Transcription
The Fed maintained interest rates, but it was one of the most divided decisions in years. Such a division caused the US stock market to fall sharply last night. The Dow Jones was down approximately 1,100 points, marking the worst day since April 2025. The S&P 500 fell 1.5%, and the Nasdaq was down approximately 1.74%. It is worth watching how interest rates will be maintained at a time of such division and when inflation is actually higher than the target. What will be the next direction? The Korean stock market was also highly volatile today after the US market, specifically the Dow Jones, fell by 1,000 points last night, with the rest also in negative territory. Yesterday, the Korean stock market fell 8% in one week. The KOSPI of South Korea fell by approximately -20%, which is considered a bear market. In just one month, it has fallen by approximately 35%. Our goal is to help this channel reach 1 million subscribers. Please subscribe. We now have YouTube Membership. By subscribing, you will receive exclusive content and seminars from PRP and Team Business Tomorrow. Let's analyze the Fed's meeting, which concluded just a few hours ago. This time, the Fed maintained interest rates, but it was one of the most divided decisions in years. The Fed kept interest rates at 3.5-3.75%. However, the meeting had the most significant disagreement in years, with 3 committee members voting against maintaining rates and voting to raise them. The three members who voted to raise interest rates were Thomas Barkin, President of the Richmond Fed; Raphael Bostic, President of the Atlanta Fed; and Lori Logan, President of the Dallas Fed. All three, who voted to raise interest rates, believe that inflation has remained above the Fed's 2% target for more than 5 consecutive years, and therefore, monetary policy should be tightened. The Fed's decision to maintain interest rates this time was generally in line with market expectations. However, it is worth watching how interest rates will be maintained at a time of such division and when inflation is actually higher than the target. What will be the next direction? The statement this time was not significantly different from the previous one; it did not provide new signals about the direction of the next meeting. The Fed's overall assessment of the economy is that the US economy is expanding strongly, despite facing uncertainties regarding the conflict in the Middle East. Market reports are strong; employment growth is consistent with labor supply, and the unemployment rate has barely changed. The Fed reiterated its previous goal of prioritizing price stability as its most important mission. The view from Goz is that the fact that 3 Fed committee members voted to raise interest rates may reflect that this set of Fed members is beginning to lose patience with inflation remaining above the target. Price pressures stem from various factors, including Trump's import tariffs and higher energy prices due to the conflict in the Middle East. Now, we need to observe the market's reaction to how it responds after the Fed maintained interest rates with such a significant division. The US stock market fell sharply last night. The Dow Jones was down approximately 1,100 points, marking the worst day since April 2025. The S&P 500 fell 1.5%, and the Nasdaq was down approximately 1.74%. What is interesting is that the yield on US Treasury bonds surged. The 10-year yield rose to approximately 4.67%, and the yield on 30-year bonds rose by approximately 10 basis points above 5.2%, reaching its highest level since 2007. This is an interesting signal that the market may not fully believe this decision to maintain interest rates, or not. The rising yields and the falling stock market suggest this. If the Fed's decision this time was to raise interest rates as expected, the market might have reacted positively. However, the direction thereafter is likely to be favorable. It is believed that the Fed can control inflation and that aggressive interest rate hikes will not occur. But since interest rates were not raised, and last night the Fed reiterated its commitment to controlling inflation but did not raise rates, the risk or concern about interest rate hikes continues to persist. Even if it's not to the point of being behind the curve or raising rates after inflation, it's not a leading signal, not proactive. Therefore, with the risk in the Middle East, the possibility of a big rate hike, a 0.5% increase all at once, is still something the market fears. When the market fears this, market sentiment will be poor; there will be adjustments, stock selling, gold falling, and bond yields soaring. The signals from here on are not good. Therefore, for investments in stocks that have risen significantly and are expensive, such as tech stocks related to AI, which were previously considered a bottleneck, P' Nanthana said they have already burst and are unlikely to recover. Therefore, it is a time for rotation rather than continued growth. AI will continue to advance, and tech will continue to advance, but not the same old stocks. The rotation will move more towards hyper-scalers. Regarding the outlook for gold, it is said that the picture is not good. At a time when interest rates are expected to rise, and potentially rise sharply, interest rates will certainly put pressure on gold. Therefore, do not buy gold; if you have it, sell it. However, P' Nanthana's current view is that there is no gold holding. Gold is viewed negatively. To start a new upward cycle for gold, the first Fed rate hike or the period close to the full rate hike will be the opportune moment to buy gold. This moment is not it. Finally, when asked what to buy or invest in now, at a time when interest rates may rise in the future and there may be conditions that lead to special events or financial crises, for P' Nanthana, there are three things. First, high-quality bonds with short maturities, specifically short-term bonds. The proportion in the portfolio should not exceed 30%. Second, Chinese and Thai stocks. Chinese stocks are AI-enabled and have many new technologies. On the Thai stock side, a strong political environment leads to better freedom, and upcoming reforms will make both countries representatives of structural investment changes. P' Nanthana remains focused on these three themes. What we will update at the end is the atmosphere of the Korean stock market, which has now adjusted downwards. The Korean stock market is highly volatile today after the US market, specifically the Dow Jones, fell by 1,000 points last night, with the rest also in negative territory. Korea opened today with a recovery of approximately 5% but ultimately turned negative again, around -0.7%. Yesterday, the Korean stock market fell 8% in one week. The KOSPI of South Korea fell by approximately -20%, which is considered a bear market. In just one month, it has fallen by approximately 35%. Yesterday's sharp decline was due to the performance of the giant chip company SK Hynix. Although its financial results were strong, expectations for future growth and uncertainty about the investment plans of major hedge funds, whether they will continue or have reached their peak, caused the stock to fall. Yesterday, SK Hynix stock fell, and Samsung stock also fell by approximately -7-8%. These two stocks account for more than 50% of the market capitalization in the Korean stock market. This is a situation that is highly worth watching. P' Nanthana said that the current uncertainty in the South Korean stock market may be approaching a buying opportunity. However, the answer is that we have to wait and see whether interest rates will change in the future, whether global conditions will change, and whether the current low prices will rebound to their previous levels. These are still questions that await answers from global developments, including AI, the performance of major companies, and the direction of Fed interest rates, which are indicators of global liquidity in money and capital markets. Our goal is to help this channel reach 1 million subscribers. Please subscribe. We now have YouTube Membership. By subscribing, you will receive exclusive content and seminars from PRP and Team Business Tomorrow.