The current A-share market is really not something I want to look at or analyze. Over the past three years, we have experienced three rounds of sharp declines, but none of them felt as desperate as this one. In the previous three rounds of accelerated drops, we knew they were panic selling and that a policy shift and national team buying would lead to a reversal. However, now that all the necessary meetings have been held and the national team has been buying for more than half a year, the A-shares show no signs of improvement and seem to be sinking deeper into the mire.
In the past, when discussing the bottom of a bear market, we would talk about the policy bottom, market bottom, and economic bottom. But now, policies have been rolled out multiple times, the economy has bottomed out several times, and even foreign capital has gone through several cycles of buying and selling. As the saying goes, "On the first drum roll, the soldiers are full of energy; on the second, they are less enthusiastic; and on the third, they are exhausted." Those who believed in the policies in the previous three rounds are now firmly trapped. Only the bond market and the five major banks have been smiling until now. The bull market in bonds, to put it bluntly, is a bet against the economy. Who dares to believe now? All the historical methods of rescuing the market have been used, including reducing stamp duty and suspending IPOs. So, I really don't know what can save the current A-shares. Flooding the market with liquidity is also unrealistic.
When the stock market falls, I often see comments mentioning short selling through securities lending, IPOs, and shareholding reduction, but those who have actually looked at the data know that IPOs have almost come to a halt this year, shareholding reduction has been strictly limited, and securities lending and securities lending have also been significantly tightened under a series of regulatory policies.
The current A-share market can truly be described as depressed, with a feeling that no one is playing. Foreign capital continues to sell, and today's sharp drop in A-shares is partly due to Morgan Stanley's bearish view. Public and private institutions are still caught in a redemption crisis, and those who are still buying are probably only the national team and insurance funds. The national team mainly buys the CSI 300 and SSE 50 ETFs, while insurance funds mainly buy high dividend stocks. As a result, the five major banks and other state-owned enterprises continue to hit new highs, while many individual stocks have already broken through the bottom of the year, and the market is extremely divided.
I have always emphasized the importance of incremental capital, as only with incremental capital can the stock market rise. Rational analysis suggests that the current savior for A-shares must be foreign capital, and for foreign capital to flow back, two conditions must be met: the Federal Reserve's interest rate cut and the introduction of policies that exceed expectations domestically. Therefore, it may not happen until late September at the earliest.
Looking at today's major news:
Tomorrow, the Jackson Hole Global Central Bank Annual Meeting will be held, and on Friday, Federal Reserve Chairman Powell will give a speech on the economic outlook. Whether the Federal Reserve will cut interest rates at the September meeting is also likely to be revealed. Ahead of this major meeting, market sentiment is cautious. Last night, the Nasdaq ended its eight-day winning streak, closing down 0.33%, with Chinese concept stocks generally falling. The NASDAQ Golden Dragon China Index fell 3.95%, including a more than 9% drop in JD.com's after-hours trading due to Walmart's plan to sell 144.5 million JD.com ADRs at a price of $24.85-25.85 per share. Today, JD.com's stock in Hong Kong fell more than 4%.
According to the Beijing Construction Project Bidding and Tendering Transaction System, the bidding plan for the Beijing Vehicle-Road-Cloud Integration New Infrastructure Construction Project has been released. The project is located in 12 administrative districts of Beijing and the Beijing Economic-Technological Development Area, covering an area of about 2324 square kilometers, involving 6050 road intersections, with an estimated investment of 4.031 billion yuan. The bidding scope includes the construction of 7418 new comprehensive poles, the reuse of 33,595 existing poles, 1074 kilometers of power supply and electrical conduits, 12,281 kilometers of cables, 5387 kilometers of optical cables, and 6050 sets of smart integrated boxes at intersections. The expected release time for the bidding announcement is September 25, 2024.
Stimulated by this news, the A-share vehicle-road-cloud concept sector has seen a significant increase, with Information Development and Ronglian Technology hitting the daily limit.
(Note: The translation is provided for informational purposes and does not constitute financial advice.)Apple is expected to hold its autumn launch event on September 10th, unveiling the iPhone 16 series of smartphones. Currently, the iPhone 16 is entering its peak production season. According to reports from Caixin Media and The Paper, the demand for labor at Foxconn in Zhengzhou has once again reached its peak. Recruitment agencies report that at least 50,000 people will be hired within two weeks, with the hourly wage for workers increasing to a maximum of 25 yuan. The production line is now fully engaged in manufacturing the new iPhone 16 models. Today, the consumer electronics sector in the A-share market also saw a significant rise.
Lastly, a brief look at the market performance shows that, as of the closing bell, the Shanghai Composite Index fell by 0.35%, the ChiNext Index fell by 0.60%, the Hong Kong Hang Seng Index fell by 0.69%, and the Hang Seng Tech Index fell by 1.82%. The trading volume on both markets continued to contract to 0.5 trillion yuan, with more than 3,200 stocks declining.
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