Chapter 251 Weekly Review: The Stock Market is a Barometer of the Economy

Sunday, April 28, 2024.

This week, there are two domestic and international events that require special attention:

First, abroad: The US economy has fallen into stagflation, and the EU is very sure to cut interest rates in June. The US has also hinted that it will cut interest rates in July.

If the EU and the US cut interest rates in June and July, it will release massive demand, which will be a huge boost to the global economy and will further stimulate the prices of various resources.

Second, domestically: The Shanghai Composite Index closed above 3088 points after several months, setting a new closing high. Northbound funds flowed in by tens of billions on the 26th.

It is worth noting that the Hang Seng Index has been trending very strongly recently, rising 8.8% in just one week.

As a connector between the mainland and overseas markets, the level of Hong Kong stocks can directly reflect the trend of overseas funds flowing in and out of A-shares.

It is very likely that a large amount of overseas funds are fleeing high-priced overseas assets and buying Chinese assets. If this is the case, the Shanghai Composite Index is likely to usher in a wave of funds.

This led to a reversal in the trends of Chinese and foreign stock markets. From the previous situation where the Chinese stock market continued to fall while overseas stock markets hit new highs, the Chinese stock market began to strengthen while overseas stock markets began to weaken.

Capital is profit-seeking, so it is not impossible.

In addition, there are several pieces of news that are worth noting.

1. The First Republic Bank of the United States collapsed.

Such high interest rates not only make it difficult for businesses and residents to breathe, but also make it difficult for banks to bear.

Buffett sold out his Wells Fargo holdings in 2022.

America, are you really not going to cut interest rates yet?

2. Lishui, Zhejiang Province plans to sell small residential land.

This news is also very important.

At a time when the real estate market has hit a low point, allowing urban residents to build their own houses is a good way to save the real estate market.

From now on, citizens of our country can also go back to their hometown to buy a piece of land and build a big villa like Americans.

This will certainly stimulate a considerable number of citizens who own property in the city to return to their hometowns and build houses.

Well, from this perspective, rural housing land is really good.

3. National Bureau of Statistics: Profits of large-scale industrial enterprises continued to grow in the first quarter, turning from a decline of 2.3% in 2023 to positive growth.

It is beyond many people's expectations, or rather, many people still don't believe it.

Now, my country's economy has climbed out of the trough in 2023 and has basically offset the economic impact of the decline in real estate.

Of course, judging from the detailed data released by the National Bureau of Statistics, the economic recovery is uneven, with some industries declining and others growing substantially.

This has led to public opinion that people working in declining industries are still complaining, mainly in the real estate industry chain, but the feelings of people working in recovering industries are different, such as the resource industry, machinery manufacturing such as home appliances, and the new energy vehicle industry chain.

The stock market is a barometer of the economy.

The current position of the stock market is also in a position of climbing up from the trough, which is what I often call the end of the bear market and the beginning of the bull market.

Q&A with stockholders:

"Shuangmu Xianren": Did the author ignore the Taiwan Strait issue?

Let us look further ahead and first review the Hong Kong issue.

Before Hong Kong's return, the Hong Kong issue was indeed a big problem because of the huge gap in power between China and Britain; after Hong Kong's return, it was because there were still some gaps between China and Britain; but now, the Hong Kong issue is no longer a problem, because the gap between China and Britain has become wider and wider.

The upper class just drew a circle, and now Hong Kong residents have begun to flock in and start shopping in Shenzhen. Even a large number of high-income people have begun to settle in Shenzhen. The plan for the Greater Bay Area has slowly become a reality.

"The Art of War" by Sun Tzu says: "The best military operation is to attack the enemy's plans, the next best is to attack their alliances, the next best is to attack their troops, and the worst is to attack their cities."

Therefore, using military force in a hot war is the worst strategy.

To put it another way, even if it costs a huge price,

In war, the best way is to attack the heart.

To be a blacksmith, you must be strong yourself.

This is the open conspiracy. (Harmonized, with some deletions)