Three factors make the market weak
The A-share market is also in a narrow range and volatile trend. It has the will to rise, but is suffering from the lack of leading leaders who can continue to rise. The market is not enthusiastic enough to do more, and it is difficult to gather the capacity to break through the upward trend. There is also the risk of falling at any time, but thanks to the impulse of short-term speculation, it has brought some support to the market. This creates an awkward place where the upward pressure of the market is high and the downward support is available. Although the market ushered in unprecedented easing, it also faced three negative effects of short-term suppression, which made the market weak.
The first negative factor comes from external trade pressure. US Treasury Secretary Yellen said on the 21st that China's production capacity in the fields of electric vehicles, batteries and solar panels has seriously exceeded global demand, and called on the US and Europe to respond in a strategic and united manner. This month's G7 Finance Ministers' Meeting will focus on this topic. Under this strong shareholder, European Commission President Frederick Von suggested that the EU might formally impose tariffs on China's electric vehicles, but the EU would take a different approach from the United States. Von Delain said that if China's subsidies to the electric vehicle industry were proved to be illegal, the EU would impose targeted tariffs. No matter what the final result is, it will bring some negative effects to the market, resulting in the lack of enthusiasm of investors to do more.
The second negative factor comes from the currently popular super long term special national debt. Although bond issuance is conducive to economic growth, it also has a short-term diversion effect. On the 20th, the ultra long term special treasury bonds that attracted much attention from the market were officially sold, and some banks opened their purchase channels to individual investors. By 3:30 p.m., the purchase channel had been closed. It is understood that the sales of banks participating in the sale of national debt are relatively hot, and some banks have sold out within half an hour of several hundred million lines. Then 24 Teguo01 was listed for trading on the 22nd, and was temporarily suspended for the second time in the session, with an increase of 25%. The annual interest rate of 30-year long-term treasury bonds is only 2.57%, which makes the market so popular. It shows that the idle capital of the society can go after the national debt to preserve its value, and is unwilling or afraid to invest in the stock market, which fully fears the stock market.
Third, the capital market itself also contains some hidden dangers, increasing the degree of caution of investors. In the case of a downturn in the international economy, China's economy still maintained a relatively stable growth, but it could not bring benefits to the majority of investors. One of the most important reasons is that there are some moths hidden in the economic body. Recently, a number of lawbreakers have been found out, most of whom are involved in corruption. Li Zhiming, the former Chairman of the Bank of Guizhou, Xu An, the President of the Bank of Guizhou, Liu Xingtai, the Deputy Secretary of the Party Leadership Group of the Standing Committee of Hainan Provincial People's Congress, Lou Wenlong, the former member of the Party Committee of the Agricultural Bank of China, Tang Renjian, the Minister of Agriculture and Rural Affairs, Wang Hao, the Vice Chairman of the CPPCC Jiangsu Provincial Committee, Yang Jie, the Director of the Standing Committee of Tangshan Municipal People's Congress, Li Guifu, the Deputy Director of the Standing Committee of Tangshan Municipal People's Congress, etc, Every lawbreaker brings great losses to the capital market, which also worries investors.
We do not doubt the long-term trend of China's economic development, nor do we doubt the good investment value of the A-share market in the medium and long term. But investors can't understand when the market will rise, and they can't grasp which stocks have investment value. Otherwise, they will lose their money. Therefore, it is necessary to stick to the investment strategy of "trend is king" in specific operation, and be more cautious when you can't see the direction clearly. For example, as long as the current market does not scale up, we cannot blindly go long.
