In the four trading days after the holiday, the A-share market opened sharply higher and lower, which has swept away the optimism before the holiday, and the entire market has once again entered a state of panic.
In these 4 trading days, the market opened directly with a daily limit on October 8, completely locking the space for continuing to attack on the same day. Although there was short-term support for the market pullback to near the 5-day line on Thursday, the subsequent performance of the market was weaker than expected, and it opened low and fell below the 5-day line on Friday, which means that the market's previous unilateral upward channel has been broken!
It is particularly noteworthy that the change in trading volume, also with October 8 as the critical point, has shown a significant attenuation! Before October 8, the price has been rising, but after October 8, the trading volume of the Shanghai and Shenzhen markets shrank from 3.5 trillion to about 1.5 trillion on Friday, a staggering 2 trillion shrinkage!
The shrinkage is so obvious, indicating that in the process of the sharp fall, the funds in the market have been reluctant to sell, and they are unwilling to hand over the chips in their hands in the sharp fall; And the over-the-counter funds are also very cautious, and they dare not reach out to catch the knife when they fall sharply. It is precisely because the on-site and off-market funds are collectively in a wait-and-see state that the trading volume of the market has shrunk significantly.
It can be said that the trend of the entire market next week is very critical, which is related to the success or failure of this round of rebound! If the entire market continues to fall sharply next week, it is bound to completely shake the confidence of investors, not only forcing retail investors to leave the market, but also institutions and floating capital will turn their guns around and short; On the other hand, only if the entire market stabilizes the pace of decline, it is possible to maintain the results of the rebound!
So, how will the market go next week? Will it be able to stabilize the downward trend near the 10-day line, as Jingyang expected? To figure out this problem, we must do a detailed combing of the market news over the weekend to see if there are any heavyweight positives or negatives that will have a lasting impact on the market trend next week.
First, an important meeting of the Ministry of Finance was held, releasing intensive benefits!
At the press conference of the State Council Information Office yesterday morning, Minister of Finance Lan Foan made an important statement, standing for the next stage of active fiscal policy, and released a series of blockbuster benefits!
This incident should be the one thing that the whole market has paid the most attention to this weekend! In last Thursday and Friday's articles, Jingyang has already spoiled in advance, but according to Jingyang's observation, this time Minister of Finance Lan Fo'an's speech still released a lot of new voices, which is worthy of everyone's great attention!
Due to the long duration of this press conference, Lan Fo'an's speech has a lot of content, so Jing Yang will only talk to you about some of the key issues mentioned by Lan Fo'an at this press conference. According to Jing Yang's observation, Lan Fo'an's speech involved 13 aspects, of which the more important points are:
1. China's finances are resilient enough to achieve a balance between revenue and expenditure and achieve this year's budget target by adopting comprehensive measures. 2. A package of incremental policies will be introduced, including resolving local debts, replenishing bank capital, and supporting real estate development. 3. It is proposed to increase the debt limit of a larger scale at one time, replace the stock of implicit debts of local governments, and increase efforts to support local governments to resolve debt risks.
In Jingyang's view, the focus of Lan Fo'an's speech this time is on the incremental policy, which emphasized that "the central government still has a large room for borrowing and deficit improvement." According to Jingyang's understanding, the market generally expected the scale of incremental fiscal policy to be about 2 trillion yuan. However, the latest forecast given by institutional investors yesterday shows that the scale of incremental policies in the later period may exceed 5 trillion yuan, of which 3 trillion yuan is the demand for local government bonds; $2 trillion will be used to make up for the budget gap.
As far as the short-term trend of the A-share market is concerned, the Ministry of Finance meeting was held, although it was not clear how large the incremental increase in the later period was, but even if the final scale of funds was less than 2 trillion, the A-share market also digested the negative with a continuous sharp decline. However, if the final incremental policy strength exceeds 2 trillion, then the unexpected positive will bring support to the later trend of A-shares!
Second, the exchange quickly took action to crack down on illegal holdings!
The A-share market weakened significantly after the holiday, and a large part of the reason was related to the reduction of holdings by listed companies. Especially before October 8, there were signs of a resurgence of intensive reductions. According to Jingyang's observation, from a few trading days before the holiday to the first day after the holiday, nearly 300 companies collectively issued announcements on reducing their holdings, among which there are also some listed companies that have liquidated their holdings, and there are not a few illegal reductions.
Although the number of companies reducing their holdings decreased sharply when the market fell sharply this week, the impact of this behavior on the market's bullish sentiment has not dissipated, and it has also intensified the retracement of the A-share market!
It is worth noting that this weekend, the regulator began to take action against illegal holdings!
The official website of the Shanghai Securities Regulatory Bureau issued a document stating that Wang Xiaoqing, Sun Xiaowen, and Wei Changwei were ordered to repurchase their shares in violation of regulations and pay the price difference to the listed company. On the evening of the same day, the official website of the Shenzhen Securities Regulatory Bureau issued a document stating that Wei Changwei was ordered to repurchase shares in violation of regulations and pay the price difference to the listed company.
Jingyang noticed that among the several people who were fined this time, Wang Xiaoqing alone had a record of reducing his holdings in violation of regulations many times. From September 27 to October 8, it acquired the shares of more than 5% of the shareholders of three listed companies, including CEFC Coopers, Ai Rong Software and Baijia Technology, through block trading, with a total of 2.439 million shares, and then sold all the shares of the two companies it transferred from Huaxin Coopers and Ai Rong Software and part of the shares of Baijia Technology through the secondary market from September 30 to October 9, with a total of 2.249 million shares. Only these few transactions made Wang Xiaoqing profit tens of millions of yuan in violation of regulations!
As you can see, the punishment of the exchange is to order it to reduce its holdings in violation of regulations and pay the price difference to the listed company. To be honest, this kind of punishment is not enough to deter illegal reductions. Because after the illegal reduction is discovered, it is only to repurchase the part of the reduction and hand over the profits of the illegal reduction, because there is no fine, the cost of violation is too low, which will undoubtedly make the illegal reduction more rampant!
From this point of view, the exchange's crackdown on illegal holdings will not be good for the market, but negative. If the CSRC does not introduce stricter punishment measures later, and causes the flood of illegal holdings, it may shake the foundation of the department's rebound! This deserves our high vigilance!
Third, the Dow Jones and S&P hit record highs, and popular Chinese concept stocks rose!
On Friday night, the three major U.S. stock indexes collectively closed higher, the Dow Jones and the S&P 500 index continued to hit a new closing high, as of the close, the Dow Jones Industrial Average rose 409.74 points from the previous trading day to close at 42863.86 points, an increase of 0.97%; The S&P 500-stock index rose 34.98 points, or 0.61%, to close at 5,815.03; The Nasdaq Composite Index rose 60.89 points, or 0.33%, to close at 18,342.94.
It is worth noting that the large technology stocks in the United States were mixed, and Tesla's stock price fell 8% on the day because Tesla did not explain several questions from investors at the driverless taxi press conference!
However, popular Chinese concept stocks have generally risen, with the Nasdaq China Golden Dragon Index rising 0.91%, down 6.87% this week. iQiyi and Futu Holdings rose more than 3%, Pinduoduo and Tencent Music rose more than 2%, Xpeng Motors, JD.com, Full Bang, and Bilibili rose more than 1%, and Alibaba, Li Auto, Weilai, and NetEase rose slightly.
It can be seen from the performance of U.S. stocks this Friday that the overall trend of U.S. stocks is relatively optimistic and will not have a negative impact on the opening of A-shares next Monday. However, the performance of different individual stocks can still explain some problems.
The first is Tesla's sharp decline, which may have a short-term negative impact on the driverless sector next Monday. However, it is difficult for such large technology stocks in the U.S. stock market to have a continuous sharp fall, and this sharp decline is not that Tesla's driverless taxi is lower than expected, but Musk did not answer several questions from investors, such as the specific mass production time of Tesla's driverless taxi, and the listing of low-cost driverless taxis. Therefore, Tesla will probably slowly stabilize after a day or two of sharp decline. Then the impact of its sharp fall on the unmanned sector of the A-share market may be reflected on Monday and Tuesday, and will be gradually digested later.
What is interesting is the trend of Chinese concept stocks. In the case of the overall decline of A-shares on Friday, the Chinese concept stocks in the U.S. stock market did not follow the decline on Friday night, which shows that foreign investors are very willing to buy dips and dips, which will have a positive impact on the entire market trend next Monday!
Judging from the weekend news, it can be described as a mixed bag. However, it is obvious that the positive strength is greater than the negative one, especially the positive fiscal policy is about to land, which may have a continuous impact on the trend of A-shares in the later period. The Chinese concept stocks and Hong Kong stocks in the U.S. stocks are all rebounding in advance of A-shares on Friday, which indicates that the decline of A-shares next week may not be too large, and the probability of quickly stopping the fall and stabilizing after the 10-day line is tested on Monday is greater!
As for the reduction of holdings, although there are still policy loopholes, the number of holdings has been reduced after the continuous sharp decline, and illegal reductions have become the focus of recent regulatory attention, which indicates that the reduction of holdings in the next period is likely to be reduced. Jingyang also believes that in the future, the regulator will thoroughly deal with the loopholes in reducing holdings, so that the operating environment of the A-share market will be more healthy and transparent!