China Fund News reporter Kim Yoo-ji
US debt storm is coming, and many people exclaimed that "the doomsday is coming."
. The US stock market did not encounter a "disaster". The Dow Jones Industrial Average even rose nearly 300 points to a new high. The Nasdaq fell by more than 1.76% after the drag on technology stocks, but the closing decline narrowed to 0.59%.
Many analysts remind that there is no need to panic too much about the surge in US Treasury yields. Morgan Stanley pointed out that the Chinese stock market is more flexible in the environment of rising US Treasury yields.
Bitcoin, which once pulled back more than US$2,000 last night, also saw a "deep V rebound" and returned to above US$57,000.
U.S. Treasury yield soared to a year's highest
U.S. stocks have reappeared polarization
On Friday, the 10-year U.S. Treasury yield rose 10 basis points to 1.637%, the highest level since February 2020.
20 US Treasury yields also rose sharply.
U.S. Treasury bond auctions were relatively smooth this week. The market originally expected that U.S. Treasury yields would stabilize. After a big rise on Friday, the 10-year U.S. Treasury bond yields broke through the high set after the 7-year Treasury bond auction on February 25, which really scared many investors.
technology stocks were the first to be hit, and large technology stocks fell on Friday. Apple fell 0.75%, Tesla fell 0.84%, Amazon fell 0.77%, Google fell 2.50%, Facebook fell 2%, Microsoft fell 0.58%, Qualcomm fell 1.34%, AMD fell 0.22%, Netflix fell 0.96%, and Intel fell 0.65%.
US Treasury yields soared, causing technology stocks to fall generally, and the differentiation of US stocks has also intensified. The Nasdaq fell 1.76% during the session, but the Dow Jones Industrial Average rose 300 points.
As of the close, the S&P 500 rose 0.10% to 3943.34 points; the Nasdaq fell 0.59% to 13319.86 points; and the Dow Jones Index rose 0.90% to 32778.64 points.
Pro-cyclical sectors also showed different trends from technology stocks, with sectors such as finance, aviation, and cruise ships generally rising. Goldman Sachs rose 1.96%, ExxonMobil rose 1.08%, United Airlines rose 4.13%, Royal Caribbean Cruises rose 2.53%, Disney rose 0.21%, and Boeing rose 6.82%.
Many popular Chinese stocks listed in the United States pullback
When the Nasdaq fell, many technology Chinese stocks listed in the United States also followed the pullback.
Among the Chinese stocks listed in e-commerce, Pinduoduo fell 0.83%, Alibaba fell 3.71%, and JD fell 6.65%.
Autohome, Baidu and Bilibili, which are about to complete the secondary listing of Hong Kong stocks, fell 4.13%, 2.98% and 0.41% respectively.
New energy vehicle concept stocks also fell slightly, with NIO falling 1.15%, Xiaopeng Motors rising 0.98%, and Ideal Auto falling 1.27%.
, while Chinese stocks in the tourism platform that contain pro-cyclical concepts rose, Tuniu rose 12.28%, and Ctrip rose more than 4%.
Musk is in trouble again
was sued for violating the SEC agreement
Trump "abdicated", Musk succeeded to the throne " Twitter God", and any tweet attracted everyone to drink. The casual speech of the CEO of a company with a market value of 100 billion US dollars has caused a lot of controversy, and some people can't stand it anymore.
On Friday, a Tesla investor sued Tesla CEO Musk and his board of directors in Delaware. The investor said Musk continued to send tweets and that Tesla's board of directors failed to control Musk's online behavior. The complaint believes that this has brought at least potential billions of dollars in liability and market capitalization to Tesla.
Previously, Musk and Tesla's board of directors had reached an agreement with the SEC on the use of social media, requiring Tesla CEO's social media activities to be approved in advance.
The court released at the time listed several items that Musk needed to review before he could publish, including the company's financial status, statements or performance, including financial reports or performance outlook; potential or proposed mergers, acquisitions, disposals, bids or joint ventures; written communication information that had not been published/pre-approved by the company or deviated from the previously published production, sales or delivery data (whether actual, predicted or expected) of the company, etc....
Recently, foreign media broke the news that the US SEC was investigating Tesla CEO Musk's tweet about "Dogcoin" on Twitter.
Bitcoin plummeted by 2,000 US dollars
Late night, there was a deep V rebound
cryptocurrency exchange giants were investigated, and Bitcoin once pulled back more than 2,000 US dollars. In the early morning, the price of Bitcoin rebounded and now it returns to $57,000.
Yesterday, news broke that the U.S. Commodity Futures Trading Commission (CFTC) is investigating the cryptocurrency exchange Binance because the company allowed Americans to bet in violation of U.S. rules. The CFTC is investigating whether the company allows U.S. residents to trade derivatives it regulates. The company is not registered with the CFTC. But Binance has not been accused of misconduct and the investigation may not lead to any law enforcement action. The CFTC regards virtual currencies such as Bitcoin and Ether as commodities and has jurisdiction over its futures and other derivatives. This means that if Americans trade on crypto platforms, no matter where the exchange is located, crypto platforms will face strict customer protection and regulatory requirements.
Binance said the company is committed to complying with the regulations. Binance also said in a statement, "We have adopted a cooperative approach to cooperate with regulators around the world. We have fulfilled our compliance obligations very seriously."
analysts: Don't be afraid of US bond yields
Morgan Stanley made a big statement: A-shares are more flexible in emerging markets
US bond yields soar. Some people exclaimed that the doomsday is coming, but US stocks did not fall sharply. Many analysts reminded that US bonds and US stock trends are not strongly related, so there is no need to panic about the sharp rise in US bond yields.
Deutsche Bank quantitative indicators show that the beta coefficient between bonds and technology stocks has been zero since 2015. The financial and energy sectors have the highest positive correlation coefficient with bond yields, while the utility and real estate sectors have the highest negative correlation with yields. Andreas Farmakas, quantitative strategist at Deutsche Bank, said there is a lack of direct and ongoing link between tech stocks and U.S. Treasury bonds. In fact, these stocks used to rise with yields, as rising yields were seen as a signal of strong economic growth, which could be beneficial to corporate profitability. But he also reminded that "this correlation has changed considering the link between technology, overbought COVID-19 and stock indexes." Terry Ewing, head of stock at
Mediolanum International Funds, believes that "many tech companies will continue to benefit from popular topics for many years to come, which will lead to huge profit growth." He also believes that "from the second half of this year to some time next year, investors should start to consider turning to higher quality stocks, rather than stocks related to the recovery cycle." Ryan Detrick, chief market strategist at
LPL Financial, pointed out after analyzing historical data that a stronger 10-year Treasury yield is extremely beneficial to the stock market, especially since the mid-1990s.
Wharton professor Jeremy Siegel also believes that stocks will still rise even in the face of rising bond yields and inflation concerns. Siegel said Thursday that the $1.9 trillion anti-epidemic relief plan is "more fuel; the bond market is worse than stocks, and funds will continue to flow into the stock market.
Morgan Stanley believes that Chinese stocks are more flexible in an environment where U.S. bond yields are rising. "When U.S. 10-year Treasury yields are above or below the average trend level, although the relative Sharp ratio in most emerging markets deteriorates, China's relative sharp ratio is less affected. ”
Morgan Stanley analyzed that because China's monetary and fiscal policies are relatively independent, various fluctuations can be avoided; because China's low dependence on foreign capital and strong control over capital flows, this helps stabilize foreign exchange.
Morgan Stanley calculated the Sharpe ratios of various industry sectors of the Shanghai and Shenzhen 300 Index and found out that during the period of rising 10-year U.S. Treasury yields were higher than the trend, and concluded that during the period of rapid upward tide of US Treasury yields, the energy, materials and utilities sectors were the best; the worst performed were the real estate, healthcare, IT and consumer goods sectors.
Analysts in technology stocks gave an astonishing target price
The market value of Apple and Tesla will exceed 3 trillion in the future?
As the stock price of technology stocks fluctuated, analysts gave amazing target prices for the two major technology stocks Apple and Tesla.
On Friday, New Street Research analyst Pierre Ferragu wrote in a report that by 2030, Tesla's market value could reach between $2.3 trillion and $3.3 trillion. The analyst believes that traditional automakers can capture the EV market share, but are unprofitable and will not put any pressure on Tesla. He added that pure electric vehicle companies will be in better shape and they can succeed after Tesla, but have no competitive advantage to challenge Tesla. Tesla's 2023 earnings per share is expected to be $12; according to compiled data, analysts' average expectations for Tesla's adjusted earnings per share in 2023 are $7.76.
Wedbush analyst Daniel Ives expects Apple's market value to reach $3 trillion, with his target price of $175 for Apple, the highest at Wall Street . On Wednesday, Ives also called the recent decline in Apple's stock price a "gold buying opportunity" and expected the upcoming iPhone 13 to become a "game changer."
Citi analyst Jim Suva also said on Friday that developing Apple cars could boost company sales by 10% to 15% after 2024. He expects that by 2025, the global electric vehicle market will exceed the smartphone, personal computer, tablet and wearable device market combined.
Editor: Captain
