Chapter 282: When the interim report came out, we found out who was swimming naked
Friday, May 24, 2024.
Last night's financial news was a bit dull, which made people feel a little uncomfortable.
1. The US Markit PMI composite index hit a two-year high in May, and inflationary pressure has increased again. It is predicted that the Federal Reserve will postpone its interest rate cut to around December.
The United States' interest rate cut journey has become an old lady's foot binding, long and boring. On the one hand, the economic data is super good, on the other hand, inflationary pressure is increasing, and on the other hand, there are non-farm data jumping left and right.
It has become almost metaphysics, or the US economy has become a typical case of stagflation. Now, let's wait and see when the relevant data for May comes out next month.
2. Europe and the United States used the interest on frozen Russian assets to support Ukraine, and Russia announced that it would use US assets in Russia to compensate for the losses.
There is no overnight hatred between Russia and the United States, and their mutual countermeasures are becoming more and more efficient.
The EU countries are now being controlled by the United States and watched by the troublemaker Britain, and they are really helpless in confronting Russia.
3. The Japanese yen fell again against the US dollar to nearly 157.
The US dollar index mainly measures the exchange rate changes against a basket of currencies (six currencies), among which the euro has a weight of as high as 57.6%, the Japanese yen has a weight of 13.6%, the British pound has a weight of 11.9%, the Canadian dollar has a weight of 9.1%, the Swedish dollar has a weight of 4.2%, and the Swiss franc has a weight of 3.6%.
In the foreseeable June, the EU should cut interest rates, and it is estimated that the US dollar index will rise again.
By then, there will be another bloody storm in the international arena, and I wonder which country will not be able to withstand it and will be harvested.
4. China, Japan and South Korea met again after four years.
In this era of fierce competition, it is unlikely that anything substantial can be discussed.
Because Japan and South Korea are essentially colonies of the United States, and all political, economic, diplomatic and military affairs are in the hands of the United States.
It would be fine if the three parties cannot reach an agreement. Once something is discussed, there will definitely be trouble in Japan and South Korea. Abe is a lesson learned.
5. High temperatures continue in northern India, with the highest temperatures in many places such as New Delhi exceeding 45 degrees Celsius.
I looked at the weather map of South Asia. In the past few days, the lowest temperature in these areas is 30 degrees Celsius every day, and the highest temperature can reach 46 degrees Celsius, or even around 48 degrees Celsius. It's really like a steamer.
In this kind of temperature, you would probably sweat even if you just lie down, let alone go out to work in the fields.
Perhaps this is also the reason why it has been difficult for advanced civilizations to develop in tropical regions throughout history - it is too hot.
6. Vanke once again applied for approximately 8.8 billion yuan in bank loans, and Fitch once again downgraded Vanke's rating.
Take advantage of the opportunity and the policy to quickly sell your house to reduce your debt. As for making money by buying land and building houses, it is probably impossible within one or two years.
At present, domestic real estate companies are in the stage of deleveraging and selling assets to repay debts. It is very good if they can survive. As for making money, that is a matter for the future.
Perhaps because it is approaching the weekend, today's market is extremely boring.
After opening at 3110.75, the Shanghai Composite Index began to fluctuate. Nonferrous metals rebounded during the session, but yesterday's strong performance in sectors like banking, insurance, liquor, and consumer goods began to decline. The real estate sector plummeted, with the real estate ETF plummeting by more than 3%, Gemdale Group plummeting by more than 7%, and Vanke falling by more than 5%.
After lunch, speculation began on the minor metal antimony in the nonferrous metals sector, with Huayu Mining and Huaxi Nonferrous Metals suddenly soaring...
Just when the market showed signs of recovery, it suddenly fell again, breaking through 3100 points and finally closing at 3088 points.
So far, the Shanghai Composite Index's increase this year has been less than 5%.
The optimism of investors in the past few days has disappeared.
In the forum, some stock investors jokingly scolded: "We heard the bull was coming, but in fact the bull left again, and in the end only a bear was left."
Similarly, Old Chen frowned as he watched the Shanghai Composite Index go through a series of ugly declines, muttering to himself:
"Alas... after a month of this, it's back to the 3000-3100 range. It's all for nothing. Also, Li Feng, look at this Shanghai Composite Index chart. Isn't it an island reversal?"
"The real estate industry has finally finished its charade and is dispersing," Li Feng said, seemingly answering a question that didn't seem to be relevant. "Only when dust returns to dust, and capital, performance, and market conditions are finally aligned, can the market experience a healthy and sustained rise."
“Once the interim report comes out, we’ll know who’s been swimming naked.”
Q&A with stockholders:
1. "Fat Brother Lincheng":
Continue to hold strong cyclical stocks and treat them as fixed deposits.
The risks of stock trading are different from those of deposits. You cannot fall in love with stocks. Once the cycle ends in the future, you must clear your positions with one click.
2. "Dongxuanzhong of Dabian Island":
Dear author, did the Lingnan convertible bond deliberately say that it had no money and was going to default on its debt, causing a double kill of stocks and bonds, making bonds fall even more miserably than stocks, so that investors could convert the bonds into stocks to make a profit without having to pay back the money?
Bank convertible bonds should be distinguished from other types of convertible bonds because banks still guarantee their redemption. As for the method of investing in convertible bonds, it is recommended to buy a book and study it systematically. I have mentioned it before, and now I will introduce "Attack and Defense" and "The Magic of Convertible Bond Investment" as well.
After a quick look, I found that Lingnan convertible bonds are for garden landscape, similar to Oriental Garden. It doesn't seem as complicated as you think. The company probably just has no money. This industry has been very difficult in recent years, and many debts cannot be recovered.
Because many real estate companies are going bankrupt, naturally I would rather die than let my friends die, so I will owe them as much as I can.
3. "Guo's Sundry Shop":
Brother, can you talk about ETF investment knowledge?
I don’t have much investment experience in this area, but the fundamental of investing in this type of ETF is to study the industry’s prosperity, that is, cyclical research.
4. “Mist and Rain with the Wind”
Recently, some real estate policies have been introduced. Will the real estate industry be short-lived like in previous years, becoming a sunset industry that will be hyped up and then end up in a mess?
I think so.
Due to the particularity of the real estate industry (settlement lag), the performance of these real estate companies will definitely not increase significantly in the foreseeable future, at least within one year, or even two years, leading to weakened expectations. Once the expectations are falsified, it will be the beginning of another round of decline.
Observing the situation of the real estate industry, I think there is a good indicator at present, which is to refer to the debt ratio of Hong Kong real estate companies, which is around 35%, and the highest does not exceed 50%.
However, domestic real estate companies and high-quality leading enterprises, such as Vanke A, Poly, and Gemdale, are mostly above 70%, or even higher.
In the future, there will be further deleveraging, which will be a painful process.
It's the weekend now, and fellow stock friends, if you have time, please click here to urge for updates and receive a free copy of "Generate Power for Love".
Your support is my motivation to update.
Also, the market is closed on weekends, so I will stop updating for two days. I will continue updating when the market opens next Monday.
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