Text | South Street Turbidity
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A-share carnival: a feast, or a rhapsody of bubbles?
The picture comes from the Internet
Before the 11th long holiday, the A-share market staged a remarkable "pre-holiday effect": the index soared, the trading volume was amplified, and the money-making effect was significant, as if overnight, the bull market returned. When the carnival music stops, who will pay for the feast?
1. Soaring forward: the "pre-holiday effect" of A-shares
At the end of September, the A-share market, as always, showed the magic of the "pre-holiday effect", with the Shanghai Composite Index breaking through 3,200 points in one fell swoop, hitting a new high in the past six months; The Shenzhen Stock Exchange Component Index and the ChiNext Index also performed eye-catchingly, with amazing increases, with significant amplification of market volume, high enthusiasm for capital entry, and a great boost to investor confidence
1. Data Carnival:
The Shanghai Composite Index rose more than 5%, the biggest weekly gain in nearly half a year
The turnover of the two cities has exceeded one trillion yuan for many consecutive days, and the market activity has increased significantly
Northbound funds continued to flow in on a net basis, with a cumulative net purchase amount of more than 100 billion yuan, indicating that foreign investors are optimistic about the A-share market
2. Feast of plates:
Brokers, insurance, banks and other large financial sectors led the market, becoming the main force driving the index up, real estate, infrastructure, building materials and other cyclical industries are also active, benefiting from favorable policy expectations, technology, consumption and other growth sectors are relatively stagnant, but some leading companies are still sought after by funds
3. Emotional frenzy:
"The bull market is coming!" "A shares are about to take off!" ”…… All kinds of optimism spread in the market, and investors ran to enter the market with high confidence, for fear of missing out on this feast of wealth
Second, the driving force behind the feast: favorable policies and market expectations
The "pre-holiday effect" of the A-share market is not accidental, and it is driven by profound logic and multiple factors
1. The warm wind of the policy blows frequently, injecting a booster into the market:
The Politburo meeting made it clear that it is necessary to make good use of local government special bonds to support local economic development, and the market expects that the fiscal policy will be further increased in the fourth quarter, and infrastructure investment is expected to accelerate the landing, providing strong support for economic growth
The central bank continues to release liquidity and provide sufficient financial support for the market through various tools such as RRR cuts and reverse repos, reduce corporate financing costs and boost market confidence
The marginal relaxation of real estate policies, the improvement of market expectations, the implementation of the policy of "recognising houses without recognising loans" in many cities, and some cities have also reduced the proportion of down payments and mortgage interest rates, and the real estate market has shown signs of recovery, boosting the market's expectations for the economy
2. Market expectations have improved, and risk appetite has increased:
United States inflation data fell, the Fed rate hike expectations cooled, United States August CPI data was lower than expected, the market's expectations for the Fed to slow down the pace of interest rate hikes heated, the dollar index weakened, the RMB exchange rate rebounded, conducive to the inflow of funds in the A-share market
Despite the challenges of a complex and volatile external environment, China's economy still maintains strong resilience and vitality, with consumption and investment data gradually improving, and market expectations for economic recovery increasing
The valuation of A-shares is at a historically low level, and the overall valuation of A-shares has been at a historically low level after the previous adjustment, and compared with other major economies, the A-share market has more investment value and attracted more capital attention
3. After the carnival, think calmly: the hidden worries of bubbles and the prevention of risks
The "pre-holiday effect" of the A-share market is certainly exciting, but we must also keep a cool head, look at the market rationally, and guard against potential risks
1. Bubble worries:
The market sentiment is too optimistic, there are irrational factors, and some investors are affected by short-term market sentiment and blindly chase the rise and fall, which can easily lead to the generation of market bubbles
Some industries are overvalued and out of touch with fundamentals, and the valuations of some popular industries are already high, or even valuation bubbles, and once market expectations change, stock prices may rebound sharply
The performance differentiation of listed companies has intensified, and earnings growth is under pressure, and due to the macroeconomic environment, some listed companies are under pressure to profit growth, and performance is less than expected may cause market volatility
2. Risk prevention:
Investors should rationally analyze the market, do not be swayed by short-term market sentiment, avoid blindly chasing high, and formulate a reasonable investment plan according to their own risk tolerance
Pay attention to market risks, do a good job of taking profit and stop loss, market fluctuations are the norm, investors should pay close attention to market changes, adjust investment strategies in a timely manner, do a good job of taking profit and stop loss, and avoid the expansion of investment losses
Adhere to value investment, choose high-quality targets, investors should adhere to the concept of value investment, choose listed companies with good performance and great development potential for investment, and avoid investing in stocks with concept speculation and theme speculation
4. The Future of A-Shares: Structural Market and Long-term Investment Value
Looking ahead, the A-share market will show a structural trend, and long-term investment value will remain
1. Structural market-oriented, focusing on industry leaders and high-quality companies:
Economic transformation and upgrading, the rapid development of emerging industries, new energy, new materials, high-end manufacturing and other emerging industries will usher in greater development opportunities, and the performance of related listed companies is expected to maintain rapid growth
With the improvement of residents' income level and the change of consumption concepts, the trend of consumption upgrading will continue, and leading companies in food and beverage, medicine and biology, cultural tourism and other industries will continue to benefit
Technological innovation drives development, the competitiveness of leading technology companies is enhanced, scientific and technological innovation is the key to leading the future development, and leading technology companies in the fields of artificial intelligence, cloud computing, and big data will gain greater development space by virtue of their strong technical strength and market competitiveness
2. The value of long-term investment is highlighted, and we should pay attention to long-term investment opportunities in the A-share market:
China's long-term economic growth has provided solid support for the A-share market, which has a huge market scale, a complete industrial system, and continuous improvement in scientific and technological innovation capabilities, and the fundamentals of the long-term economic improvement have not changed, providing solid support for the A-share market
The continuous deepening of the capital market reform, the continuous optimization of the market environment, the steady progress of the registration-based reform, the continuous improvement of the delisting system, the continuous improvement of the quality of listed companies, and the continuous optimization of the ecological environment of the capital market are conducive to the long-term and healthy development of the A-share market
With China's economic development and the improvement of residents' income levels, residents' wealth continues to grow, and investment demand continues to be released, and the A-share market will become an important direction for residents' asset allocation
Epilogue:
The "pre-holiday effect" of the A-share market is a feast full of opportunities and challenges, we must keep a cool head, rationally analyze the market, grasp the investment opportunities, prevent potential risks, and look forward to the future, the A-share market will show a structural market, and the long-term investment value still exists, let us seize the opportunity, meet the challenges, and share the fruits of China's economic development and capital market reform
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