In the early morning of The 19th (Thursday) Beijing time, the Federal Reserve released the minutes of the meeting, and policymakers discussed the possibility of reducing the scale of bond purchases this year at the July interest rate meeting. The haze of liquidity contraction struck, causing the three major US stock indexes and commodities to fall across the board on Wednesday. It followed suit by the spread of the wind in many capital markets around the world, followed by a follow-up in the Asia-Pacific market on Thursday, followed by a sharp decline across the European line, and then to the US stock Dow in the evening. In addition to the strong rise of the dollar index, commodity crude oil, copper, iron ore, etc. plummeted across the board, and the panic selling in the global capital market began?
"Black Thursday"?
In Beijing time, under the overnight decline in US stocks and commodities, the Asia-Pacific market fell during the day on August 19 (Thursday), with the Nikkei 225, South Korea Composite, FTSE Singapore Strait Index, etc. all falling by more than 1%, while Hong Kong's Hang Seng Index fell more than 2%. However, the A-share market is still relatively strong, with the Shanghai Composite Index falling only slightly by 0.57%, while the Shenzhen Component Index and the ChiNext Index both rose strongly.
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European stocks opened in the evening, and by the close, all three of Europe's major stock indexes had fallen sharply by more than 1%. Among them, the French CAC40 index fell the most, reaching 2.43%, the British FTSE 100 index fell 1.54%, and the German DAX index fell to 1.25%.
In the evening, the three major U.S. stock indexes opened sharply lower on Thursday, but rebounded during the session, with the Dow still down 0.19% as of the close, but the S&P 500 and nasdaq closed slightly higher, up 0.13% and 0.11%, respectively.
On Thursday, the commodities fell across the board, and almost none of them were spared. In crude oil, NYMEX crude oil fell another 2.38% at $63.66/ barrel after a sharp decline on Wednesday, and ICE cloth oil also continued to fall 2.36% at $66.62 / barrel, all hitting a new three-month low. In terms of base metals, LME tin fell sharply by more than 6%, the intraday decline was more than 10%, DCE iron ore, COMEX copper, LME copper, etc. fell by more than 1%, the intraday decline was more than 3%, have hit a new low for many days. Gold rose on Wednesday due to the risk aversion effect, but also turned around and fell slightly on Thursday, with COMEX gold and London gold both slightly diving below 0.5%.
Big tech stocks rose and fell, with Apple up 0.23%, Google up 0.25%, Microsoft up 2.08%, Netflix up 4.18%, Amazon down 0.42%, facebook down 0.09%. New energy auto stocks collectively closed down, Tesla down 2.25%, WEIO down 6.61%, Xiaopeng Motors down 4.89%, Ideal Auto down 3.40%, Nikola down 7.34%, Faraday Future down 7.26%, Workhorse down 5.33%, Lordstown down 9.49%.
Popular Chinese stocks generally fell sharply, Alibaba fell 6.85%, JD.com fell 5.10%, Weibo fell 0.85%, Pinduoduo fell 7.74%, Bilibili fell 6.03%, Baidu fell 3.94%, New Oriental fell 7.18%, NetEase fell 5.78%, Tencent Music fell 7.31%, iQiyi fell 5.86%, Didi fell 9.09%, shell fell 14.86.
There is a private U.S. stock portfolio drawdown of more than 30%
In the context of the recent resurgence of overseas stock markets, many domestic private equity institutions involved in the layout of equity assets in overseas markets have also seen a large drawdown in their stock portfolios. Chen Long, general manager of Us Hong Kong Capital, said that since the beginning of this year, the proportion of Chinese stocks in the overseas market layout of the institution's related private equity products has been relatively low, but as of last Friday, the overall loss of the relevant Chinese stocks has been about 20%. However, the proportion of relevant overseas equity assets in the total position of the product is less than 10%, so the impact on the net value of the relevant product is currently small.
The person in charge of the medium-sized private equity with the background of a team of securities companies in Shanghai told CSI Jun today that due to the early bottom reading of several domestic leading Internet companies and some education stocks, the fund products invested across the market under the private placement have seen a net value of more than expected drawdown. "By Monday's U.S. stock portfolio, it had retraced by more than 30 percent."
It is worth noting that after the rapid correction of this round of overseas markets, many head private placements still maintain "long-term optimism" for the high-quality assets of Chinese stocks. Jinglin Assets said that after the rapid correction of the market in this round, the long-term fundamentals of many Chinese-listed companies have not changed much, and more are only because of liquidity expectations and other reasons, which have an impact on the short-term stock prices of related stocks. From a fundamental point of view, the fundamentals of China's Internet and technology quality companies will not be fundamentally subverted. At present and for some time to come, investors should think about and look for the investment logic and opportunities behind these factors.
What is the market worried about?
The world's major capital markets on Thursday all-offline exploration, what is the market worried about?
The first is the earlier mentioned news in the minutes of the Fed's latest meeting that it may start to reduce the direction of bond purchases this year.
At the meeting, Fed officials voted to keep short-term interest rates anchored to near zero, while expressing optimism about the pace of economic growth. Fed officials say the Fed may reach the threshold of reducing the size of its bond purchases this year.
The minutes suggest that a handful of policymakers hope to start the taper process in the coming months so that when the economy strengthens further next year, the Fed can raise interest rates to curb the overheating of the economy. Others argue that employment has not yet met the criteria set by the Fed for substantial further progress. The Fed's Rosengren said large bond purchases were not suitable for the United States and would support a reduction in bond purchases starting in September.
In addition, Goldman Sachs is "suddenly" less optimistic about the growth rate of the US economy, and has lowered its GDP growth forecast twice in three weeks, while expecting inflation to continue to rise.
Three weeks ago, Goldman Sachs lowered its U.S. GDP growth forecasts for the third and fourth quarters of this year, down 1 percent to +8.5 percent and +5.0 percent, respectively, "because the U.S. services recovery is unlikely to be as strong as expected." This is unusual considering the trillions of monetary and fiscal stimulus that have already entered the economy.
This week, Goldman Sachs cut U.S. economic growth for the second time, cutting U.S. GDP growth in the third quarter from 8.5 percent to 5.5 percent, compared with its first forecast of 9.5 percent. The bank wrote in the report that it has cut its third-quarter GDP forecast to 5.5%, reflecting the impact on consumer spending and production. Spending on food, tourism and some other services is likely to decline in August, although the decline is expected to be modest and short-lived. Production is still affected by supply chain disruptions, particularly in the automotive industry, which could mean fewer inventory rebuilds in the third quarter.
The bank's revised forecast shows that GDP for the full year of 2021 will be revised down to 6% below general expectations (previously 6.4% vs. 6.2% of general expectations), and growth in 2022 will also be revised down to 4.5%. Some media joked that according to the speed of Goldman Sachs' adjustment, the US GDP growth rate will soon drop to 0 or negative.
Here are the detailed reasons why Goldman Sachs is downgrading GDP growth:
In the third quarter, delta-changing viruses had an impact on both consumer spending and production.
On the consumption side, last month, forecasts for 2021H2 were slightly lowered, with new virus spreads expected to delay a full recovery from the office-adjacent economy and the most virus-sensitive service sectors, such as recreational activities. But the decline in retail sales in July and the decline in consumer spending tracking data in early August suggest that consumption slowed more than expected.
Forward-looking indicators also indicate a further reduction in service spending. Restaurant bookings have fallen by about 7 percent since the end of July, with travel companies reporting an increase in cancellations and a slight drop in bookings, with media reports pointing out that some hospitals have again postponed elective surgeries because they need COVID-19 patients to be discharged to free up resources.
On the production side, the Delta virus extended the supply chain that had already been interrupted, delaying a full rebound in factory activity. Production stagnation in the second quarter led to a larger-than-expected decline in inventories and a widening trade deficit as U.S. producers struggled to meet strong consumer demand. Disappointing U.S. economic growth in the second quarter also illustrates this.
Moreover, the repeated outbreaks in Asia have also led to a renewed tightening of global supply, especially in the chip industry. Automakers now expect the impact of the semiconductor supply shortage in the third quarter on global auto production to be almost as great as in the second quarter, and that supply will not increase until the end of the third quarter or the fourth quarter.
As a result, Goldman Sachs has lowered its inventory accumulation forecast for the third quarter from $82 billion to $32 billion, although the turnaround in sharp inventory declines in the second quarter still contributed 4% to GDP growth in the third quarter.
While Goldman Sachs continues to lower its economic growth forecast, it has also continuously raised its inflation forecast:
The impact of the Delta variant virus on supply chains could also push up prices in some durable goods categories that have led to a spike in inflation this year in the short term.
Source: wind information, financial associated press