The end of 2025 is near, but what will come to an end? Market concerned most is that rate cut is going to an end soon. Investors expect there still will be a rate cut next week, but very likely it will be the last cut of this cycle. Let’s refer to the rate cut of December 18th 2024. Do you still remember what was the market sentimental that day? People expected there still would be a cut of 25 points on that day, but henceforward, there would not be any cut at least for 9 to 12 months. It is good news that rate cut still would come, but bad news is that there would not be any cut for 9 to 12 months.
Let’s see what was the response of the market, S&P shown a big black candlestick. Market considered that cut was bad news for there would not be any cut for a long time. But this time, market expect the end of rate cut cycle is near, this might be the last cut of this cycle. So, is it good news or bad news? The Fed chair Powell will step down on coming May, and Trump smiled and said the new chair is fixed. First of all, neglect who he is, it must be a dovish in rate cut, that is the new chair should be in favour of rate cut or else Trump would not nominate him. That means the rate cut will come in June. Investors should have a market diary to put down the major happenings for future reference, can be just in key words or figures. No need to let others know, only you yourself can read them is enough. The more data you keep, the higher the chance of success you are.
Like a musician, pianist, violist or conductor, they have a lot of symbols in the score, no one can read, only they themselves can understand and that’s enough. A smart investor should have a market diary only he can read.