The capital market was very calm this weekend and nothing major happened, but it’s not good to have a blank night report. I’ll go through a few of them so you can get an impression.
1. At the regular policy briefing held by the State Council Information Office on Friday, the 22nd, a reporter asked how China viewed the possibility that the United States would impose a 60% tariff on China. The spokesperson replied that China's economy has strong resilience, great potential, and sufficient vitality to withstand and resolve external shocks. The US move will cause American consumers to pay higher prices and lead to rising inflation.
This incident has a potential impact on the stock market, because there was a group of people in the capital market who believed that Trump would raise tariff barriers after taking office. As a hedge, the Chinese government is likely to introduce policies to stimulate domestic consumption. Judging from the response from the State Council Information Office on Friday, China is not worried about the US tariff increase and is relatively confident, which makes some analysts realize that the expected stimulus policy may not be realized.
Although there is no evidence that Friday's sharp drop was directly related to this incident, based on the information collected so far, nothing had a greater impact on Friday than this incident.
2. Trump nominated Scott Bessant as the next US Treasury Secretary. This guy is a billionaire himself. He graduated from Yale University and has been involved in the Wall Street financial circle since the 1980s. He worked in Soros's fund company for 20 years (1991-2011) and was deeply involved in every financial battle during Soros' peak period. In 2015, he founded his own investment company, focusing on macroeconomic trend investment. He has a close personal relationship with Trump and is an economic advisor to the election team.
He advocates tax cuts, the development of traditional energy, and supports the dollar to remain strong, believing that this will help the United States maintain its international leadership and the dollar's continued status as the world's reserve currency. He plans to reduce the fiscal deficit rate to 3% by 2028 and stimulate the US GDP to reach 3%.
What surprised me was that he was a homosexual and had come out very early. His husband was a former New York City prosecutor and they had two children. It was interesting that although Trump publicly raised the banner of opposing LGBT, a core member of his team was a well-known gay man.
I tried to search for the new finance minister's views on China. He recognized the potential of the Chinese economy, but at the same time believed that the Chinese economy was not market-oriented enough and had many characteristics of a planned economy. In order to prevent the impact of the Chinese economy, he supported gradual tax increases. In addition, he also said that China's regulatory environment is unpredictable and that investment requires strict risk control.
3. The Ministry of Foreign Affairs has expanded the number of unilateral visa-free countries to include Bulgaria, Romania, Croatia, Montenegro, North Macedonia, Malta, Estonia, Latvia, and Japan. The country with the greatest impact is definitely Japan, because the traffic of the other countries combined is not as much as Japan. In the future, people from these countries can enter China without a visa and stay for 30 days, which is conducive to tourism, visiting relatives and friends, and business visits, thereby increasing consumption by foreigners in China.
Many people have questioned online why visa-free policy should be adopted for Japan. These people are immersed in certain emotions all day long and cannot even understand the will of the country.
4. The gold price rebounded continuously and returned to around 2700. Because it did not fall to my psychological range, I did not increase my position this time. The possibility of a sharp drop in gold in the short term is small, and there is still room for a slow bull market next year.
5. The media summarized the highlights of this round of market. Since September 24, the market value of A-shares has increased by 17 trillion yuan, and the financing balance has reached a 9-year high. This is actually to say that the current situation is very good, but the article was published after both A-shares and Hong Kong stocks fell sharply, which seems not very convincing. The more valuable information I see in the article is that the daily turnover in these 39 trading days is 1.98 trillion yuan, so 2 trillion yuan is almost the passing line of volume. If the market wants to return to normal, the turnover needs to maintain a level of 2 trillion+.
That's basically it. Is it news that Lao Hu made a profit of 30,000 after his comeback? Haha, it's just to increase the anxiety of stock investors. The decline on Friday made the medium-term trend of A-shares worse, but I didn't have any special operations. I never planned to increase my position. At most, I would reduce my position and sell when the price rose to the ideal level. Now that it hasn't risen to that level, I will just wait and see.
I think the reason why I have a good attitude, or enough patience, is that I transferred my positions a few years ago and did not choose to hang on to the A-shares tree. If readers are heavily invested in A-shares, they must be frustrated and uncomfortable now. There is no solution to this, but you can make targeted adjustments the next time you have the opportunity to transfer positions.
