Today, the transaction volume of A-shares is less than 500 billion. A few days ago, Nvidia's daily transaction volume was 80 billion US dollars when it was at a high point. By comparing them, we can find that the biggest gap between the Chinese and American stock markets lies in liquidity, and the biggest problem of A-shares now is also the depletion of liquidity.
With foreign capital fleeing, institutions selling, public funds redeeming, private funds liquidating, and investors selling at a loss, it is difficult to calculate how much money has been lost from A-shares in the past two years. In any case, it is difficult to change the trend of the broader market by relying solely on the national team's intermittent share purchases.
In fact, there are quite a few people who stay in the market. They have some money in their pockets, but they are afraid of losing money and will not easily increase their positions. In fact, according to historical rules, low volume is easy to produce low prices, but now there are few calls for bargain hunting in the market, and experts and big Vs are also somewhat discouraged. So let it be, quietly waiting for good times to come.
Most of the people who play dead have an expectation in mind, that is, although the A-share market is bad, it will not fall below 2500 points. It is nothing more than wasting time in the range of 2600-3000, torturing investors' patience. But at the same time, the market's expectations for an upward rebound have become pessimistic over time. In the past few years, some people expected it to be as high as 4000, but now the expectation of 3500 has become vague. There are even many people who lie down and play dead and plan to sell at a loss and leave the market once it reaches 3000+.
In recent days, many netizens have left messages asking whether A-shares will never return to 3,000. I am not that pessimistic. 3,000 points is really just a matter of time. But even if it rises back to 3,000 points, what will happen? As long as there is no institutional reform and the overall financing attributes of A-shares remain unchanged, its long-term return rate will not be good.
Fortunately, the real estate market has collapsed, and the rate of return of funds in the whole society is falling rapidly. The rate of return that ordinary people did not even look down upon six or seven years ago has to be endured now. I believe that in the end, some money will be forced to flow back to A-shares, and maybe then it will be time for a counterattack.
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Today I saw a research report from Goldman Sachs. It was very long, so I summarized the key points.
The report analyzes China's seven major industries: photovoltaics, lithium batteries, new energy vehicles, power semiconductors, air conditioners, steel, and construction machinery. The first important conclusion drawn is that in addition to air conditioning and steel, the other five industries have significant overcapacity. The so-called excess refers to the total accumulated demand in the world, which is not as large as the production capacity of a single country in China.
For example, the production capacity of photovoltaics is twice the global demand; for example, the production capacity of lithium batteries is 1.6 times the global demand. Due to overcapacity, the prices of major products have fallen by 10-55% in the past year. The brutal internal competition has caused the profit environment of the industry to deteriorate to varying degrees.
Among these seven industries, Goldman Sachs is more optimistic about photovoltaics and lithium batteries. Some production capacity in the industry is being withdrawn. At the same time, global demand will pick up, and the supply and demand inflection point is approaching. Lithium batteries will bottom out this year, and photovoltaics will bottom out in the first half of next year at the latest.
The demand for new energy vehicles is growing, but production capacity is also growing rapidly, and the intensity of internal competition will further escalate.
The rapid expansion of power semiconductor production capacity and oversupply have led to falling prices, which is a pessimistic view implicitly.
There is a slight overcapacity in construction machinery and steel, but the problem in these two industries is that demand is falling, so profitability may continue to decline.
Air conditioning is the only industry where supply and demand are currently balanced, and its profitability is stable and optimistic.
It should be noted that a large number of products from these industries are exported to Europe and the United States, accounting for 60-80%. If this part of the trade is blocked, it will be difficult for the domestic market to absorb even 1/3 of the production capacity.
So in conclusion, the turning point of lithium mining is imminent, the turning point of photovoltaics is approaching, the turning point of new energy vehicles has not yet been seen, the power semiconductor industry is gradually heating up, there is a structural oversupply of construction machinery and steel, and air conditioners remain in the lead.
In recent years, many industries in the A-share market have suffered from internal circulation, so this report is indeed worthy of attention. It is called "China in Transformation: Focus on the Capacity Cycle". I have uploaded it to Baidu Netdisk. If you are interested, you can pick it up yourself. It is valid for 7 days.
Link: https://pan.baidu.com/s/1y7RRc4c1qXX2kdboklLSjg?pwd=catz
Extraction code: catz
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1. The State Administration of Foreign Exchange updated data on Friday, showing that China's direct investment liabilities in the balance of payments decreased by nearly $15 billion from April to June, and decreased by about $5 billion in the first half of this year. This figure shows that some foreign investors are withdrawing from China. Since 1990, there has been no annual negative outflow in this statistic. I wonder if this year will be an exception.
2. With the continuous increase in supervision, treasury bond futures finally ushered in a significant correction. Today, the main contract of 30-year treasury bond futures fell by more than 1%. This wave of peaking has accumulated a 3% retracement and has fallen to the level at the end of July. It is said on the Internet that some illegal institutions have been restricted from trading functions. I am too lazy to verify it. We retail investors should pay attention to volatility risks.
For your information, the income of bond funds comes from three aspects: first, the interest on the bond itself, which is determined by the face value; second, if the fund manager uses an aggressive strategy, he may use leverage, such as borrowing 2% to buy a 3% bond, so that he can earn a little more interest spread; third, the prices of some forward bonds fluctuate with interest rates, and this kind of gain or loss has a great impact on the volatility of bond funds, so the volatility of long-term bond funds will be significantly greater than that of short-term bond funds.
3. Raw milk is in oversupply in many places, and overcapacity has led to a continuous decline in purchase prices. For the first time, the price of finished milk and raw milk has even been inverted. Dairy farmers are probably losing money. Experts say that in order to break the current situation, it is necessary to reduce production capacity and boost consumption. Boosting consumption is difficult, so it is a test to reduce the production capacity of whoever can't bear it. It is really difficult to have a situation of supply exceeding demand in China. Even if there is, it is only a short-term stage. As long as there is profit, people and money will come to take it soon. If you want to reduce the difficulty of doing business and investing, the most direct way is to reduce the content of medium. This is my most valuable experience in the past two or three years.
That's all. The Olympics closed last night, leaving 10 minutes of performances in Los Angeles. I saw Tom Cruise falling from the sky. He is 62 years old and still very skilled. The performances on the beach in California were Red Hot Chili Peppers, Billie Eilish, Dog and Dre. Many Chinese audiences thought it was too simple and casual. In fact, this is the symbol of West Coast pop culture. They didn't fool around. The performers were either famous or big names. Even if they performed at halftime during the Super Bowl, they would be the finale.
I went to California many years ago and was impressed by the sunshine there. I got sunburned and peeled the next day. I only stayed in Los Angeles for a day and a half, but I am very familiar with this city because there is a game with the highest sales in the world, and the map background is LA. I have played it for more than 500 hours and I am very familiar with it.