected to begin in July. In the same way, if interest rates are cut in June, the market may start as early as May.
2. Market fluctuations caused by reduced production
According to historical data analysis, the market often performs poorly in production reduction months, but there are usually significant market fluctuations before and after production reduction events. If the market performance before the production cut was sluggish, then the production cut may be an ideal entry point.
On the contrary, if the market rebounds significantly before production cuts, short-term investors may consider temporarily leaving the market and waiting for better investment opportunities. Within one to two months after the production cut, the market is expected to gradually recover and then enter a better market stage.
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