What is the technical bear market of the Dow Jones? What impact does the sharp drop in US stocks have on A shares? As the oldest stock index in the world and the most influential and authoritative stock index in the US stock market, the Dow Jones has always received the attention of investors around the world. Recently, US stocks have fallen one after another, and the Dow Jones technical bear market has occurred. What is the specific situation? Does it have an impact on A-shares? Let's take a look.
On the morning of the 11th local time in the United States, the US stock market fell sharply after the opening, and the intraday decline further deepened. The three major indexes once entered the "technical bear market" range. At the close, Dow Jones Industrial Index closed at 23553.22 points, down 5.86%; the S&P 500 closed at 2741.38 points, down 4.89%; and the Nasdaq closed at 7952.05 points, down 4.70%. Among them, the Dow Jones Industrial Average has fallen by more than 6,000 points from its recent high of 29,568.57 points, a drop of more than 20%, officially entering a "technical bear market".
The so-called bear market refers to the stock index falling by more than 20% from its recent high. The recent intraday highs of the Dow Jones Industrial Average, Nasdaq and S&P 500 are 29551.42 points, 9817.18 points and 3386.15 points, respectively, which means that the bear market dividing lines of the three are 23654.85 points, 7870.69 points and 2714.81 points, respectively. In terms of
sector and individual stocks, energy stocks fell across the board, ExxonMobil fell 3.29%, Chevron fell 2.21%, ConocoPhillips fell 6.65%, Schlumberger fell 4.45%, and EOG Energy fell 6.44%.
financial stocks also fell collectively, JPMorgan Chase fell 4.72%, Goldman Sachs fell 6.78%, Citi fell 8.62%, Morgan Stanley fell 6.71%, Bank of America fell 4.02%, Wells Fargo fell 7.88%, and Berkshire Hathaway fell 3.39%.
Large technology stock fell across the board, with Apple falling 3.47%, Amazon falling 3.75%, Netflix falling 3.9%, Google falling 5.04%, Facebook falling 4.46%, Microsoft falling 4.53%.
On the same day, European stock markets fell slightly. Among the three major European stock indexes, the UK's FTSE 100 index closed at 5876.52 points, down 1.40%; the French CAC40 index closed at 4610.25 points, down 0.57%; the German DAX30 index closed at 10438.68 points, down 0.35%.
The follow-up trend of US stocks
Goldman Sachs chief U.S. stock strategist David Kostin said that the longest bull market in U.S. history will soon end, and US stocks will experience greater losses than in the past three weeks. Goldman Sachs expects the S&P 500's target point in the middle of this year to be 2450 points, 15% lower than the closing price on the 10th and 28% lower than the previous high.
Shen Zhengyang, senior investment consultant of Northeast Securities, pointed out that in recent trading days, US stocks plummeted and rose sharply and repeatedly rotated. The short-term high volatility means that the US stock market has not yet shown signs of stabilization. US stocks may inevitably face the risk of an economic recession, and the US stock market trend may inevitably follow the ABC three-wave adjustment pattern.
Senior macro analyst Zhang Jingjing of GF Securities believes that there may be four situations in the next 1-2 months:
Situation 1: OPEC+ returns to the negotiating table, the production cut plan is finally implemented, and the US stock market is expected to stop falling;
Situation 2: OPEC+ meeting is deadlocked, but the epidemic data in Europe and the United States has not deteriorated significantly, and US stocks are expected to bottom out in March and stabilize in April.
Situation 3: OPEC+ price war continues, the epidemic in Europe and the United States worsens, and the decline in US stocks continues to the second quarter.
Situation 4: OPEC+ price war escalates, and the market has a short-term liquidity crisis. At present, this situation is still a small probability, but once you enter this mode, there is a risk of adjustment for safe assets.
The impact of the Dow Jones technical bear market on A-shares
Yang Delong believes that the impact of the plunge in US stocks on A-shares is short-lived. In the long run, the plunge in the US stock market will help investors to make profits from US stocks and buy at the bottom of A-shares. In addition, the rise of A-shares itself also has a relatively good foundation. The base of A-shares is low, and the Shanghai Composite Index is still at 3,000 points in ten years. Coupled with the large transfer of residents' savings, that is, as the effect of real estate regulation gradually emerges, the transaction volume of second-hand houses has dropped sharply, and the purchase and loan restrictions have led to the unprofitable housing speculation, and residents' savings will be transferred to the stock market in large quantities.
Yang Delong believes that the A-share market will usher in a golden decade, and the next ten years will be a carnival for stock investors and a feast for value investors.The US stock market is at the top of the ten-year cycle expansion cycle, while the A-share market is at the bottom of the ten-year cycle. This is the main factor in the relatively large differences in the trends of the Chinese and US stock markets.
Shen Zhengyang said that although A-shares have certain resilience and independence in the short term, there is uncertainty as to whether these external risks have been fully included in the pricing of A-shares. And, there is a high possibility that there is a mispricing.
Shen Zhengyang believes that A-shares have not yet reflected the risks of gray rhino. It is expected that the reserve requirement ratio cuts and interest rate cuts will be implemented soon in the short term, but the stock market may still lack upward attack power. Therefore, the current space for market game is getting smaller. Generally speaking, although the closing price in March is not too ugly, that is, the short-term view of the support around 2900 points may have a chance to try again.
Dow Jones Industrial Average
Dow Jones Industrial Average (DJIA, referred to as "Dow") is one of several stock market indices created by Charles Dow, the founder of the Wall Street Journal and Dow Jones . This index is one of the oldest U.S. market index as a measure of the development of industrial composition in the U.S. stock market. To this day, the average index includes the largest and most well-known listed companies in the United States in 30 years. Although the word "industry" is mentioned in the name, its actual meaning to history may be more than actually compared - because most of today's 30 companies are no longer related to heavy industry. Due to the effect of compensating for stock splits and other adjustments, it is currently only a weighted average and does not represent the average of the value of the component stocks.
Source: China News Network
