Each editor: Lu Xiangyong
Under the gaze of the world, US stocks once again allowed investors to witness history.
Investors continued to sell off stocks even as the Federal Reserve launched a massive monetary stimulus program on Sunday to curb the impact of the coronavirus outbreak on economic growth.
The three major U.S. stock indexes plummeted at the opening on the 16th. The S&P 500 index fell more than 7%, triggering the circuit breaker mechanism and halting trading for 15 minutes. This is the third circuit breaker in US stocks in two weeks.
As of the close, all three major stock indexes closed sharply lower. The Dow Jones Industrial Average price index closed down 2,997 points, or 12.9%, the largest one-day decline since 1987. At the same time, the nearly 3,000-point drop was the largest point drop in history; The Nasdaq closed down 12.32%, and the S&P 500 index closed down 12.32%. Down 11.98%. Technology stocks fell sharply, with Tesla falling about 17% and Apple falling about 13%.
Investment institutions have expressed pessimism about the market prospects. Goldman Sachs predicts that the decline is far from over. It is expected that the S&P 500 Index may fall 41% from its highest point to around 2,000 points.
In addition to U.S. stocks, Brazil’s stock market also plummeted more than 12% at the opening on Monday, triggering a circuit breaker. This is also the fifth time in two weeks that the Brazilian stock market has triggered a circuit breaker.
Canada's SP/TSX index fell 12% intraday on Monday, triggering a circuit breaker.
As of the close, the British FTSE 100 index fell 4.01%; the French CAC40 stock price index fell 5.75%.
For the third time recently, U.S. stocks opened with a circuit breaker
On the evening of March 16, Beijing time, U.S. stocks opened sharply lower, the Dow Jones index fell 9.71%, the Nasdaq index fell 6.12%, and the S&P 500 index fell 8.14%. The S&P 500 index fell more than 7%, triggering the third circuit breaker in recent times, and US stocks suspended trading for 15 minutes.
After trading resumed, the decline in U.S. stocks continued to expand, with the Dow Jones Industrial Average falling more than 12% at one point, the largest decline since 1987.
This is the fourth time in the history of the US stock market that a circuit breaker has occurred. The second and third times occurred on March 9 and March 12 last week respectively. The first real meltdown in the history of the U.S. stock market was 23 years ago on October 27, 1997, when the Dow Jones Industrial Average plummeted 7.18%.
In the past week, the US stock market has experienced two meltdowns on Monday and Thursday, which is very rare and has completely reduced "Black Monday" to "Black Week". Over the past week, the Dow Jones Index has fallen by 10.36%, the Nasdaq Index has fallen by 8.17%, and the S&P 500 Index has fallen by 8.79%.
html At the close of trading on 016, all three major U.S. stock indexes plummeted by more than 11%, with the Dow Jones Industrial Average plummeting nearly 3,000 points, the largest point drop in history; the Chicago Board Options Exchange (CBOE) fear index VIX rose by 42.99 points to close at 82.69, setting a new closing record high.html On 016, not only US stocks plummeted, but Asia-Pacific stock markets also ended with sharp falls. The Nikkei 225 Index closed down 2.46%; South Korea's Composite Index fell 3.19%; Australia's ASX200 Index closed down 9.7%, the largest decline since June 1992; New Zealand's NZX50 Index fell 3.6%; the Hang Seng Index closed down 4.03%; A shares The Shanghai Composite Index fell 3.4%. European stock markets have also been flooded with disasters. As of the close, Britain's FTSE 100 index fell 4.01%; France's CAC40 stock price index fell 5.75%, and Germany's DAX index fell 5.31%.
Why don’t financial markets buy into the Fed’s fault?
The US stock market circuit breaker has attracted much attention, mainly due to the background of the Federal Reserve's emergency interest rate cut.
In the early morning of March 16, Beijing time, the Federal Reserve announced that in view of the impact of the coronavirus that will affect economic activity in the short term and pose risks to the economic outlook, it decided to reduce the federal benchmark interest rate by 100 basis points to 0% to 0.25%. At the same time, it announced the launch of a quantitative easing policy, and a US$700 billion quantitative easing plan will be launched in the next few months.
The Federal Reserve originally intended to rescue the market, but its emergency interest rate cut, which exceeded market expectations, objectively aggravated market panic, so much so that it set off a selling wave in the global market. Just before the opening, futures of the three major U.S. stock indexes fell by more than 4.5%, triggering trading restrictions again.
Traders working at the New York Stock Exchange on March 16. Image source: Xinhua News Agency Guo Keguo
Regarding this wave of operations by the Federal Reserve, Ren Zeping, chief economist of Evergrande Group, said on his Weibo, "I just say: 'Drink poison to quench thirst.'" He also said that the United States is "going crazy and destroying its martial arts by doing this and depleting its currency." "
Chief Economist of Zhongtai Securities Li Xunlei also said, "Whether the plunge in U.S. stocks will trigger a crisis is highly controversial. But the U.S.’s response to the stock market decline has been greater than the measures taken in previous crises—zero interest rates, 700 billion! The Fed is completely treating the market as if it has collapsed. See you soon! It is unclear whether the stock market will give face, but the golden bull should be able to continue. "
" cut interest rates by 2.0, which will relieve worries about liquidity but not worry about US stocks. "The Huatai strategy team believes that compared with the emergency interest rate cut on March 3, the Fed's policy mix has been significantly strengthened this time. In addition to supporting the real economy (rate cut + QE), it has also adopted unconventional means to alleviate the US dollar liquidity run ( After the announcement, S&P 500 futures fell to the circuit breaker, and the two emergency interest rate cuts caused short-term panic in the market. The panic is increasing instead of decreasing, which reflects the market communication problem of the central bank's policy signals. However, in the medium term, the panic caused by the information impact is likely to gradually weaken.
A joke is circulating in the market - an army is preparing for the position, and I heard that there is an army ahead. The enemy has a large force, but there are different opinions on the exact number. Some say it is one company, some say it is two companies, and some say it is one company. The discussion went on and on, and everyone was a little numb. At this time, the superiors suddenly issued ammunition and weapons to resist an army...
Chief Economist of ICBC International Cheng Shi said that it was a one-time attack. If the light bullet fails to kill the enemy, it will put itself in danger. Cheng Shi believes that the Fed's action. The intensity is less than expected and the speed is much faster than expected. Cheng Shi pointed out whether the Fed's gamble is a "surprise" or "scare" for the market. After interest rates drop to zero, are negative interest rates still far away? On the same day, pedestrians walked past the closed New York Public Library in New York, USA. Photo source: Xinhua News Agency. Photographed by Guo Ke
"Stock God" Buffett was also tricked
"I have lived to be 89 years old and have never seen such a scene. "Stock God" Warren Buffett said this in an interview with foreign media when talking about the recent financial market. This time is as scary as "Black Monday" in October 1987.
13, forwarded by Nasdaq official website The article also @Buffett: "Now is the time for Buffett to be greedy." Buffett once said: "Be fearful when others are greedy, and be greedy when others are fearful." "
The latest data shows that while the "stock god" shouted "see you soon", he also took action "greedily".
According to the U.S. Securities and Exchange Commission's disclosure on March 13, Buffett increased his holdings of Bank of New York Mellon on March 3 (BNY Mellon), after increasing its holdings, it holds 389 million shares of Bank of New York Mellon, accounting for more than 10% of the total share capital. According to the estimate of the closing price of 38.83 US dollars per share, the stock god may spend 359 million US dollars.
In addition, Buffett also. Buffett's Berkshire Hathaway increased its holdings of Delta Air Lines on February 27, at $45.48 per share. At a price of $47.14, 976,507 shares of Delta Air Lines were bought. On
16, Bank of New York Mellon closed at $29.18, which has fallen 41.6% this year.
Delta Air Lines has also fallen from 46 on February 27. The dollar fell to the current level of $35.81. This means that Buffett. The newly held shares of Bank of New York Mellon and Delta Air Lines were trapped.
Trump : National quarantine is not considered for the time being.
At 15:30 pm local time on the 16th, the White House held a press conference to announce stricter regulations. epidemic prevention guidance, the market fell sharply
. Trump said at the White House press conference that the epidemic may last until July and August. He also recommended that Americans should not engage in gatherings of more than 10 people in the next 15 days, avoid gatherings in restaurants and bars, and avoid visiting relatives and friends. He Said, "Each of us plays an important role in blocking the spread of the epidemic."
The guidance also requires states in the United States where community infections have occurred to close bars, restaurants, and other public facilities, but this is not a mandatory measure.
At the press conference, Trump said that based on the current situation, national quarantine will not be considered for the time being, and the new crown pneumonia epidemic may continue until July and August or later. In addition, Trump said that the U.S. economy is likely to experience a recession, but currently, controlling the spread of the epidemic is the focus of all levels of U.S. governments.
According to CCTV News citing CNBC, the U.S. Department of Defense announced on the 16th that in order to prevent the new crown epidemic, Defense Secretary Mark Esper and Deputy Secretary David Norquist will be quarantined for protection. Starting from the 16th, the two top officials of the Ministry of Defense will be in "physical isolation". Currently, there are 37 confirmed cases of new crown in the Pentagon.
In addition, some states in the United States have begun to implement curfews. In response to the COVID-19 epidemic, Governor Murphy of New Jersey, USA, announced that the state will implement a curfew starting from the evening of the 16th local time. The curfew will be from 20:00 to 5:00 the next morning. This curfew will continue for the foreseeable future. some time.
html On March 15, in New York, the United States, the streets where Broadway theaters are concentrated were almost deserted due to canceled performances. Image source: Xinhua News Agency Photo by Guo Ke In such a "big era", can A-shares be safe?
html On March 16, domestic A-shares opened higher and moved lower, and fell sharply in the afternoon to expand the losses. Finally, the Shanghai Composite Index closed down 3.40% for four consecutive negative days, at 2789.25 points, falling below 2800 points; the Shenzhen Component Index closed down 5.33%, at 10253.28 points. ; The GEM index fell 5.90% to 1910.77 points. Among the northbound funds, the net outflow of Shanghai Stock Connect was 4.871 billion, and the net outflow of Shenzhen Stock Connect was 3.939 billion.In the early morning of the 17th, Beijing time, the FTSE China A50 Index futures closed down 2.67% in night trading.
research institutions generally believe that at present, the global capital market is highly volatile, and it is difficult for A-shares to move independently. However, the resilience is better than that of the external market, and A-shares may continue to fluctuate in the short term.
Haitong Securities believes that A-shares are stronger than U.S. stocks due to three major factors: China’s more effective prevention and control of the epidemic, better profit data of listed companies, and lower A-share valuations. The mid-term market trend depends on internal factors; the epidemic will not change The bull market trend has affected the pace of the bull market, and the short-term market still needs time to consolidate and gain momentum; focusing on the whole year, the key is to look at profits, and technology + securities companies that are in line with the direction of transformation are still the main line.
One signal worth noting is that when overseas markets fluctuate significantly, foreign-funded institutions have quietly scanned Chinese companies.
Hong Kong Stock Exchange disclosure information shows that on March 10, JPMorgan Chase significantly increased its holdings in 15 Chinese companies in one day, including Postal Savings Bank , China Oilfield, Sinopec Refining and Chemical Engineering, etc., and increased its position in Ping An of China. The range is as high as 1.920 billion yuan.
In the context of the US stock market meltdown, diversified allocation is particularly important. This may be the reason why JPMorgan Chase is scanning Chinese companies.
(Daily economic news is compiled from CCTV News, China News Network, China Securities Journal, China Daily, etc.)
Daily economic news
