Today, A-shares traded 1.86 trillion, with a median increase of 0.66%. What is gratifying today is that both large-cap and small-cap stocks have a balanced increase, with no imbalance in performance.
One important factor is that today, a large amount of capital flowed into consumption-related sectors, with retail up 5.6%, dairy up 5.2%, liquor up 3.4%, food processing up 4.4%, and aquaculture up 2.6%. These sectors, which had lagged behind the market due to domestic deflation and weak consumption in recent years, have collectively rallied today.
Logically analyzing, there are two reasons: one is that as the end of the year approaches, local governments across the country are starting to issue another round of consumption vouchers, leveraging the effect to stimulate consumption. The other is that the market is beginning to accept and believe that the government will indeed implement loose policies next year to stimulate domestic demand, so currently undervalued sectors have the value of being early ambushes.
I prefer to believe in the latter because it has more imaginative space. After three years of stagnation, the consumption sector is expected to welcome a decent rebound. On the other hand, the consumption sector has always been a heavy investment for northbound funds, and the activity in this sector helps to boost foreign investors' confidence in A-shares.
Although this time's zzj meeting did not announce specific figures, it released a willingness to implement loose policies next year in its wording, and market expectations are gradually rising. For example, the most critical fiscal deficit rate, the previous expected range was 3.5-4%, with only a few optimists seeing 4%, but now more and more analysts are beginning to predict it will exceed 4% next year.
Don’t underestimate this difference of zero point something percent because its base is 120 trillion GDP, so even a 0.5% difference is a significant increase in currency.
Additionally, with expectations of a 40-50 basis point interest rate cut next year, when government bond yields drop to 1.5%, it will definitely squeeze some funds out of bank deposits. At that time, as long as A-shares hold their ground and achieve a 10-20% increase, it can trigger a siphoning effect, gradually attracting some funds that cannot resist temptation.
Objectively speaking, A-shares indeed have a poor long-term return rate, but within a certain emotional cycle, they can do anything. So be patient, wait for the next time it misbehaves, and then give the bed to the excited fellow patients.
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1. As the end of the year approaches, more readers are asking about personal pension fund subscriptions. Here’s a simple suggestion: Considering there is a long lock-in period, those with taxable income below 200,000 annually don’t need to subscribe; it’s better to invest in other accounts. 200,000 is a threshold; subscribing to personal pension funds is only valuable for those with taxable income above 200,000, and the higher the income, the higher the tax avoidance value. Especially for high-income individuals earning over a million a year, subscribing is like getting a 50% discount—don’t miss out.
Regarding what to specifically subscribe to in the pool, it's up to you. If we take 10, 20, and 30 years as measures, insurance, A-shares, and government bonds might be about the same, but at this point in time, I believe the cost-performance ratio of A-shares might be a bit higher because government bonds, insurance, and money market funds are all at historically low yield ranges.
2. The Nasdaq has broken through 20,000 points for the first time, setting a record high. Individual stocks like Tesla, Google, Amazon, Meta, and Netflix have also reached record highs. Due to Buffett's previous reduction of Apple shares, this caused some psychological pressure among those copying his trades. Objectively speaking, Buffett's sale of Apple at that time was a loss; the average price of the largest reduction in the second quarter was around 186 USD, while the latest stock price is 246 USD.
I also reduced some Apple shares at 230, but the funds I released were used to increase my position in the S&P 500 index fund, and this wave of gains has been decent. My plan for the US stock market is to hit the peak without predicting the top; I can tolerate a drawdown and will retreat when the weekly line breaks the MA20, which will return some profits, and I’m okay with that.
3. The tenth batch of national centralized procurement has officially started, and we are hearing various news about price reductions. Today, the pharmaceutical and medical indices performed relatively weakly, underperforming the market. Several domestic generic drug prices have dropped by more than 90%. Previously, foreign pharmaceutical companies sold pills for 8-9 yuan, but this time the winning bid price is only 1-2 jiao. I think most people will have the same doubts as I do: with a price difference of more than ten times between two types of drugs, is the effect really similar?
I searched and learned that most of the foreign-developed drugs have already passed the patent protection period, so domestic pharmaceutical companies can replicate them based on public information. After successful replication, they need to undergo consistency evaluation to ensure that the efficacy of the replicated drug is similar to that of the original research drug. That's roughly it; wanting them to be completely identical is impossible, but they can be very close. Additionally, many netizens have reported encountering side effects while taking generic drugs, which is also a probability.
4. Today's Nikkei news reports that Japan's average housing price-to-income ratio is around 10, reaching 18 times in the Tokyo area. This means that the average house price in Tokyo is 18 times the average annual income there. A housing price-to-income ratio below 10 indicates less buying pressure and comfortable living, while a ratio of 10-20 gradually increases, and cities with a ratio exceeding 20 experience significant buying pressure. The housing price-to-income ratios in Beijing and Shanghai are around 25, and the highest city in China is Shenzhen, with data for the first half of the year around 35, though the latest figures shouldn't be that high.
That's it for tonight.