Macro Weekly Report: Market trends unclear, US Non-farm Payrolls (NFP) diverging, will the next step be a Rebound or a bottoming out?

1. Macroeconomic Review of This Week

1. Market Overview

Market sentiment remains subdued this week. Although Friday's US Non-farm Payrolls (NFP) data and the Federal Reserve Chair's speech alleviated some concerns about a recession, the uncertain outlook on tariffs offset these positive factors.

In the US stock market, the S&P 500 index has fallen below the 200-day moving average for the first time in 16 months, triggering a large-scale sell-off in CTA strategies. The VIX volatility index remains above 20, and the Put/Call ratio has surpassed 0.9, reflecting a strong sense of panic in the market.

The cryptocurrency market has reacted tepidly to the U.S. strategic reserve policy on crypto assets. The main reason is that the policy details fell short of expectations, and the overall contraction in risk appetite has affected liquidity, leading to a weak rebound in Bitcoin.

The market has not yet formed stable trading expectations, and macro policy uncertainty has suppressed sentiment improvement.

2. Economic Data Analysis

The ISM Manufacturing Index in February continued to expand but at a slower pace, with the new orders index falling below the neutral line and the employment index not meeting expectations. The Non-Manufacturing PMI, on the other hand, exceeded expectations. This indicates:

• Tariff policies have disrupted the manufacturing industry.
• Economic growth is slowing, but the service industry remains relatively robust.

The Atlanta Fed has lowered its first-quarter GDP forecast to -2.4%, primarily due to a drag from net exports, while consumer spending remains stable.

February US Non-farm Payrolls (NFP) data shows:

• The unemployment rate rose slightly to 4.1%
• New jobs added 151,000, below expectations
• Wage growth is limited

The employment data is generally weak but has not deteriorated; companies tend to extend the working hours of existing employees rather than hiring new ones.

3. Federal Reserve Policy and Liquidity

Key points from Federal Reserve Chair Powell's speech:

• Tariff policies are clear, leaning towards a cautious wait-and-see approach.
• Reiterate the 2% inflation target, short-term inflation rise will not prompt interest rate hikes.
• Believe that the economic situation is relatively stable
• If employment continues to slow down, a rate cut may be considered.

The Federal Reserve's balance sheet has risen back above 6 trillion, with marginal improvement in liquidity.

The short-term interest rate market expects a rate cut in the next 6 months, but the 10-year Treasury yield is turning upward, indicating that recession worries have eased.

2. Macroeconomic Outlook for Next Week

The market is still in a period of digesting risk expectations, and the trend is not yet clear. Institutional funds may maintain a cautious wait-and-see attitude.

Suggestions for investors:

• Pay attention to the economic data changes in March-April and wait for clearer trend signals.
• One should not be overly pessimistic and maintain a balanced investment portfolio.
• Consider layout in a reasonable position

Next week, pay attention to key data such as CPI, PPI, and consumer confidence index to assess changes in inflation and consumption trends.