Source: Bloomberg

Author: Lu Wang, Isabelle Lee

Recently, the trend of the financial market has begun to become like a roller coaster. People are always urgent to respond to emergencies, but if they really do so, they will make mistakes.

It is still in the early stage, and the situation may change when financial pressure is intensified.However, in view of the banking crisis, the economic recession caused by credit, the central bank's policy steering, and economic stagnation warnings, so far the best trading strategy, especially for the US stock market, should be "lying flat".

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The S & P 500 Index has just ended in the second consecutive week. U.S. Treasury bonds have caused a heavy blow to shorts, but if patiently survives the largest volatility in this period of forty years, you should have a generous return.

Insight Investments, an investment expert head, April Larusse, said that the implementation of proof to discard noise is the standard investment proposal.When you face many uncertain factors, the most wise way is to sit down to collect information and analyze it. Don't rush to make big changes."

To achieve this, it is necessary to maintain extraordinary calmness.In the past few weeks, the theme of the market has changed from "non -landing" to the banking crisis, economic recession, technological stocks rebounding, and so on.

Marko Kolanovic, chief global market strategist at JP Morgan Chase, quoted Lenin's words in a report that "has experienced things that had not been encountered in the past few decades in the past few decades."

At present, the bulls are enjoying the elasticity of US stocks. It is expected that the Fed will soon suspend the radical anti -inflation operation, while regulators such as the Minister of Finance can curb any financial impact.The S & P 500 Index has risen 1.4%in the past five days, which has been wiped out for almost two weeks ago that the regional banks have fallen all day before the plunge.The Nasdaq 100 index rose for the third consecutive week, about 5%higher than the level before the crisis.

The shortness quickly noticed that similar situations appeared in 2008. At that time, the Lehman incident caused extremely turbulent market turbulence, but the benchmark stock indexes were closed in a flat disk one week later.At present, US stocks are closer to the lows of last year rather than high.

Of course, no one has a firm view of the influence of the banking industry's turbulence, including the Federal Reserve's decision makers.Although almost everyone, including the Federal Reserve Chairman Powell, predicts that the crisis will lead to tightening financial conditions, they lack consensus on the exact range of losses.Many people try to quantify the impact of turbulence in the loan market on monetary policy. The estimated value ranges from equivalent to 50 base points to 150 base points.

It is the same when measured the impact on standard economic indicators.Citi Group strategists predict the banking crisis on the grounds of the company's credit card consumption data on the grounds that the company's credit card consumption data has suppressed consumers' needs.According to a report made by Morgan Chase and Bank of America economists, the credit card users of these two banks remain active.

"The Federal Reserve has improved the temperature, and now the water is boiling, we will see some frogs start to die," said, George Cipolloni, the investment group manager of Penn Mutual Asset Management."As long as the Fed maintains this temperature at a certain level, there is a possibility of more bank failure in this cycle. This is one of the reasons why Yellen and others respond to deposit guarantees."

Although there are differences in opinions in the investment community, the degree of differences will rarely be so large.According to the data compiled by Bloomberg, the market's highest and minimum predictions on the target level of the S & P 500 index at the end of the year are 47%, the largest in the same period of 20 years.

The fixed income market has not reached consensus.Although Powell insisted that interest rate cuts were not his "baseline prediction" on Wednesday, bond traders still bet that the Fed will change the string this year.The exchange rate linked to the Federal Reserve's period shows that the total interest rate reduction will reach about 1 percentage point before the end of the year.

The changing views of the economy and the Federal Reserve have caused unprecedented turbulence in the US bond market.As of Thursday, the 11th consecutive trading day of US Treasury bonds fluctuated more than 10 basis points, which has never happened since 1981.For these 14 days, 7 days rose, 4 days fell, and the short and long days were not good.

Research Affiliates Strategy Chief Investor Que Nguyen said investors are best prepared for the future bumps.

"In most cases, when you encounter debt or liquidity problems, it will not disappear within two weeks," she said."At the end of the affairs, the market will return to stability. We are still in such a huge fluctuation, which shows that the matter is not over yet."