The climax of the US election is gradually falling, but the new crown epidemic is still spreading. The market is on fire at this time. Has the “Biden Bull” really come?
On November 9, the Shanghai Composite Index closed up 1.86% to 3,373.73 points; the Shenzhen Component Index rose 2.19% to 14,141.15 points, a record high in more than 5 years; the ChiNext Index rose 2.96% to 2,814 points, hitting 3 A new monthly high; the turnover of the two cities exceeded one trillion yuan again after two months; the northbound funds bought 19.7 billion yuan in net purchases throughout the day, setting a new high for the year.
The external market is booming. The Nikkei index rose 2.12% to close, reaching the highest level since 1991. South Korea and Australia both closed with big gains, and European futures also made good. There is a very strong background here, that is, the US futures index is rising across the board, of which the Nasdaq rose more than 2%.
Analysts believe that there are two reasons why the market rarely arbitrarily rises at the end of the year: First, it is no surprise that the Biden era will begin. According to market expectations, Biden may be more rational than Trump’s card. The economic turmoil in 2015 may have to be reversed; second, as the epidemic spreads, the possibility of a sudden withdrawal of monetary policy is unlikely, and fiscal stimulus plans may be introduced. In this context, the equity market ushered in a wave of upsurge.
In fact, the A-share market is relatively hesitant today. In the morning, when foreign capital surged, domestic capital fled intermittently. In the afternoon, the technology stocks once saw a rapid decline, and the growth of semiconductors in the Hong Kong stock market also quickly narrowed. However, with the capital intervention of Bo late, the market closed at a relatively high level.
The Shanghai Composite Index closed up 1.86% to 3373.73 points; the Shenzhen Component Index rose 2.19% to 14,141.15 points, setting a new high in more than 5 years; the ChiNext Index rose 2.96% to 2814 points, a 3-month high; two The market turnover exceeded one trillion yuan for the first time in two months; Northbound funds bought 19.7 billion yuan in net purchases throughout the day, setting a new high for the year. The industry sector is booming across the board, the domestic chip concept is active, shipping stocks continue to be strong, the new energy vehicle industry chain continues to be active, and even non-ferrous metals are also working hard in the afternoon. With the enlargement of the transaction, the stocks of securities companies made waves again, with GF Securities, CICC and Guolian Securities trading at their daily limit.
The Hang Seng Index closed up 1.18%, and the Hang Seng Technology Index surged 2.96%. Semiconductor, Chinese brokerage, port transportation and resource stocks were among the top gainers, and Tencent, Meituan, and JD.com reached new highs in the intraday trading.
The renminbi rose by nearly 400 points and reached the position of 6.55. A new round of devaluation seems to be taking shape.
The global market is rising across the board. Dow futures rose more than 5%, and European stocks continued to expand. Spain’s IBEX35 index rose more than 7.5%, Italy’s FTSE MIB index rose more than 6%, Germany’s DAX index rose more than 5.4%, and France’s CAC40 index rose more than 6%. US oil rose more than 7%.Biden may set up a wartime committee
The performance of the global market is first related to the great possibility that Biden will become the new President of the United States. Unlike Trump, Biden immediately announced that he would organize the fight against the new crown epidemic.
Jiemian News quoted ABC News on November 9th. Biden addressed the nation on the evening of the 7th local time, announcing that an expert team would be appointed on Monday local time to help establish a new crown epidemic response plan. He started on his first day as president. Biden said: “The plan will be based on science and built out of compassion, empathy and concern.”
According to reports, Biden’s initial plan includes doubling the number of testing points and strengthening the family’s rapid testing capabilities. To this end, he will establish a new “Pandemic Testing Committee” based on the War Production Committee established by Franklin Roosevelt to step up the production of tanks and aircraft after the attack on Pearl Harbor.
It is reported that Biden also hopes that the American people will monitor the spread of the virus in their zip codes. This work is currently carried out at the local level, but it is often difficult to detect and interpret. Biden’s plan also includes calling for the mobilization of at least 100,000 Americans to help trace contacts and protect high-risk groups, while establishing a separate task force to focus on racial and ethnic differences.
Kate Bedingfield, deputy manager of the Biden campaign team, revealed that Vivek Murthy, director of the Obama administration’s health department, and David Kessler, former director of the US Food and Drug Administration (FDA), will co-lead the new crown task force. According to the New York Times, Dr. Marcella Nunez-Smith of Yale University will also help oversee the work of the team.
According to statistics from Reuters on Sunday, with the third wave of COVID-19 sweeping the country, the United States became the first country to have more than 10 million cases of coronavirus infections since the pandemic. The United States has reported about 1 million cases in the past 10 days, which is the highest infection rate since the first case of the new coronavirus was reported in Washington State 293 days ago.
Biden’s influence on the world economy
What impact will Biden have on the world economy? Phoenix.com.cn contacted Xu Hongcai, deputy director of the Economic Policy Committee of the China Policy Research Institute, to provide a profound interpretation of matters related to the US presidential election.
Xu Hongcai believes that after Biden takes power, the original traditional order will be restored.
At the international level, in order to restore the international image of the United States, Biden may completely subvert Trump’s policies, and relations with WHO, UNESCO, WTO, etc. will be restored. The previous anti-globalization will turn around because of Biden’s election, and the trend of globalization will reappear. Biden will regain its deviation from globalization in the past four years, but this will take time.
At the domestic level, the top priority for the United States is to control the epidemic. Biden will first adopt scientific methods to control the epidemic, such as maintaining social distance and speeding up vaccine development. In this regard, the United States may strengthen cooperation with China.
After the epidemic is contained, Biden will restore economic order. Therefore, he must increase fiscal expenditures, adopt a proactive fiscal policy, and expand the fiscal deficit. Not long ago, the Democratic Party proposed a nearly two trillion economic stimulus plan, which may continue after Biden takes office.
Xu Hongcai said that in the short term, Sino-US relations are different from the unpredictability of Trump’s tenure. Biden’s appointment is a stable factor and predictable.
First, China’s trade in services with the United States is in deficit. For example, if everything returns to normal after the epidemic, people-to-people exchanges will also resume, and the Chinese will spend money on American services and education, which will benefit American exports.
Second, China’s financial industry is opening up. If the United States does not actively participate, the opportunity will be preempted by Japan and Europe.
Third, the United States wants to expand fiscal expenditures and repair dilapidated infrastructure, but it is not strong enough to issue national debt. China is a large holder of national debt. Therefore, strengthening cooperation with China can expand investment between China and the United States.
Xu Hongcai believes that in the short term, the United States will not change its low interest rate and loose monetary policy, so the pressure on the devaluation of the dollar will increase. In the context of expanding opening up, the fundamentals of China’s economy are steadily improving, and the renminbi will appreciate. However, since the exchange rate itself will adjust itself, and China’s opening up of financial and service industries will also reduce China’s trade surplus, which is conducive to promoting international balance of payments and to a certain extent alleviating the pressure of RMB appreciation. In addition, China’s interest base will promote the flow of funds into China, which is the origin of the appreciation of the renminbi. In addition to the automatic adjustment and the previous appreciation of the RMB, the future appreciation space is limited. Therefore, there will be no further substantial appreciation of the RMB, and there may be ups and downs in the short term, and floating is a trend.
Regarding the changes in the gold market, Xu Hongcai believes that if the loose monetary policy continues to be implemented, the US dollar will be under pressure to depreciate, and gold will continue to rise. Biden’s coming to power will help stabilize market expectations and benefit the financial market, but the demand for hedging will weaken. Gold has upward momentum, but the upward momentum is limited, and the demand for hedging is weakened. There will be no major fluctuations in the stock market and bond market. As long as interest rates can be stabilized, there will be no short-term interest rate hikes or further easing, and the bond market is relatively stable. It seems that interest rates are gradually returning to normal with the control of the epidemic, and interest rates will remain relatively stable in the short term.
Reprint indicated source：Spark Global Limited information