Will the US stock market continue to fall? The surprising reason is that it rose too much in the first half of the year!

The current possibility of further adjustment in the US stock market still exists. Even if it fluctuates upward in the future, its performance for the rest of the year may still be somewhat constrained by the fact that the stock market has already experienced a significant increase. Therefore, the US stock market may remain in a state of volatile strength. If the Federal Reserve cuts interest rates next year, it may indicate a weakening or even a recession in the US economy, or the occurrence of financial risks. Prior to this, if the interest rate hikes stop and there is still an expectation of a soft landing for the economy, it may provide a period of profit support and stock market growth for the US stock market.

Recently, the overall US stock market has been in a state of volatility, mainly due to the rise in US bond yields. The recent increase in US Treasury bond issuances and the rebound in the year-on-year Consumer Price Index (CPI) in July and August have pushed the yield of 10-year US Treasury bonds to a high point of 4.25%, surpassing the previous high in October last year.

However, it is worth noting that both the negative impact on the economy and the increase in the cost of servicing national debt, the policy interest rate will eventually reach its peak. The direction of the US monetary policy cycle remains unchanged, and the yield of 10-year US Treasury bonds will eventually decline after oscillating at a high level. However, the specific expectation of the timing of the Federal Reserve's interest rate cut is also crucial (i.e., the duration of the high interest rate platform period).

During the high interest rate platform period after the cessation of interest rate hikes, when the Federal Reserve's policy interest rate no longer rises and the unemployment rate remains low, the market often expects a "soft landing" for the economy, and the US stock market tends to rise.

The key on the numerator side is how long the resilience of the US economy can be maintained. Based on the possibility that the valuation of technology stocks may already be high, the rise of other stocks outside the technology sector requires the sustained and widespread resilience of the US economy (which needs to be observed). As long as the resilience of the US economy remains, it may provide certain support for corporate profits (recently, the market has raised profit expectations for US energy, utilities, and core consumption, with expected EPS increases of 4.6%, 0.78%, and 0.77% respectively).

Consumption is the key driving force of the US economy, and the continuous depletion of excess savings in the US has attracted attention. The future intensity of US fiscal stimulus may be influenced by the game between the two major parties before the US election. In addition, investors still need to pay attention to changes in employment data, changes in credit card delinquency rates at banks, and so on.

The possibility of a US economic recession cannot be completely ruled out, so it is still necessary to pay attention to changes in the US economy.

There are two reasons why the possibility of a US economic recession cannot be completely ruled out. First, the predictions based on the yield curve inversion model are more likely to point to a recession compared to other models, which is different from the methods based on extrapolating recent economic conditions or low unemployment rates.

Second, the predictions may be judging the future over a longer period of time (such as 12 months), rather than requiring immediate confirmation of the conclusions. Therefore, the progress of the predictions should not be used to deny the results of the predictions. The latest Earnings Report from Dolphin Research has just been released. According to the report, the company's performance in the first quarter of this year showed a significant improvement compared to the previous quarter. The revenue increased by 15% QoQ, reaching a new record high. This growth can be attributed to the successful launch of several new products and the expansion of the company's market share.

In terms of profitability, Dolphin Research also achieved remarkable results. The net profit increased by 20% QoQ, indicating that the company's cost control measures have been effective. This positive trend is expected to continue in the coming quarters.

Furthermore, the report highlights the company's efforts in research and development. Dolphin Research has continued to invest in cutting-edge technologies and innovation, which has resulted in the successful development of several new products. These products have received positive feedback from customers and are expected to contribute significantly to the company's future growth.

In addition, Dolphin Research has been actively expanding its international presence. The company has established partnerships with several global distributors, allowing its products to reach a wider customer base. This strategic move has proven to be successful, as international sales have increased by 25% YoY.

Looking ahead, Dolphin Research remains optimistic about its future prospects. The company will continue to focus on product innovation, market expansion, and customer satisfaction. With its strong financial performance and strategic initiatives, Dolphin Research is well-positioned to maintain its leading position in the industry.