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Original title: Zheng Yan Sees the Market: The Outside Is Uncertain and the Empty Side Temporarily Dominates
Last week, the A-share market showed a relative balance between longs and shorts. In the first four days, longs had a slight advantage, but fell on Friday, ultimately causing most stock indices to tumble throughout the week. The Shanghai Composite Index fell 1.63% to 3,224.54 points. The rest of the stock indices fell very little, with the Shenzhen Main Board, Small and Medium-Sized and Chuangzao Composite indices falling less than 0.15% for the week, which is almost negligible. Additionally, the Science and Technology 50 Index, which fell in previous weeks, rebounded sharply by 4.29% last week.
Last Friday, tech stocks became one of the rarest gains against the trend. In addition to the technology sector, the new energy vehicle sector, which is clearly supported by policy, is also strong, with the BYD leader being particularly strong. However, there are also top stocks, such as Yili, that have collapsed because the quarterly report is not what was expected.
If you consider that the external market fell sharply last week, A shares did quite well, especially when A shares were issued with large market cap stocks. Both Ant Group’s A and H shares have been issued, and future listings may cause stock market disruptions. Ant Group has a wide range of winning lots, and A shares may still be under pressure to win the lottery to make payments this Monday. Companies like Ant Group have relatively new businesses, and there are even many disputes, making it much more difficult for institutions to value them than traditional companies.
The initial issuance of SMIC had little impact on the stock index, but the stock index fell sharply on the day of listing. Some investors may learn a lesson, so this time the selling pressure may have a chance to release some of it ahead of time. Investors may not be able to learn lessons in the short term, on the contrary, they may be more aware, that is, they must be vigilant for unexpected changes after the game from all parts of the market.
Last Wednesday and Thursday, the net inflow of funds from North China resumed. However, the Hong Kong stock market fell with US stock index futures late last Friday afternoon. The net outflow of funds from North China was nearly 6 billion yuan that day. Peripheral stock markets fell first due to the out-of-control epidemic, and second, the US elections looked more “stagnant” than before. In summary, the sentiment of risk aversion in the external market has increased strongly, which can also be seen in the rebound of the dollar. This week’s US presidential elections have reached a critical period. Generally speaking, whether the result is red or blue, it is important to have a “timely” result rather than creating a pure situation such as “close to votes”, which can also induce unpredictable results. So global stock markets, like US stocks, may fall further.
Although there are many shocks in the external environment, investors should generally focus long. In my opinion, even if the external situation develops less favorably, the A shares will fall a bit as a result, but this type of external risk does not appear suddenly. Most people will have two hands to get ready, so the A shares may not drop too low. In addition, the quarterly report has been finalized and unsystematic risks have been significantly reduced, generally favoring long-term design.
In terms of funding, the market funding margin in the past two months has clearly narrowed, but the next big outbreak of the epidemic on the periphery may encourage countries to adopt more relaxed policies. Therefore, even if funding cannot be loosened, there is a high probability that it will not tighten further. The liquidity environment for A shares may improve.
This week’s market trend is temporarily uncertain, which of course is mainly due to the US elections. Investors temporarily strengthen their defense strategically.
