The current round of cyclical stock performance wave is coming to an end, indicating that A-shares are in a bull-bearing turning period, and the bottom plate is mostly a feint to cover the orderly withdrawal of the main funds. It is worth noting that the stock market value of new energy vehicles is already at a historical high, and we must beware of negative effects such as overcapacity and trade frictions between Europe and the United States.
A-share anti-epidemic bonus may come to an end
This round of “anti-epidemic” bull market started at 2646.8 points on March 19 last year. It has been more than 18 months. As of September 29 this year, the Shanghai Composite Index and the Shanghai Composite 50 saw the largest gains of 41% and 41.8%, respectively. Now they have narrowed. To 33.6% and 27%. As the leading indicator of this bull market, the Shanghai Stock Exchange 50 Index fell 22% from the high point this year, and has entered a technical bear market.
Nowadays, the market is chasing supply chain dividend stocks, the concept of commodity price increases is popular, and retail investors are eager to increase trading volume. The countermeasure of cyclical stock speculation is to buy when performance is poor and sell when performance is good. The current round of cyclical stock market is caused by the resonance of the global central bank’s super-printing of money, the obstruction of the supply chain of enterprises, and the involution of the industrial support policies of various countries at the same frequency. China’s power is the engine of world recovery and global “anti-epidemic”, and the dividends enjoyed by the “epidemic” are similar to the US economy during the “World War II” of the last century. This means that the pricing of some products is distorted and the national regulation is difficult.
From a global historical perspective, economic prosperity has brought about a bubble in the stock market, and timely adjustments are feasible and stable. During World War II, the United States enjoyed the dividends of the world’s factories, and its GDP in 1945 accounted for 56% of the world’s total. The S&P 500 rose from a low of 7.47 points in April 1942 to a peak of 19.25 points in May 1946. The PE of the month was 21.7 times. After that, it entered a three-year bear market to kill valuations. It reached the lowest point of 13.55 points in June 1949, and the PE was 5.8 times that month.
New energy vehicle stocks have reached historical highs
Industry regulation is to interrupt the price transmission mechanism, cut peaks and flatten valleys, with the goal of balanced development of the industry, and the industries that are supported take turns to get out of trouble or even become wealthy. At present, Guangdong Province has set a record high for the maximum load demand under the unified regulation, but the local thermal power company claims that it lost 78 cents to a kilowatt-hour of electricity. Electricity companies cut production and caused power outages at home, forcing electricity prices to rise. Why are electricity bills raised cautiously everywhere? As soon as electricity prices rise, the domino effect of price increases is likely to cause stagflation, which forces currency tightening, and there is a risk of a hard economic landing.
This round of industrial regulation has three major backgrounds. One is to use the comparative advantages and cushions brought about by the “anti-epidemic” dividend to release the hidden risks of real estate finance in advance. The second is the restriction on loans in the real estate market, the centralized procurement of medicines, and star tax reimbursements. Many policies have alleviated financial pressures at all levels. The third is to concentrate resources on major tasks and develop emerging industries such as new energy vehicles into national advantageous industries. At present, the use of market means for regulation and control requires more time and space. First, the risk of real estate companies’ redemption has not yet been ruled out, and housing prices in first- and second-tier cities are still rising and falling. Second, the US fiscal payment crisis has just begun, and the global risk spillover remains to be seen. Third, the stock market value of new energy vehicles is already at a historical high, so beware of negative effects such as overcapacity and the trade war between Europe and the United States. In 2010, China’s photovoltaic products sold globally. In March 2012, the US Department of Commerce imposed a countervailing tax rate on Chinese photovoltaic products. After that, the market value of giants such as Suntech and Sunway collapsed.
Uncertainty in domestic regulation and control has increased, and the rotation of the A shareholding sector has accelerated, and the funds on the market are no longer in love with the battle.
Strong cycle varieties are difficult to enter the circle of core asset targets
Drawing on historical experience, A-shares often enter bear markets earlier than US stocks. The CSI 300 peaked in the bull market on February 18 this year, and the S&P 500 peak appeared on September 2.
The latest fuse is that the US finances may reach the debt ceiling before October 18. US Treasury Secretary Yellen said this week that “debt default will be a man-made crisis.” According to his forecast, the US inflation rate at the end of the year will be close to 4%. In the next ten years, the U.S. tax gap will reach 7 trillion U.S. dollars. It can be inferred that if the United States prints money to pay its debts, there is a risk of economic stagnation. If U.S. debt defaults, there will be a balance sheet recession. The reasonable expectation is that Wall Street will use the stock market plunge as a threat in exchange for compromises by all parties in the United States and lift the U.S. debt crisis.
The bearish trend of US stocks during China’s National Day holiday was the main reason for the downturn of the Shanghai Stock Exchange this week, followed by concerns about overweight regulation and cyclical stocks plummeting. Calculated on the basis of the gains during the year as of the 29th, 34 of the SSE 50 sample stocks closed down, and “sad assets” appeared. From the perspective of the leading industries during the year, most of them are low-price + bottom + strong cycle products, such as coal, chemical, mineral products, steel, power and petroleum sectors. The increase during the year is about 60%, 54%, 50%, and 48% respectively. , 42% and 40%. The coal, steel, and oil sector indexes have not yet exceeded their 2007 peaks. They are not a concept of policy support. It is difficult to re-incorporate the core asset concept of “buy-hold” for institutions. Once performance expectations deteriorate, most of them fall back to their original shape.
Judging from historical experience, the sharp rise and fall of international commodities is highly correlated with the expected rise and fall of the US dollar. It is one of the tools Wall Street uses to harvest the US dollar hegemony dividend. As a major importer of raw materials, China’s conventional countermeasures are to take the initiative to cool down the economy and draw a salary from the bottom of the total demand for upstream commodities. According to the latest forecast of the Bank of China Research Institute, China’s economy will be 5% and 4% in the third and fourth quarters respectively. From this point of view, the author expects that “economic slowdown + stock market adjustment” may be the main tone of A-shares in the medium term.