The three major indexes fell together, and the Shanghai index was close to 3,000 points. What level has the A-share market adjusted to?
The Shanghai Stock Exchange opens a 3,000-point tug-of-war
In the early morning of May 6, U.S. stocks plummeted, triggering a panicky drop in global stock markets.
Yesterday, the three major A-share indexes collectively opened lower. Among them, the Shanghai Index once fell more than 2% and fell below the 3000-point integer mark, and closed down 2.16% to 3001.56 points; the Shenzhen Component Index and the ChiNext Index fell by 2.14% and 2.14% respectively. 1.9%. The situation in Hong Kong stocks is also not optimistic. The Hang Seng Index closed down more than 3%, and the Hang Seng Technology Index fell by more than 5%. Will the market continue to bottom out in the future?
Ten-year U.S. Treasury yields rise above 3%, U.S. stocks plummet
On Thursday, Eastern Time, the day after the Federal Reserve announced the largest rate hike since 2000, the three major U.S. stock indexes collectively tumbled and erased all their gains this week. Among them, the Dow and the Nasdaq fell by 3.12% and 4.99% respectively, both hitting the biggest one-day declines since 2020.
Behind the slump in U.S. stocks, the yield on the 10-year U.S. Treasury bond soared past 3%, and the U.S. dollar index stood at 104, a 20-year high. The continued rise in U.S. bond yields seems to signal to the market that the Fed’s pace of raising interest rates and shrinking its balance sheet will not stop. The analysis pointed out that U.S. stocks seemed to realize that the Fed’s aggressive “water withdrawal” became the new normal only on Thursday. Even if Federal Reserve Chairman Jerome Powell has temporarily ruled out market panic about a 75 basis point rate hike in June, investors still face the most aggressive tightening of U.S. monetary policy since 2000. Because Powell hinted that the next two FOMC meetings (the Fed meeting on interest rates) may raise interest rates by 50 basis points each, the last time such a large rate hike was 22 years ago.
The impact of soaring U.S. bond yields and the Fed’s potential aggressive interest rate hikes is obvious. At present, not only has the Fed’s balance sheet hit a record high of $9 trillion, but the federal government’s debt has accumulated a “quake lake” of $30 trillion. In order to control inflation, the Federal Reserve has to raise interest rates sharply and at the same time have to tighten its finances. This financial environment is very unfavorable for the stock market.
Affected by this, the Dow and S&P 500 fell more than 4% during the session, while the Nasdaq fell more than 6% during the session. Technology stocks have become the hardest hit area of this round of decline. Tesla fell 8.33%, Amazon fell 7.56%, Netflix fell 7.69%, and Apple fell 5.57%; the popular Chinese concept stocks were also not spared, and the leading Alibaba and Tencent ADR fell by 6%, the Nasdaq China Golden Dragon Index fell more than 7% overnight, and this panic quickly spread to the Hong Kong market.
In yesterday’s session, technology stocks in Hong Kong stocks were the biggest losers. Alibaba-SW, Tencent Holdings, Meituan W, etc. have lost almost all of their gains on April 29. In the A-share market, the industry sector also fell more and rose less, with tourism hotels, airports, real estate, and brewing industries leading the decline, while Internet services, software development, medical equipment, and traditional Chinese medicine industries rose against the market.
What is the current level of market sentiment?
Since the end of April, the A-share and Hong Kong stock markets have rebounded sharply one after another. However, the wide fluctuations in peripheral capital markets and commodity prices still left many people with lingering fears. What level has the current A-share market adjusted to? Has investor confidence recovered?
A few days ago, a sell-side research report that explored the secrets of bull-bear conversion based on the sentiment cycle of investors attracted attention. The author of the report was Zhang Junxiao, chief strategy officer of Guosheng Securities. This person has a lot of background. He followed the well-known “cycle king” Zhou Jintao in the industry. The latter is the former chief economist of CITIC Construction Investment. In 2007, he successfully predicted the subprime mortgage crisis. Global asset price volatility is predicted. The core conclusion given by Zhang Junxiao is that from the perspective of short-term strategic signals, the current market is in the “downturn zone” and is beginning to rebound upwards, which is now corresponding to a short-term buying point. From the perspective of the long-term sentiment cycle, investor sentiment is still in the “bottom” period since November 2021. That is to say, from the perspective of time dimension, the period of “bottom building” in the true sense has not yet been reached. This also means that there is still the possibility of repeated bottoming in the market in the future; but from the perspective of space, the current sentiment cycle value is close to the historical bottom. Obviously, for long-term funds, the left range has appeared.
The research report written by the team led by Qiu Xiang, co-chief strategist of CITIC Securities, also mentioned that after the adjustment in April, extreme pessimism has been fully released, the market has passed the period of maximum forced selling pressure, and some funds have begun to actively deploy recently. , investors are also extremely sensitive to marginally positive signals. Therefore, with the positive signals of the four major factors affecting the market one after another, it is expected that a mid-term repair market that will last for several months will begin in May.
His research report gave a specific explanation for the successive turnarounds of the four major factors: first, the situation of the epidemic in Shanghai has improved significantly, and the Politburo meeting once again emphasized the overall planning of economic development and epidemic prevention; The dimensions of the bailout of the main body and the healthy development of the platform economy have once again fully set the tone and responded to market concerns; once again, the Fed’s interest rate hike and balance sheet reduction were implemented in May, and the trade friction environment or phased improvement under the heavy pressure of overseas inflation; The quarterly report came to fruition, and the market entered a period of performance vacuum and confidence recovery.
Looking forward to the next quarter, Chen Guo of CITIC Construction Investment believes that the strategy can no longer be pessimistic, and it is necessary to gradually turn to optimism. The improvement trend of the entire internal and external environment is a high probability event. At the same time, the improvement process of the main contradictions inside and outside the market is likely to have certain repetitions. Investors should be prepared for the market to fluctuate at a certain stage in the bottom area.
<!–enpproperty 82467482022-05-07 07:10:39:0记者 林司楠