China is asleep while the world avoids a big dump

Chinese investors can rest assured when they wake up and see the closing.
- The three major US stock indexes rose across the board, with the Dow Jones Industrial Average up 1.2%, the S&P 500 up 1.1%, and the Nasdaq Composite Index up 1%.
- U.S. Treasury bonds rose, and the yield on the 10-year U.S. bond fell to 4.52% (still above the dangerous 4.50% level);
- The US dollar index fell by nearly 0.6%, pulling back from a two-year high, but still rose this week;
- The price of gold has risen sharply, reaching $2620, but it has fallen on a weekly basis.
It's the familiar pattern of "the US dollar falls and everything rises" again. It's obvious that the market trend is related to the Federal Reserve. Last night's market trend was not accidental and not simply market behavior.
1. First of all, the Fed's favored inflation indicator for November, the PCE price index, was "unexpectedly and comprehensively" lower than market expectations, pay attention to the two words in double quotation marks - this is a result that surprised all analysts, so it triggered a sharp feedback from the market. Gold rose in response to the release of the data, while the dollar index fell.
2. Later, several Fed officials appeared on CNBC to urgently rescue the market. Typically, officials from the Federal Reserve or the White House will communicate information to the outside world through CNBC when the stock market is falling.
* Chicago Fed President Evans said in an interview with CNBC that he expects borrowing costs to further decline over the next 12 to 18 months. He still believes that inflation will fall to the Fed's 2% target, which means further rate cuts.
* New York Fed President Williams, the Fed's No. 3 man, said the crucial phrase "current interest rates are quite restrictive", meaning that there is some room for rate cuts – no doubt to show favor to the market.
3. After the above operation, traders have increased their bets on the Fed's rate cut. The market currently expects the first rate cut to be in March next year, and there may be another rate cut in September. Before the data is released, they believed that the probability of a rate cut in September next year was only 50%.
A big dump was avoided, as the global market mostly fell before the opening of the US stock market. It can be said that if the economic data last night met expectations and the Fed did not make a statement, the US stock market could have experienced a '1% decline'. As we mentioned before the opening yesterday, if the US stock market further falls on Friday, it may pose a greater danger to the bullish trend and may trigger a global sell-off.
But the suspense has not been completely resolved. After a calm weekend, there will still be variables.