The divergence between the US CPI and the non-farm payrolls data in June has led to the market being unable to form a consensus on the number of interest rate cuts, and can only "wait and see". Nvidia's market capitalization once ranked first in the world and became the pride of the AI era. However, the U.S. stock market is seriously differentiated, the price-earnings ratio is high, and the bubble has appeared. The crypto market fell for no reason this month, and the sell-off of old OG and miners may be the direct cause of the decline, which also provides new opportunities for follow-up investment.

The latest FOMC meeting in June came to a close, and the meeting decided to maintain the federal funds rate between 5.25% and 5.50%, which was in line with market expectations. However, the overall attitude of this FOMC meeting was dovish, a departure from the previous hawkish stance. In the meeting statement, Powell believed that the current inflation has made "moderate progress" towards the 2% target. Indeed, the latest CPI data for May showed that the year-on-year CPI growth was 3.3%, slightly lower than the previous and expected value of 3.4%; the core CPI, which excludes food and energy costs, increased by 3.4% year-on-year in May, lower than the expected 3.5% and the previous value of 3.6%, reaching the lowest level in over three years.

However, despite the good inflation data, the performance of non-farm data has cast a shadow over rate cuts. In May, US non-farm employment increased by 272,000 (expected 185,000, previous value 175,000), which is higher than the expectations of Wall Street analysts. The deviation between inflation and employment data has made it difficult for the market to form a consensus on the timing and frequency of rate cuts. The FedWatch Tool shows that the probability of the first rate cut in September is only 56.3%.

However, the dot matrix shows that 11 committee members believe that the interest rate will remain above 5% this year, which means that it can be lowered at most once; 8 committee members believe that it can be reduced to 4.75%-5%, which means it can be lowered twice. Therefore, there is currently no clear consensus on the number and extent of interest rate cuts, and we can only "wait and see".

From a trading perspective, the market seems to have started betting on a rate cut by the Federal Reserve. US bond yields have been declining in recent months.

And the gold price is also showing a high-level sideways trend, which seems to indicate that the risk preference of funds is gradually increasing, and the attractiveness of safe-haven assets to funds is gradually dropping.

Now, US inflation seems to be heading in the right direction. The latest Markit Manufacturing PMI for the US is 51.7 (expected 51.0, previous value 51.3); the GDPNow model from the Atlanta Federal Reserve Bank shows that the GDP growth rate for the second quarter of 2024 is expected to be 3.0%. Therefore, WealthBee believes that investors do not need to worry too much about the US economy, just wait calmly for inflation to fall and the Fed to cut interest rates.

On June 18, Nvidia (NVDA) stock rose by 3.51%, reaching a market capitalization of 333.53 billion dollars, surpassing Microsoft and Apple, and becoming the world's largest company by market capitalization. It has been less than two weeks since Nvidia's market capitalization surpassed Apple on June 5, becoming a member of the 3 trillion dollar market capitalization club. There is no doubt that in this narrative of disruptive AI transformation, Nvidia has undoubtedly reaped the benefits and become the pride of the times voted with real gold and silver by the market.

However, after briefly taking the world's number one spot, Huang Renxun began to reduce holdings and cash out, and the stock price also pulled back. Currently, it ranks third in the world after Microsoft and Apple.

The Federal Reserve has been reluctant to cut interest rates, but US stocks have repeatedly hit new highs. The powerful momentum brought by AI storytelling is leading US stocks to break free from the macro cycle and enter an independent market. This month, the Nasdaq and S&P 500 continue to hit new highs, while the Dow Jones is in a sideways trend at a high level.

Since the beginning of the year, the talk of the "stock market bubble" has been getting louder and louder, but the stock market has continued to hit new highs. If WealthBee analyzes from the perspective of the P/E ratio, although the P/E ratio of the S&P 500 has been rising over the past year and is close to the 80th percentile since the 21st century, it is still much lower compared to the P/E ratio around 2002 when the internet bubble burst. Therefore, it can be said that the bubble does exist, but it is not so serious.

However, this month the difference between the return rate of the S&P 500 index and the breadth indicator reached a 30-year extreme. That is to say, although the index has repeatedly hit new highs, the number of rising stocks has been decreasing. This indicates that all the market funds are concentrated in large-weighted stocks, and small-cap stocks are almost "ignored". This phenomenon is not conducive to the overall liquidity of the US stock market, and institutional clustering may cause the decline of the clustered stocks to lead to a big dump in the entire market. Therefore, the current US stock market risks exist and are obvious. WealthBee believes that it may be necessary to wait for the second quarter financial report of Nvidia's fiscal year 2025 to see if Nvidia can continue to exceed market expectations and be affected by changes in interest rate expectations. At that time, the style of the US stock market may undergo some changes.

In addition to U.S. stocks, the Asia-Pacific market has once again performed well this month, with the Mumbai SENSEX approaching 80,000 points and the Taiwan Weighted Index reaching a new historical high. Despite the yen exchange rate falling below 160, the Nikkei 225 has been trading sideways at high levels, showing strong performance.

The U.S. stock market reached a new high, but the cryptocurrency market inexplicably declined. This month, despite no apparent macroeconomic unfavourable information, the cryptocurrency market has been consistently falling, with Bitcoin falling below $58,500 and Ethereum falling to around $3,240.

In fact, the macro situation in June was not bad, and the Fed's remarks have turned dovish. However, the volatility in the financial markets is often difficult to explain. According to the monitoring data from HODL15Capital, the US spot Bitcoin ETF saw a net inflow of 9281 BTC in June, indicating a net inflow of Bitcoin spot ETFs, but the market trend is contrary to the behavior of major institutions.

At the moment, the direct cause of the market's decline is the sell-off of old OGs and miners (miners and whales, for example, who have already sold $4.1 billion). As for why the concentrated sell-off during this time, this is most likely "getting together for no reason".

From another perspective, the emergence of a large number of financial instruments in the Bitcoin market has also greatly increased market fluctuations. Since the introduction of Bitcoin futures trading in 2017, increasingly complex financial derivatives have continued to emerge. Without futures trading, everyone freely trading spot in the market, other than miners producing new bitcoins leading to an increase in supply, all other transactions are neutral. The emergence of futures has led to the appearance of naked short selling in the market, leading to a large number of 'paper BTC' and thus increasing market supply, exacerbating the fluctuation of Bitcoin prices. Spot, futures, options, and other financial instruments are intertwined, making the overall fluctuation of the Bitcoin market more and more chaotic, and the pure and beautiful 'classical era' of Bitcoin is gone and will not return.

Since there is no obvious risk, the probability of a decline is probably a good time to increase the position, and the whale's selling also provides an opportunity for other investors to get on board at a low price.

Moreover, the increasing diversification of financial instruments is precisely the key path for the encryption market to gradually enter the public's vision. Just this month, the encryption market has received two important pieces of information. First, the arrival of the Ethereum spot ETF may be faster than expected, and it may be approved as early as early July. Bloomberg ETF analyst Eric Balchunas expects that the Ethereum spot ETF will be approved as early as July 2nd.

In addition, on June 27th, Matthew Sigel, VanEck's director of digital asset research, stated that they have applied for a Solana ETF with the SEC and may launch it in 2025.

From Bitcoin to Ethereum, and then from Ethereum to Solana, encrypted assets are being adopted by traditional markets at an unexpected rate, and the resulting incremental funds may be immeasurable.

Despite the unexpected cooling of inflation in the June CPI data in the United States, the strong performance of non-farm data has made the market's expectation of a rate cut by the Fed more complicated. In addition, the divergence between CPI and non-farm data, as well as the rate cut measures already taken by Europe, further intensify the differentiation of global monetary policies. In the stock market, the violent fluctuations of Nvidia's market capitalization and the divergence of large and small-cap stocks in the US reflect the differentiation of the prospects of AI technology, and also expose the increasing concentration of the market.

This month, the price of Bitcoin in the cryptocurrency market has dropped significantly to below $60,000, decoupling from the trend of the US stock market, possibly related to the selling behavior of miners and long-term holders. The market's volatility has increased, partly due to the emergence of complex financial derivatives related to Bitcoin. Nevertheless, the launch of spot ETFs is seen as a stabilizer for the market, providing hedging tools for investors. In particular, the expected launch of the Ethereum spot ETF in early July is anticipated to bring new vitality and stability to the market. Despite the uncertainty in the macroeconomy and traditional financial markets, the crypto asset market has demonstrated its independence and resilience, expected to play an increasingly important role in diversified investment portfolios, offering investors new growth opportunities.