QCP Capital: Risk assets are about to rebound, and the hype of popular Meme coins has led to some bubbles in the market

QCP Capital wrote: "Chinese stocks continued to fall today, with the China A50 Index falling another 7% today and 17% from its recent highs. The lack of fiscal stimulus has severely hit investor sentiment. However, the US stock market has not been affected by the developments in Asia. Despite the uncertainty of the US election and the exclusion of interest rate cuts in 2024 after the non-farm payrolls report, US stocks have continued to climb to new highs. The bond market currently expects 2 interest rate cuts in 2024, compared with 3 interest rate cuts just a week ago. Despite the turmoil in the Middle East and the growing domestic challenges related to the US election, the US stock market continues to climb steadily, which once again confirms its view that risk assets are about to rebound. In the cryptocurrency market, the Meme coin market was observed to soar with the increase in on-chain and off-chain trading activities. Traders used the latest popular Meme coins to hype and leverage, causing some bubbles in the market. The perpetual contract funding rates on exchanges such as Deribit and Binance have also risen in the past two weeks, indicating that short positions are decreasing or long positions are increasing. This is consistent with the Meme Together with the bubble in the cryptocurrency market, it makes them alert to possible downward movements, because this often happens when the market is bullish and investors are least prepared.”