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Li Daxiao: U.S. inflation fell in May and interest rate hikes were suspended in June. A-shares’ upward breakthrough is gradually approaching. It may be above the annual line today. It has persisted for 15 trading days. Bull volume has come first. Maybe the bull market will come later
On June 15, Li Daxiao, chief economist of Yingda Securities, said that the data released by the US Bureau of Labor Statistics on June 13 showed that the US CPI in May increased by 4% year-on-year, slightly lower than the market expectation of 4.1%, and the previous value was 4.9. %, which is the 11th consecutive month of decline in the year-on-year increase in CPI in the United States since June 2022, when it hit a 40-year peak of 9.1%, and the growth rate hit the lowest level since March 2021.
On June 14 local time, the U.S. Federal Reserve Board concluded its two-day monetary policy meeting and announced that it would maintain the current target range for the federal funds rate of 5% to 5.25%, which was in line with previous market expectations. For the first time since the aggressive rate hike cycle, the “pause button” was pressed.
As of June 14, 2023, the inflow of funds from Beijing to Beijing was 172.4 billion, far exceeding the 80 billion in 2022. Unfortunately, the bottom was stolen by foreign capital.
It has been 15 trading days for A-shares to stick to the annual line and around 3200 points. Recently, the continuous outflow of retail funds and large investors has been observed for many consecutive days. However, the main force and domestic institutions are sweeping up the goods. The equivalent change has accumulated to a certain extent, and the qualitative change is about to occur. A breakout is imminent, an upward breakthrough is imminent, maybe today. Yesterday, the trading volume has exceeded one trillion, and the bullish volume has returned. Generally, the volume comes first, and the bull market may follow.
On October 31, 2022, the Shanghai Composite Index is calculated at 2885 points as the node, and the difference between the implied return rate of the Shanghai Stock Exchange 50 and Yu’e Bao reaches a historical peak of 10.6936%, which is the most solid bottom for blue-chip stocks in 32 years. The 3168 points of the Shanghai Composite Index on May 25 are calculated as nodes, corresponding toSSE 50 IndexThe yield difference with Yu’e Bao is 8.8155%, which is still a historically high level. The attractiveness of blue chip stocks around 3168 points still exists, and the support for important indexes is still strong.
More importantly, as the U.S. inflation data fell more than expected, the adjustment of the Fed’s tightening policy is imminent. Whether the global financial market can look forward to it, while the Japanese stock market has hit a new high in 33 years, the major European stock markets have hit a record high, and the U.S. stock market has hit a record high. The new high in the past year is also a proof. The huge contrast between the downturn in the A-share market and the major global stock markets cannot be maintained for a long time, and a correction is about to occur.
We actually already have stable economic fundamentals at the moment. As China’s economy stabilizes and recovers, the Fed’s interest rate hike is coming to an end, the RMB exchange rate is stable, the inflow of foreign capital is accelerating, and the reservoir of Chinese residents’ savings is getting bigger and bigger. The demand for long-term capital allocation is getting stronger and stronger. The entry of personal pension funds into the market is in the ascendant. The long-term capital allocation of pension funds, social security funds, enterprise annuities, insurance funds, foreign capital, public funds, and private equity funds has just begun. Increase, maintain the balance of investment and financing, the stability of China’s stock market can be expected.
More importantly, China’s economic growth potential is huge. In 2022, China’s GDP will exceed 121 trillion. In the past ten years, China’s economy has grown at an average annual rate of 6.2%, which is much higher than the world average growth rate of 2.6% in the same period. The average contribution rate of growth has reached 38.6%, exceeding the sum of the contribution rates of the G7. In the future, the proportion of China’s economy in the global economy will gradually increase. Economic growth will inevitably promote the focus of high-quality stock markets in the long run. The long-term development of China’s economy has opened up the upside of China’s high-quality assets.
It can be said: suddenly like a spring breeze overnight, thousands of trees and pear trees bloom.
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