QCP: Short-term Outlook Expects Continued Pressure on All Risk Assets, Market Sentiment Remains Gloomy

On April 2nd, QCP released its daily market observation, stating that "Trump is about to announce a series of tariff measures in the Rose Garden. In the short term, we anticipate that all risk assets will continue to be under pressure. Nevertheless, as the new situation gradually stabilizes, we might witness some 'non-US exceptionalism.' Even if the United States may become marginalized due to policy choices, global stock indices may still continue to reach new highs." The market anticipates that the Fed will cut interest rates by 2.5 times by 2025. The Fed is facing challenges. Weak consumer confidence and soft data suggest the possibility of a slowdown in US GDP growth in the second quarter. Meanwhile, inflation pressures triggered by tariffs may gradually intensify starting from April 2nd. In a classic stagflation environment, the Fed is more inclined to raise rates rather than cut them. In the current situation, the Fed appears to adopt a wait-and-see attitude. Regarding cryptocurrencies, market sentiment remains gloomy. Bitcoin continues to fluctuate without a clear direction, while Ethereum remains above the $1800 support level. Overall, the crypto market shows signs of weakness. Many cryptocurrencies have dropped by 90% since the beginning of the year, and some coins have fallen by more than 30% in the past week. Unless there is a significant change in the macroeconomic situation or a strong catalyst emerges, we do not expect the market to undergo a substantial reversal. Although light positions may support slight gains, we will not chase any uptrend until there is an improvement in the macro environment.