Taiwanese Stocks Defy US Debt Trend: Buy or Sell? Experts Weigh In

Today’s Hottest Topics on Taiwan Stocks in the Social Community

“Buy bonds slowly following the cycle of interest rate cuts… What you buy when you look at the red is…”, Lao Bao said interest rate cuts are the selling point . friends.” “484 There are many debt frogs who secretly waived their debts to buy TSMC … .cc”, “Zhejiang seems to have said that the US debt injection is down”, “If you drop two numbers and make a mistake, the difference between true and false is 100, do you still have to make a mistake?”

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The hot topic among PTT netizens today is the rebound in US bond yields after the interest rate cut. Photo/taken from PTT

“Why are US bonds so low today?”, “Excuse me, what are you talking about now?”, “No matter how many points it will fall, it will fall, which will help fund flow to the stock market and recessionary interest rate stocks.” “Is it time to start killing bonds all the time”, “We have given up on US debt for a long time. rate cuts are even more aggressive, and Taiwanese stocks are preparing to break their highs previous.”

As for the hot topic among netizens…experts say this!

After US Federal Reserve (Fed) Chairman Powell announced a 2-point interest rate cut, the 10-year US Treasury bond yield rebounded for three consecutive trading days, reaching 3.734%, causing netizens to discuss “Is it buying point or selling point?” In this regard, Yun Huang Zidong, trading manager of Datou Consulting, said that interest rate cuts are usually considered a buying point for the stock market in the early stages, especially since it is the first interest rate cut in the United States. States in four years, and its positive effect can last for about half a year. However, if after half a year of continuous interest rate cuts, the stock market lacks enough support, the buy point of interest rate cuts may turn into a sell point.

Huang Zidong pointed out that the impact of this interest rate cut on long-term bonds is limited because the market has already expected an interest rate cut in advance, and the rebound in yields only reflects this expectation. Despite the correction in US bond prices, the overall bullish structure has not changed.

He also emphasized that the adjustment in US bond prices does not necessarily mean that Taiwanese stocks will rise accordingly. Bond investors and stock investors have different capital flows and ideas The strong trend of Taiwan stocks is mainly supported by their own themes. Recently, Taiwanese stocks have outperformed US stocks, mainly because topics such as TSMC’s supply chain (2330) and folding mobile phones have explosive potential in the market.

Huang Zidong reminded that investors should pay attention to the upcoming US presidential election and the Federal Reserve’s interest rate decision-making meeting on November 5. If the November meeting does not cut interest rates again, investors do not need to overreact , because this interest rate is just a correction, and the market will eventually The target is still around 3 to 4 yards.

As news of interest rate cuts emerged, long-term US bond ETF prices fell in early trading today For example, “Yanta US Bond 20 Years” (00679B) fell 1.13%, “Cathay US Bonds 20 Years”. (00687B) fell 1.21%, and “Kaitai US Bonds 20 Years” (00687B) fell 1.21%.