Chapter 254 Hang Seng Index is bullish, Shanghai Composite Index hits a new high!

During the just-passed May Day holiday, while investors were having fun, they must have been quite uneasy in their hearts.

Because, in the past few days, the Hang Seng Index has been rising almost every day, from the lowest point of 14,794 points to 18,604 points, an increase of more than 20%, entering a de facto bull market.

Especially in the past two weeks, the Hang Seng Index has soared by more than 2,000 points from its lowest point of 16,044 points, which is a unique moment.

The surge in the Hang Seng Index is generally considered to be a result of international funds withdrawing from financial assets in countries such as Japan and the United States, buying relatively undervalued Chinese assets, and switching between high and low levels of wealth.

This cannot help but make people more concerned about the trend of the A-share market today.

Today, the VIP room was full of people early in the morning. Everyone was staring at the computer, watching the market trends, and bursts of shouting broke out from time to time.

Supported by positive holiday factors, the Shanghai Composite Index jumped high at 3132 points and then continued to rise, reaching a high of 3142 points, an increase of more than 1%. Thousands of stocks rose.

During the trading session, trading was active, with liquor, real estate, consumer goods, banks, insurance, and chemicals all soaring. Jiugui Liquor, Tongce Medical, Nan Guo Real Estate, and Huayuan Real Estate all hit their daily limit.

However, some strong cyclical stocks that had been strong in the early stage fell against the trend, such as China Petroleum, Luoyang Molybdenum, Zijin Mining, Shaanxi Coal, and Western Mining, all of which fell by more than 3%.

Even worse was the ST sector, where ST Baan and ST Lingda directly hit the lower limit of 20%. In addition, more than 60 ST stocks were stuck at the lower limit.

The ST hype concept of the past is gone forever under strict supervision.

Old Chen felt a little disappointed as he watched strong cyclical stocks adjust against the trend. He complained, "Ah, the market is up, but unfortunately my holdings aren't. I'm only making money from the index, not the money myself..."

"Alas, everything was fine before the festival, how come it changed so suddenly after the festival?"

"Old Chen, it turns out that the stock exchange is run by your family. Your stocks are only allowed to rise, not fall..." Xiao Bo turned his head and said with a smile after hearing this.

"Well, well, that's what I'm wondering," Lao Chen argued. "I noticed that futures prices didn't adjust much during the holidays, so why are they not following the broader market once the market opens after the holidays?"

"You saw the market hit a new high and wanted to chase the gains, right? Hehe," Xiao Bo immediately revealed Old Chen's thoughts. "Since you want to chase it, why not give it a try?"

Upon hearing this, Lao Chen scratched his head in embarrassment, and looked at the liquor, real estate, consumer and other sectors that had performed well. Although he tried to make a move, he still didn't dare to place an order.

These sectors have indeed risen, but based on past experience, after the surge, everything is often in chaos.

He was a little scared.

Li Feng listened to the conversation between the two without saying a word.

Because, even ghosts and gods cannot predict such short-term sector fluctuations.

What he is more concerned about now is the logic behind the market and some deeper events that support this logic.

In the past few days, several important events have occurred at home and abroad that deserve special attention.

First, the domestic ZZJ meeting announced that the Third Plenary Session of the 18th CPC Central Committee, which had been delayed for half a year, would be held in July.

The issues discussed at the conference were not only numerous but also extremely important and sensitive.

1. The meeting proposed "to issue and make good use of ultra-long-term special government bonds as soon as possible" and "to flexibly use policy tools such as interest rates and reserve requirements to increase support for the real economy and reduce the overall financing costs of society."

This shows that the overall monetary policy in the second half of the year will remain loose, and there is a possibility of further reserve requirement ratio cuts and interest rate cuts.

There is still no worry on the domestic funding side.

2. "Strengthen patient capital."

Patient capital is roughly equivalent to value investing.

This shows that the requirements for the capital market have never changed since the construction of a financial powerhouse and have remained consistent.

The ultimate goal is to emulate the United States and build a slow-growth market.

In order to allow this market to bring sufficient feedback to many participants (domestic and foreign), the supporting measures are to improve the quality of listed companies, urge dividends to promote market blood-making, and at the same time strengthen supervision and forced delisting to delay market bleeding, turning the previous short bull and long bear market into a slow bull market.

The key is to strive to build stable expectations.

Simply put, you need to learn how to "squeeze the toothpaste."

Just like Apple's slow updates and iterations, or the Federal Reserve's expectation management of interest rate hikes and cuts, it strives to slowly and steadily release various favorable factors (enterprises, policies, funds, etc.), forming a slightly upward expectation curve, thereby allowing the index to become a slow bull market.

It’s not like before, where things would get chaotic if left alone, and people would go crazy if things got chaotic, and die if they went crazy.

3. "Comprehensively study policy measures to digest existing real estate and optimize incremental housing."

There have been many ghost stories in the real estate industry recently.

Various rumors are emerging one after another.

Coupled with the surge in the real estate sector in the past few days, this statement is even more reminiscent of others.

There is speculation that my country will follow the example of Fannie Mae and Freddie Mac in the United States and establish a real estate acquisition and leasing model, and may also develop housing loan mortgage financing business in the real estate industry.

Some people also say that the model of building one household on small plots of land in Lishui may be relaxed, and the "housing to the countryside" policy may be launched to stimulate economic growth.

There are many different opinions and no consensus.

However, no matter which model is adopted, it needs to be institutionally guaranteed and is very likely to begin in July.

The second and third QH will be held in July.

As usual, the third QH mainly talks about reform issues.

Reform, in the final analysis, is about how to divide the cake scientifically.

This meeting was originally scheduled to be held at the end of last year, but for some unknown reason, it was postponed until now and announced to be held in July.

I believe that all major issues, whether fiscal and monetary policies or economic and real estate issues, will be discussed at this meeting.

This is destined to be another epoch-making meeting following the Central Financial Conference held last year, which called for "building a strong financial country."

It's really exciting.

Third, the upper echelons visited France, Hungary and Serbia.

France is one of the five permanent members of the UN Security Council and one of the decision-makers in the EU. Hungary is a friendly country to my country and Serbia is a staunch ally of my country.

This visit to Europe is of great significance.

Especially at a time when China and the United States are arguing with each other, the United States is showing signs of fatigue, interest rate cuts are still pending, and the EU is showing its ambivalence both economically (the EU has hinted that it will cut interest rates in June) and politically (Macron recently expressed his intention to enhance the EU's independence), which seems to have some hidden meaning.

Considering that Yellen and Blinken visited China successively last month, as well as Russian Foreign Minister Lavrov's visit to China, there are also reports that Putin will visit China in May.

Also, as just announced, the Third Middle School QH will be held at a sensitive time in July.

This really makes one think.

The big guys (China, the US, Russia and the EU) should be trading chips.

Among these, it is nothing more than the word "interest". To be more specific, it should be the Russo-Palestinian War and the Israeli-Palestinian conflict, and even financial arrangements.

The former involves the shift in the world's strategic situation, while the latter involves the situation in the Middle East, especially the direction of oil prices.

Can't help but pay attention.

Fourth, the US non-farm payrolls fell short of expectations.

The U.S. non-farm payrolls in April were only 175,000, lower than the expected 240,000. Compared with the non-farm payrolls data of 315,000 in March, the drop was incredible.

This data has caused expectations of interest rate hikes to rise again before they can even take hold.

It's so fake.

However, data is like a little girl who can be dressed up by anyone and can speak from the heart, especially for the United States.

Without going too far, let’s say in mid-2021, when the US CPI hit a new high in decades, almost everyone knew that the US was experiencing a period of hyperinflation.

However, the Federal Reserve Chairman did not immediately raise interest rates significantly, but instead said: "Inflation is temporary."

Does he really not understand?

Wrong, it’s not that he doesn’t understand, he’s just pretending not to understand.

Because capital, the behind-the-scenes controller of the government, is not ready yet and needs time to turn around.

As for whether lying and cheating will lead to loss of credibility, it is not within their consideration.

In the words of former U.S. Secretary of State and former CIA chief Mike Pompeo, "We lie, we cheat, we steal, and we even have a course dedicated to teaching it. This is the glory of America's continuous exploration and progress."

When he said this at Texas A&M University in 2019, no one objected, and no one felt ashamed because they were used to it.

Back to the present, I have prescribed several remedies for the stagflation situation that the United States is facing, such as lowering oil prices, re-coupling with my country, carrying out internal reforms, and targeted blasting of interest groups.

Unfortunately, these are too difficult for it.

Now, with only a few months left until the election, the best way to truly solve stagflation may be to falsify the data.

The best way is to falsify data, pretend to cut interest rates "out of necessity" to stimulate the economy, and use relatively good economic data to support one's own election.

As for future problems, "After I die, who cares about the floods?" What's more, we don't even know who the next president will be.

Of course, at the same time, the United States is also trying to ease the situation in the Middle East, stabilize oil prices, and ease the anti-war unrest in domestic schools to a certain extent.

For example, it was just revealed that the United States has suspended the supply of ammunition to Israel.

Unfortunately, it seems that Israel does not appreciate it. It bombed the Palestine Relief and Works Agency for Palestine Refugees early this morning and said it would attack Rafah.

The conflict between the son and the father is getting deeper and deeper.

Fifth, water, electricity, and gas prices have been raised in many places, and the prices of several high-speed rail lines will also need to be adjusted.

Q&A with stockholders: "Finally Perfect":

The book says that investing in bank stocks is better when interest rates have just been raised, but banks in the United States have gone bankrupt due to interest rate hikes, which should not be good for banks.

In theory, bank stock investment should be made when the financial cycle is about to begin, which is when interest rates are rising. As the interest rate spread widens and asset quality improves, the performance of bank stocks will improve rapidly.

For example, at the end of 2016, the last financial cycle began, which was a good time to buy bank stocks. Bank stocks also had a good trend in 2017 (around Chapter 137).

However, as interest rate hikes are gradually implemented, excessively high interest rates will suppress economic activities, slow down corporate vitality, and suffocate economic growth.

Therefore, you should sell bank stocks first at the end of the interest rate hike (at this moment, the performance of European and American bank stocks is beginning to come under pressure).

However, there are exceptions to everything.

At the end of 2014, and even now, bank stocks have seen a good performance.

This is because policies are taking effect.

Whether it was ten years ago in 2014 (Chapter 58) or ten years later in 2024, my country is in the channel of interest rate cuts, and there will even be further interest rate cuts in the future, which is obviously bad news for bank stocks.

However, the invisible big hand requires that bank stocks must rise. So, driven by funds, bank stocks have to rise even if they don’t want to, despite the negative news.

Therefore, we must remember that A-shares are not only a capital market, but also a policy market. When we invest in stocks, we must not only look at the macro capital side, but also the policy side, and more importantly, the micro stock fundamentals.

These three aspects are closely connected, progressing from large to small, and are the key to everything from the bull and bear markets of A-shares to the rise and fall of individual stocks.

If you are obsessed with the stock price, trends, good news, or even performance, dividends, etc., then you are being blinded by one thing.

When I finished the manuscript, it was already afternoon. Suddenly, a wave of funds poured into chemical stocks, and more than ten stocks including Cangzhou Dahua, Jinniu Chemical, and Vinegar Chemical Co., Ltd. were closed at the upper limit one after another.

It's really one wave after another, and the inflation trend keeps rising and falling.

It's after the holidays, and the crucial month of July is just around the corner. Brothers, use your hands to make money and give away a free love generator.