April 13, 2025
Catching The Momentum

Market Commentary
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Despite the gain on Friday, U.S. stock indices have experienced notable declines recently. Asian markets mirrored this trend amid investor anxiety over the trade war's implications. 

S&P Performance


Investors have shifted towards safer assets, causing gold prices to surge and raised a risk-off possibility from the equity market as investors awaits for things to cool off.
 
Gold Historical Performance


This tariff retaliation has led to a notable shift in global financial dynamics. In response to aggressive U.S. tariffs, China began reducing its holdings of U.S. Treasury securities—a strategic move aimed at pressuring the US.

This "dumping" of Treasuries increased supply in the market, pushing prices down and yields up. As a result, the yield on the 10-year U.S. Treasury jumped from below 4% to around 4.5%. Higher yields reflect investor concern over strained U.S.-China relations and the potential for deeper financial decoupling, increasing borrowing costs and adding pressure on U.S. financial markets.
 
US 10 Year Treasury Yield

Such high yield is certainly concerning for the US as it may hamper the financial market's growth. Hence, we see that President Trump has the needs to put pressure on Jerome Powell to cut its interest rates soon.
 
CME Target Rate Probability

Investors might want to gradually add more long position on strong fundamental stocks, especially those which are sensitive to interest rates such as the banking sector, TOWR, JSMR, and other stocks which rely heavily on debt.

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