2023-04-23 16:00:00
Markets price in May rate hike ahead of schedule
The U.S. stock market has been depressed recently, with little change in several trading days. Last Friday, the Dow index rose 22 points to close at 33808 points, the S&P 500 index rose 0.1% to close at 4133 points, and the Nasdaq rose 0.11% to close at 12072 points . All major U.S. stock indexes closed lower during the week, and the Dow Index fell 0.2%, ending its four-week winning streak. The tech-heavy Nasdaq was the biggest loser, down 0.4%, while the S&P lost 0.1%.
The newly announced U.S. services PMI hit a 12-month high of 53.7, while the U.S. manufacturing PMI hit a six-month high of 50.4. According to a Bloomberg survey, economists expect the U.S. service industry PMI to be 51.5, and the manufacturing PMI to be 49. The actual data is higher than the expected data.
The U.S. stock market is waiting to see where the interest rate will go, while the stock markets in China and Hong Kong have an additional unfavorable factor, that is, the U.S. has increased its pressure on the mainland’s high-tech industries. Although U.S. Treasury Secretary Yellen said in a soft stance that China and the U.S. should cooperate, the U.S. continues to make moves, planning to restrict U.S. companies from investing in China’s key technology fields. It once fell below 20,000 points in one trading day, and semiconductor and artificial intelligence (AI) stocks became the hardest hit areas. The Hang Seng Index finally closed at 20075 points, a cumulative loss of 363 points for the week;
Inflation is tenacious, political tension is unfavorable to the new economy
Since Trump took office and adopted a tough stance once morest the mainland, it has had an impact on US-funded funds buying Hong Kong stocks. An executive with an investment relationship with a large company said that state-owned enterprise stocks suppressed by the U.S. government are of course not allowed to buy, and pension funds related to the U.S. federal government would not buy Hong Kong stocks in general. To bear the risk of suppression, it is better to buy less. He believes that this mentality will only be strengthened in the future, and will not be alleviated. This will affect the “hemisphericization” of investment intentions for companies listed in Hong Kong.
The intensified confrontation between East and West will not disappear in the foreseeable future, and every link from production to investment will change. In the past, the United States and Europe transferred production to the mainland, enjoying cheap and efficient productivity, so that the West would not be troubled by inflation under the big silver paper. Now the direction of global cooperation is reversed. The United States and Europe first seek alternative production countries; At present, the United States may enter a recession, but some analysts still warn that they should not be overly optimistic regarding the fall in prices.
In the face of stubborn inflation and geopolitical tensions, the global stock market lacks the conditions for a sharp rise, and different sectors will have their own trends according to industry conditions. With high interest rate and continuous technological struggle, the new economic sector, which was hyped up before the epidemic and the Russia-Ukraine war, is the most troubled. With the Hang Seng Index retesting 20,000 points, the KCI stocks are weak once more. Alibaba (9988) fell back to its lowest level in recent months, closing at 87.95 yuan; Meituan (3690) closed at 137.7 yuan.
Resource-producing countries free from Western shackles
Unlike technology and Internet stocks, chip stocks, which are also in the technology category, have been ups and downs recently. Chip stocks that were originally speculated in full swing fell sharply on the last trading day following it was reported that the United States restricted American companies from investing in China’s semiconductor, AI and other technologies. Chip (981) plunged 9% in one day to 23.25 yuan, making it the worst performing blue chip stock. Huahong Semiconductor (1347) closed 2% lower at 36.7 yuan; SenseTime (020) jumped 11% to 2.42 yuan; Chuangxinqizhi (2121) fell 4.3% to 19.66 yuan. SenseTime hypes the concept of robots. At the beginning of the week, it hit a high of 3.7 yuan, but followed by major shareholders selling goods, and then fell sharply for days following encountering bad news, and the high chasers were devastated. The technology strength of this stock is not bad, but its commercialization ability has yet to be proven. In addition, major shareholders including SoftBank will cash out whenever they have the opportunity, so it is best to buy at a low price.
The situation of chip stocks is to seek breakthroughs in difficulties. Mainland chip stocks lag behind their international peers in terms of technological level. When confronted with U.S. technology restrictions, development becomes half the effort. The biggest advantage is the market support of the mainland as the world’s factory. In chip localization, it is not the general chip market of high-end 7nm or below process. It is still very big. After the central government made up its mind to use domestic products, there is a strong demand for domestic chips. In addition, Grandpa has changed his strategy and will turn to be led by enterprises and invest money for large chip companies to conduct independent research and development. Therefore, when the bad news falls deep, You can pay attention to the chance of speculation rebound.
Under the long-term global economic cooperation, coupled with the decline in the purchasing power of banknotes, there are signs of capital flowing into mainland state-owned enterprises, including mainland metal mining stocks. As geopolitical risks rise and the hegemony of the West, especially the United States, declines, the autonomy of developing countries with resources has increased, which can be seen from the fact that oil-producing countries are gradually breaking away from the shackles of the United States. Earlier, Chile, the world’s second largest lithium producer, announced that it would nationalize its domestic lithium industry in order to promote the economy and protect the environment. Lithium mining stocks listed in the United States fell sharply on Friday following the news was announced. Chilean lithium miner SQM (Chile Chemical Mining Company) shares fell sharply, and American lithium miner Albemarle also fell 10%.
Chile is rich in lithium reserves, ranking among the top in the world, and is the second largest producer following Australia. Chile currently authorizes two private companies to exploit lithium resources through a concession development contract. The policy change will have an effect on lithium supply and even the global electric vehicle market. Global resources have been misallocated in the past, and the countries that use them and the countries that produce them are often not in the same geographical location. Enterprises that exploit resources have to rely on the political and economic strength of the country as a backing to protect their interests. It is conceivable that if the United States and Britain were still leading the world a few decades ago, they would Or the battery industry is in the hands of important multinational companies, and the Chilean leader who proposed nationalization will certainly not have a good life.
Development of mineral deposits requires state support
In the past, the West was strong and powerful, with colonies all over the world. Many mining giants were American and British companies. After decolonization, although the West might not directly control the mining areas, they were still able to suppress the price of minerals through the operation of multinational companies, but they rose in China. With the addition of competition, this relationship is likely to change. Most of the metal mining companies in the Mainland have a national background. Whether they mine domestically or abroad, they are supported by national policies. In an environment of high interest rates and turbulent waves, it is difficult for the stock market to rise in an all-round way. When the new economy enters the plateau and melee, if you want to bet, state-owned enterprises and old economy companies with resources are worth becoming part of the investment portfolio.
Jin Riku
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