SignalPlus Macro Analysis (20240531): MEME Coin Rises Again

After experiencing a very strong month, the macro market has entered a consolidation mode. Despite weak economic data and rising U.S. Treasury yields, the SPX index rose nearly 3% in May. In the past few days, the U.S. first-quarter GDP was significantly revised down (1.6% --> 1.3%), consumer spending dropped sharply (2.5% --> 2%), and core PCE was also revised down (3.7% --> 3.6%). Meanwhile, China's economic data has also returned to the old path, with the May manufacturing PMI plummeting below 50, significantly lower than market expectations (50.5). Production, demand, new orders, exports, and imports are generally weak, and the Hang Seng Index has quietly fallen 5% from recent highs, remaining basically flat this month.

There is a lack of clear conviction on the macro front, and price movements are mainly driven by month-end rebalancing funds. Commodities and stocks fell sharply yesterday, with the U.S. stock market closing down about 1% on Thursday. Tech stocks such as Dell (-15%), Salesforce (-20%), and even Nvidia (-4%) experienced large-scale sell-offs. Affected by rebalancing funds, tech stocks have fallen nearly 9% compared to the SPX's 3% rise, and technical indicators suggest that the stock market may weaken further in the short term.

In fixed income, as the market suddenly shifts its attention to Trump's possible second presidential term, the U.S. Treasury yield curve has steepened significantly over the past two weeks (from -48 to -38). Although both candidates may pursue loose monetary policies and fiscal expansion plans, bond traders are more concerned about bond supply and inflation under a Trump administration.

Moreover, despite Trump being indicted for falsifying business records and the possibility of imprisonment, a recent ABC/Ipsos poll shows that even if he is convicted, only 4% of his supporters would withdraw their support, while 80% pledged to continue supporting him. This aligns with a previous poll indicating that 94% of voters who supported Trump in 2020 intend to vote for him again in November, demonstrating the extreme loyalty of his supporter base. Regardless of the final outcome, this election is destined to be controversial. The Manhattan court is scheduled to deliver a verdict on July 11, and Trump may appeal any ruling, with no definite timeline for other trials before the election day on November 5.

There isn't much to pay attention to in the cryptocurrency space. This week, ETH outperformed BTC by about 0.8%. ETH's inflows are stable but lack highlights, and the approval date for ETH S-1 remains unknown, with the market consensus suggesting it could be as early as July. Meanwhile, native users have started to shift towards large memecoins like Shiba/Dogecoin and Pepe, which have seen increases of 10-20% amid the recent lackluster market conditions.