The Shanghai Stock Exchange 50 has fallen for three consecutive years, and Hong Kong stocks have fallen for four consecutive years, what is the backbone of the institution?
Last Friday, Guoxin Capital entered the market to protect the disk on a stable day, today A shares, Hong Kong stocks once again fell across the board, especially at noon accelerated diving, closed at the lowest point of the day, the mood has signs of bad again.
Since November, the market expects the Federal Reserve to raise interest rates at an inflection point, and the expectation of interest rate cuts has become more and more consistent, and the yield of the US 10 bonds has peaked and fallen to promote the global stock market, gold, and bitcoin to rise, while A-shares and Hong Kong stocks have not risen but have fallen, which has formed a huge divergence from the global stock market, indicating that A-shares and Hong Kong stocks have their strong endogenous downward momentum, which is no longer something that can be changed by external forces.
The reason why A-shares continue to weaken is that from a fundamental point of view, under the interweaving of multiple long-term problems such as real estate risks and population aging, the market is very pessimistic about the domestic economy.
Fundamentals and capital are one and the same, the flow of funds comes from the trading behavior of the main body of the market, and the trading behavior is based on the expectations of the main body, if the majority of investors and even residents have tickets, confidence, will naturally buy, to the stock market to bring incremental funds, the stock market will naturally rise.
Therefore, the entry of national teams such as Huijin and Guoxin Capital into the market only plays a role in providing liquidity and boosting confidence, reducing the risk of the market entering a vicious circle of killing liquidity, and exchanging time for space, unable to reverse market expectations.
As of the close of trading on December 4, the A-share Shanghai Composite 50 Index fell by 11.44%, which has fallen for three consecutive years, and unless there is a month left for A-shares to rebound violently, the Shanghai Composite 50 will fall for three consecutive years. Since 2004, the Shanghai Composite 50 Index has fallen for two consecutive years at most, and this year it is likely to set a historical record.
In addition, as of today's close, the Hang Seng Index of Hong Kong stocks has fallen by 15.69% this year, which has fallen for four consecutive years, and similarly, unless there is a month of violent rise left, the Hang Seng Index will also set a record of four consecutive years of decline. From 1964 to the present, the Hang Seng Index has recorded the largest consecutive decline for three years, the last time was the 2000 technology stock bubble crisis, and even the 2008 financial crisis fell for a year.
A-shares and Hong Kong stocks are both RMB assets, both of which have set a record for falling below the historical bear market, behind which is an unprecedented pessimistic expectation. The market believes that in the context of real estate to see the historical top, the aging population, the high leverage ratio of residents, and the de-globalization of international trade, all pessimistic records may be broken, and the index valuation can be undervalued for four consecutive years, and the index valuation can be seriously undervalued.
To be honest, we hate to talk about grand narratives in extreme positions, such as talking about the grand narrative of "core assets are worth high valuation" before the Spring Festival in '21, then "core assets" entered a three-year bear market, and now we are talking about the grand narrative of "A-shares will always be undervalued and there will be no bull market", which is not the same as the kind of rhetoric in '21.
The bottom is pessimistic, and it is impossible to kill the bottom without pessimism, and at this time, pessimistic narratives will be particularly easy to win people's hearts, and we will also tend to believe pessimistic narratives. However, if we allow pessimism to dominate our hearts, we will lose our rational judgment, so the more extreme the situation, the more we should abandon the influence of emotions and believe in common sense, mean reversion, and the belief that everything is cyclical.
Believing that the narrative of "this time is different" may cost us a lot. Of course, there are also successful cases, such as Japan's "lost twenty years", the sooner the meat is cut, the sooner it will be liberated.
Some friends may want to refute: "I don't deny that everything is a cycle, but this "cycle" may only be two or three years, or it may be very long, and if you can't survive this "cycle", it is better to believe that "this time is different". ”
There is some truth to this view. Therefore, in the face of the continuous decline of A-shares breaking historical records, it is either an extremely pessimistic reversal, or it may really have to survive for a few years.
Finally, as of the close, the Shanghai Composite Index fell 0.29%, the ChiNext Index fell 0.90%, the Hong Kong Hang Seng Index fell 1.09%, and the Hang Seng Technology Index fell 1.86%. The turnover of the two cities increased slightly to 0.85 trillion yuan, and the northbound funds sold a net of 1.441 billion yuan.
In terms of industries, non-ferrous metals, agriculture, forestry, animal husbandry and fishery, coal, media and other industries led the gains, while beauty care, medicine and biology, real estate, food and beverage, power equipment and other industries led the decline.
The sharp decline in the real estate chain is mainly due to the fact that Pan Gongsheng, governor of the central bank, wrote an article in the People's Daily entitled "Actively Adapt to the Major Transformation of the Mainland Real Estate Market and Strategically Firmly Adhere to the Positioning of "Housing for Living, Not for Speculation", which once again emphasized that housing is not for speculation.
The plunge in pharmaceuticals was due to the pessimistic performance guidance of WuXi Biologics, which hit market expectations, and WuXi Biologics plummeted by more than 20% and suspended trading, which also led to the collapse of the A-share and Hong Kong pharmaceutical sectors.
Risk Warning:
The stock market is risky, investment needs to be cautious, this article does not constitute investment advice, readers need to think independently