SignalPlus Macro Analysis Special Edition: "The Surge Never Sleeps"

U.S. stocks soared to a new all-time high on Monday, with the Nasdaq index leading the charge (+1.6%) and the S&P 500 index rising by 1%. Optimism in the market regarding a potential new trade agreement between China and the U.S., long positions ahead of the earnings reports of the seven major tech companies, and expectations of a dovish stance from the Fed have collectively boosted risk appetite. As investors quickly return to risk assets, cross-asset volatility has plummeted to near historic lows. Global stock markets may also achieve significant breakthroughs — the Shanghai Composite Index seems to be breaking free from a decade-long downtrend line pressure.

The market has fully priced in a 25 basis point rate cut at this month's and December's Fed meetings. Although U.S. macro data has been almost in a government data vacuum for nearly a month, traders still expect the Fed Chair to release more dovish signals. We anticipate that Powell will suggest that the lack of timely economic data will complicate policy-making, thereby supporting the Fed's previous basic assumption of another rate cut this month, while a prolonged government shutdown could pose additional downside risks to the labor market. Due to the supply of data being interrupted, we expect there will not be too many new policy guidance issued, and the focus will shift to the timing of the end of quantitative tightening — as system liquidity has returned to a “ample” level. Market benchmark predictions show that quantitative tightening will end in the first quarter of 2026, and if Powell announces an early end to the balance sheet reduction, it could trigger a dovish surprise.

Although Bitcoin has rebounded to the range of $115,000, its momentum is clearly weaker than the stock market, with monthly and quarterly trends basically stagnant. As the price stabilizes, BTC's implied volatility has resumed its downward trend, but the volatility skew is tending towards balance — given the large number of long positions liquidated in recent months, some buyers are starting to position for upside risk.

Current cryptocurrency lacks short-term catalysts: DATs (Decentralized Asset Trading) are performing weakly, and ETF inflows are stabilizing after several consecutive quarters of growth. The resurgence of crypto-related IPOs before the end of the year may inject FOMO sentiment into the market, but given the severe gains and losses caused by this month's altcoin crash, price trends may remain relatively flat. At the same time, the actual application momentum of stablecoins continues to strengthen: the payment transaction volume has shown a positive divergence from the spot trading volume, indicating that more funds are entering the blockchain for non-pure speculation purposes.

The Fed's dovish stance and “anti-drop” measures: can they save the disappointing “rising October”? May the fire of hope always burn…!