Ark: Liquidity is recovering, laying the foundation for a year-end market Rebound.

Cathie Wood's Ark Invest ( has released its latest investment outlook, believing that market liquidity has bottomed out and is rebounding, with more funds expected to flow back as TGA normalizes. Recent economic data has been weak, and Federal Reserve officials have expressed support for interest rate cuts, setting the stage for a rebound by the end of the year.

Market liquidity has hit bottom and is set to rebound, leading to more capital inflow.

The liquidity in the US market has finally started to rebound after hitting a multi-year low of $5.56 trillion on October 30. A six-week government shutdown resulted in a loss of $621 billion in liquidity, but with the government reopening, $70 billion has already flowed back into the market. At the same time, the Treasury's General Account ) TGA ( remains at $892 billion, while normal levels are around $600 billion, indicating that a large amount of liquidity is still expected to recover. It is anticipated that over the next 5-6 weeks, with the normalization of the TGA, an additional $300 billion will flow back.

Economic data is weak, and Federal Reserve officials have expressed support for interest rate cuts.

The improvement in the liquidity environment coincides with the Federal Reserve's shift to a dovish stance. New York Federal Reserve Bank President John Williams, Fed Governor Christopher Waller, and San Francisco Federal Reserve Bank President Daly have expressed support for interest rate cuts, which has raised the market's implied probability of a rate cut to about 90%.

Recent macro data further confirms the necessity of easing policies. The employment report for September shows that the unemployment rate has risen to 4.44%. ADP data indicates a reduction of 135,000 jobs in the past week, retail sales are weak, and the core Producer Price Index )PPI( is below expectations.

Liquidity is recovering, and the market is reversing the recent downward trend.

As liquidity recovers, the quantitative tightening )QT( will end on December 1st, and monetary policy will also shift to a supportive stance. We believe the market is forming conditions that may reverse the recent downward trend.

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