It’s all the fault of the election! No one knows heavy information!

Congratulations Biden, congratulations Biden!

Although China hasn’t made any official statement yet, the market has been unable to bear its inner ecstasy and expressed its love for Biden with a surge.

On November 9th, the A-share market was extremely hot and the industry sectors almost all rose. The trading volume of the two cities broke through one trillion after a lapse of 2 months!

In the index, the Shanghai Composite Index rose 1.86%, the Sword Index 3400, and the Shenzhen Component Index rose 2.19%, and almost reached a 5-year high. The growth rate of the ChiNext reached 3.6% at one time, and it rose by 2.96% in late trading to close at 2814 points.

Foreign capital is really good, and smart funds are still smart. The inflow in a single day is close to 20 billion, and the inflow in three days is 35 billion. This wave of A-share rises, the rhythm of foreign capital is still so accurate!

Foreign investment is very eye-catching, but today the most beautiful boy in the stock market is called Semiconductor. On November 9, Oriental Fortune’s semiconductor sector rose 5.62%, and the semiconductor ETF surged 8.81%.

Seeing the surge in semiconductors, many media and institutions immediately said:

The “Biden Order” is here, and Sino-US trade is expected to pick up, and semiconductors will benefit most!

I still remember that before Trump did not lose, the semiconductor industry had soared continuously because of the “domestic substitution” and the “concept of nation-building”. Today, the company has not changed and the logic has changed, but the result is still rising!

This result tells us that logic is not important. Rising is the last word. Only optimism is there. The U.S. will increase if substitutions are made.

The market is too hot and no one knows important signals? !

A yang line changed beliefs. After the rally on November 9, the market bulls continued to be optimistic. Brokers said: The market level will exceed imagination.

At this moment, the biggest question is: Where are all the risks?

Ye Tan Finance has always been independent and objective. We are calm when the market is hot, and we are calm when the market is cold. We sing a lot about the market. We have different views on this.

With Biden coming to power, as far as China is concerned, we expect the biggest benefit is that the trade problem will be solved.

However, to borrow Kissinger’s words, the world can’t go back, the general pattern of Sino-US relations has been set, it is difficult to buy old tickets, the second time is sweet.

Biden is Obama’s vice president. In Obama’s later period, a series of so-called return to the Asia-Pacific and Asia-Pacific rebalancing strategies are enough to show that the US attitude is the general trend, regardless of red or blue.

What will Biden do? It’s more political and far from the subject of this article. I will not discuss it in detail, but will return to trade.

Improving trade may be a false proposition.

why?

Looking at the data from the General Administration of Customs, in the first 10 months, the total value of my country’s import and export of goods trade was RMB 25.95 trillion, an increase of 1.1% over the same period last year.

Among them, exports were 14.33 trillion yuan, an increase of 2.4%; imports were 11.62 trillion yuan, a decrease of 0.5%; the trade surplus was 2.71 trillion yuan, an increase of 16.9%.

This is China’s exports have maintained positive growth for seven consecutive months since April, and imports have also been positive for two consecutive months. In terms of growth rate, the export growth rate in October has reached double digits in terms of U.S. dollars, with a performance of 11.4%, the highest since March 2019.

Specifically, according to data from the General Administration of Customs, in the first three quarters, my country’s imports and exports to ASEAN, the EU, the United States, Japan, and South Korea were respectively 3.38 trillion yuan, 3.23 trillion yuan, 2.82 trillion yuan, and 1.61 trillion yuan. Yuan, 1.45 trillion yuan, an increase of 7.7%, 2.9%, 2%, 1.4%, 1.1% respectively.

The 2% increase in the United States may seem modest, but the actual results are not bad.

Data from FX168 shows that in the eight years from 2012 to 2019, Sino-US trade had three years of negative growth, and the three-year growth was only single digits. If 2017 were not for the low base in 2016, the growth rate might not be so fast.

In other words, 2% is close to the normal year of Sino-US trade.

 

Trump has been playing the China card and MY war on Twitter, but who knows that because of the impact of the epidemic, the U.S. trade policy, judging from the results, has long been out of shape.

Before the general election, the lifting of the ban by leading companies such as Intel and AMD actually sent a signal that even if Trump re-appoints, there is still room for trade policy to be reversed, nothing more than how to talk.

Under the epidemic situation, our thinking is prone to extremes and pessimism, and we often only imagine bad ones, not good ones. This is especially true in terms of imports and exports. The pessimistic expectations are too strong. When we heard the news that India was constantly transferring orders and the shipping industry continued to explode, we were surprised to find that this is not the world we imagined.

Pessimistic expectations, optimistic results, optimistic expectations, pessimistic results.

The current Sino-US trade is not that bad. Therefore, if Biden is regarded as the savior of the trade link and the Sino-US trade is expected to improve substantially, this optimistic expectation may only bring pessimistic results.

Even looking at the future from the perspective of foreign investment, the expectation has already fallen into the market trend.

The U.S. election is too eye-catching and no one knows what the central bank said

In the past two days, the world has been staring at the US election, and important information has been buried.

On November 6, at the State Council’s regular policy briefing, the central bank made a statement that was very important, but few people knew it.

What to say?

Liu Guoqiang, deputy governor of the central bank, said:

Recently, the international community is discussing the issue of the withdrawal of future response measures, and policies in special periods cannot be long-term.

Withdrawal is necessary sooner or later, but the timing and method of withdrawal need to be carefully evaluated, mainly based on the status of economic recovery. Finance still serves the real economy, and economic conditions determine how financial policies should be adapted.

At the same meeting, Sun Guofeng, Director of the Monetary Policy Department of the Central Bank, also said:

In the next stage, a prudent monetary policy will be more flexible, moderate, and precise, and the intensity, pace, and focus of the policy will be adjusted in a timely manner based on changes in the situation and market demand. On the one hand, policies introduced during special periods will be adjusted in a timely manner; Further increase policy support in the field.

China’s stock market has always been closely related to changes in liquidity, and there are few emotions that can excite, break away from liquidity, and pull the market alone.

In July 2020, we saw that a single day of trillion, 1.5 trillion, can only pull the market to 3,400 points. Now that the registration system, there are more and more stocks, and more and more shares, this change means:

Unless we concentrate our efforts to lift the bank high, there will be no further increase in liquidity, and it will not be easy for the index to go further.

On November 6th, in addition to the regular meeting, the central bank also released a report called “China Financial Stability Report (2020)”, which clearly mentioned that resolving financial risks is the top priority.

According to the report of the central bank and the statistics of brokerage firms, the past two years have been effective in resolving risks, but they are not enough. In the results of the rating, the poorly rated 8-D still accounts for 12.4%, which is a drop from 2018. There was an increase in 2017.

China’s efforts to resolve financial risks often follow to strengthen supervision, and supervision comes with a tightening of flow effects. Tightening flows will naturally have a negative effect on the stock market. Everyone understands this.

On October 24, because of Jack’s words, the speed of supervision was faster than expected.

On November 2, the China Banking Regulatory Commission and the Central Bank issued the Interim Measures for the Administration of Online Small Loans (Draft for Comment), which clearly stated:

Online micro-loans may not be used for investment in bonds, stocks, etc. and for house purchases.

The adjustment is inevitable, and the exit is sooner or later. This is what the central bank said, and it will do the same in the past few months. Looking at the trend of Shibor, the trend has been going up.

 

In the past, Ye Tan Finance once told everyone that the RMB and the stock market are in a mapping relationship, and the relationship between the two is actually getting farther and farther.

In the days when the stock market was hesitant and hesitating, the renminbi made no progress and forcibly walked out of a posture of not hitting the south wall and not looking back.

7, 6.9, 6.8, 6.7, 6.6, all the way up and up!

 

From the perspective of market actions, the central bank did not intervene in the renminbi, but from the actual results, the normalization of the central bank’s monetary policy is truly affecting the renminbi expectations.

Just imagine, in a China + non-China epidemic world, only China will return to normal, and only China’s monetary policy will be normal. How will the RMB change?

The day when the renminbi and the stock market are separated is not far away!

There is one last point, which is very important and cannot be ignored.

Regardless of the reason, China is indeed strengthening supervision of technology giants, and the United States can also expect supervision.

Biden can be stronger than Hillary, absorbing the voters of radical Sanders, and reaching a tacit understanding with Sanders is the key factor.

According to a research report by Zhongtai Securities, in order to absorb Sanders’ voters, Biden fully absorbed the Sanders’ policies and recruited a large number of radical members in the team. For example, Biden and Sanders drafted a common plan and formed a common working group. Each working group is composed of 5 establishments and 3 progressives. The chairperson of each group is at the same time as Sanders and Biden’s Consultant cooperation.

On October 22, the American media POLITICO reported that Sanders was interested in a potential labor secretary in the Biden administration.

After the U.S. election, there is so-called “separation”, which is a kind of reward for the election. Sanders is so important to Biden’s victory, and it will definitely have a very important impact on Biden’s policies in the future. If he enters the cabinet, No doubt even more so.

What does Sanders advocate?

Advocate strong supervision of technology giants, advocate dismembering technology giants, and reduce monopoly.

In the past two years, in the Chinese and American stock markets, technology giants and technology white horses are the most important driving forces for the market rise. If supervision is strengthened rapidly, the valuation of technology leaders will inevitably be significantly affected, and important changes will naturally occur in the market outlook.

The reason is expensive. Good things are never cheap, but the environment has changed. No matter how expensive things are, there must be a discount. No matter how expensive things are, new estimates are needed!

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