[ abstract ]Zhao Yaoting said that market participants can expect that the lower interest rate will last longer, which is the starting point of the "recovery" of market transactions that he has always considered, including a moderately positive sloping yield curve, a weaker dollar, a stronger commodity price, better performance of corporate credit relative to government bonds, and outstanding performance of the stock market. Compared with other regions, Asian economies are more cyclical, and Asian stock markets should benefit more from this investment cycle.
Investors in the US stock market who have not yet enjoyed enough honey had another night of panic on the 25th.
In the same day's trading, the yield of the benchmark 10-year U.S. government bond hit a one-year high of 1.614% in the intraday trading, and hit 1.5% for the first time since February 2020 at the close.
According to the data calculated by Luft Datastream, the dividend yield of the S&P 500 index is 1.45%. At the end of March last year, the dividend yield of the S&P 500 index reached 2.76%, the highest premium over the yield of 0.76% of 10-year US bonds at that time.
This means that the S&P 500 dividend yield advantage over the benchmark US bond yield has disappeared.
"The market is volatile. The rise in bond yields puts pressure on stocks, especially growth stocks," said Sebastien Galy, macro strategist at Nordic Asset Management.
As of the close on the 25th, the Dow had closed 1.75% lower at 31402.01; The S&P 500 index fell 2.45% to 3829.34; The NASDAQ closed 3.52% lower at 13119.43.
Among them, the Dow and the S&P 500 index recorded the largest one-day decline since the end of January. The Nasdaq suffered its biggest one-day decline since the end of October last year.
Source: Wind
The S&P 500 technology sector index fell 3.5% and the communication services index fell 2.6%, both of which are the sectors driving the stock market up in 2020.
In the US stock exchange on that day, some growth stocks with strong gains were sold off, with technology stocks bearing the brunt. Apple, Amazon, Microsoft, Alphabet, Facebook and Netflix fell between 1.2% and 3.6%.
In addition, Tesla fell by more than 8% and has fallen into a technical bear market.
Source: Wind
Despite the sharp decline of growth stocks, the retail Baotuan Game Station once again soared. After doubling the previous trading day, it once again soared nearly 90% on the 25th, and finally ended up 18.6% higher.
However, some institutions believe that the policy orientation of the Federal Reserve will become an optimistic factor.
Federal Reserve Chairman Powell said at two hearings of the US Congress this week that the US economy has still not recovered to its pre epidemic level, inflation is still below the long-term target of 2% in general, and economic stimulus measures will not be withdrawn in the near future. This also once became a turning point for the sentiment of the US stock market.
Joel L. Naroff, president and chief economist of Naroff Economic Consulting Company, told the Shanghai Securities News that enterprises have become vibrant, the government will soon pass a new large-scale stimulus bill, and the Federal Reserve has also promised to maintain sufficient liquidity for a long time. Therefore, there is sufficient reason to believe that optimism is not irrational.
Before Powell's speech on the 23rd, after the opening of the three major U.S. stock indexes, the decline of the NASDAQ once expanded to 3%, and the S&P 500 index and the Dow index fell more than 1% in the session. But then the market seemed to be injected with a stabilizer. By the end of the day, the Dow and the S&P 500 had risen slightly, while the decline of the Nasdaq had narrowed to 0.5%; The decline of individual stocks that suffered heavy losses also narrowed in succession.
Some industry insiders believe that the Asian market needs no more consideration.
Zhao Yaoting, global market strategist of Kingsoft Asia Pacific region (excluding Japan), said that as investors assess whether central banks will start to adopt new interest rate policies and the impact of higher discount rate on stocks, the rise of yield will undoubtedly delay the rise of stock markets in Asia and other regions of the world. However, in recent years, the rise of US government bonds and the rebound of Asian bull markets have also occurred simultaneously, for example, in 2016-2017.
"This situation also includes new monetary policy changes, which investors should consider together. The Federal Reserve has implemented a new average inflation targeting system, indicating that even if inflation exceeds the ideal 2% target, the central bank will still keep interest rates low."
Zhao Yaoting said that market participants can expect that the lower interest rate will last longer, which is the starting point of the "recovery" of market transactions that he has always considered, including a moderately positive sloping yield curve, a weaker dollar, a stronger commodity price, better performance of corporate credit relative to government bonds, and outstanding performance of the stock market. Compared with other regions, Asian economies are more cyclical, and Asian stock markets should benefit more from this investment cycle.
