On May 5, the 2018 Buffett shareholders' meeting was held in Omaha, and the scene of "Pilgrimage to Ten Thousand People" was staged again. However, this year can be regarded as a "eventful year" for the global market - US stock market crashes frequently, trade disputes continue, and geopolitical risks occur from time to time. All walks of life are particularly concerned about the market insights of stock god Buffett .
In addition to expressing his consistent optimism about Apple, Buffett also affirms the expansion of the US economy. He said that he has experienced 14 of the total 44 presidents in the United States. " Trump is now the 45th term. The US economy is still moving forward all the way... And we live really well now, which is a very ideal situation and a very good phenomenon." In addition, Buffett also expressed his optimism about holding long-term treasury bonds, because the rise in inflation expectations will make this investment "not worth the penny."
But what is subtle is that when the US economic expansion enters the late stage, the US stock valuation continues to hit record highs, and the first quarter witnessed the best financial report season, the market is increasingly skeptical about whether US stocks can continue to take off, especially the current S&P 500 index is near the 200-day moving average, which will break the level if you are not careful. The market is also paying attention to how the "curse effect" of "sell in May" this year will be interpreted.
The first financial reporter interviewed by many institutions generally believe that the financial report of the US stock market in the first quarter was strong, with the US unemployment rate hitting a record low of 3.9% in April, but the wage growth rate was mild, indicating that the Fed did not have too much pressure to accelerate interest rate hikes, and the unexpected weakening of the first quarter economic data also led to the European Central Bank being cautious about currency tightening, so US stocks seem safe in the near future. "But the S&P 500 continues to move in a triangle this year, and making trouble in such a narrow range also makes investors worried about 'breaking'." Situ Jie, a senior US stock trader, told the First Financial reporter.
stock god confirms that the economy continues to expand
At present, no one is skeptical about the expansion of the US economy, and stock god is particularly optimistic about this.
Buffett said that the US economy is still moving forward all the way. Everyone's life will get better and better, and in all aspects. "It's better than Mr. Rockefeller, at that time, and our lives are really rich now. This is a very ideal situation and a very good phenomenon." 14 of these 44 terms have gone through the process of changing my 10,000 yuan to 51 million
Buffett mentioned that he has experienced 14 of the 44 presidents of the United States, "all have gone through the process of changing my 10,000 yuan to 51 million ." This is partly due to the Democratic president and partly due to the Republican president. "In general, the US economy is still going upward and has been moving forward."
, sitting next to me, Charlie Munger added a funny sentence: "You don't know how bad the politicians were in the past, but now the members of parliament are good."
At present, the US economy is indeed still in an expansion cycle, and from the fundamentals alone, it is far better than the euro zone and Japan.
Last Friday, the U.S. Department of Labor released its April non-farm employment report, with the number of non-farm employment increasing by 164,000, expected by 192,000, and the previous value was 103,000. However, the unemployment rate was 3.9%, compared with 4.1% the previous month, setting a new record low. Institutions generally expect that the U.S. unemployment rate may continue to decline to the level of 3.5% to 3.7% this year. In addition, the labor force participation rate was 62.8%, compared with 62.9% the previous month.
At present, the market is looking forward to the decline in unemployment rate driving wage growth, thereby driving inflation. But on the other hand, the market is still scared of rising wages because it means the Fed may tighten faster. The US stock market crash in February was caused by the temporary surge in wage growth. Fortunately, this data shows that the average hourly wage in April increased by 0.1% compared with the previous month, and is estimated to increase by 0.2%, an increase of 2.6% year-on-year. For the market, such a lukewarm growth rate seems to be just right.
The Federal Reserve expects there will be two interest rate hikes this year, with the federal funds rate exceeding 2% at the end of the year, and the probability of interest rate hikes in June is now approaching 100%.
US stocks are still "popular"
However, unlike the simple and crude style of "buy when it falls" last year, after the market experienced violent fluctuations this year, they are all cautious about US stocks. Although the financial report season is eye-catching, it is generally believed that this is because the one-time driving effect of tax reform is strong, and the market's gains are mostly from technology stocks that were affected by scandals in the early stage and rebounded after a plunge.
In April this year, US stocks fluctuated violently, but eventually ended with a small red (the Dow Jones Industrial Average and S&P rose 0.3%, while the Nasdaq rose nearly 0.1%). Now that May is approaching, the curse of the stock proverb "Selling stocks in May will leave" is coming again. How to avoid bad luck may be the most concerned topic for investors at the moment.
Some traders also told reporters that this seasonal effect does exist, and traders tend to reduce their stock positions, because July and August are generally vacation seasons, with volatility and market trends relatively light, and the real market trends will have to wait until after September.
According to the Stock Trading Yearbook, May has been a typical mixed month since 1950. In the past 67 years, the Dow Jones Industrial Average has risen 35 times and 32 times, with an average decline of 0.02%. However, for the S&P 500, May is the eighth month of gains in the year, with an average increase of 0.2%, 39 times and 28 declines in the past 67 years. The Nasdaq has performed slightly better, with an average increase of 0.9% in the past 46 years, with 26 months of gains.
It is worth noting that since this year is the midterm election year, the agency also believes that the stock proverb "selling stocks in May will leave" is likely to be made, and the resolution of the trade dispute will not be done overnight. In fact, May to October are a period of poor performance in the stock market, but in the past five years, due to the fierce rise of US stocks, the phenomenon of this off-season in this stock market is not obvious.
According to the reporter, many investors and small institutions choose to leave the market and wait and see, only trading some derivatives, because there are major risks in the technical aspects of the US stock market this year. Some institutions also pointed out that the current 50-day moving average of the S&P 500 is about 2686 points, only 2.8% higher than the 200-day moving average of 2612 points. Once the former falls below the latter, it will form a technical " death cross ", and the power of this helping decline cannot be ignored.
However, UBS stock strategist Keith Parker mentioned in an interview that the S&P 500 closed at 2656 points on Monday, only 200 points away from the historical peak. Investors who want to sell stocks have already appeared. The question now is whether they will continue to sell stocks in May? According to statistics, investors have withdrawn US$40 billion from the US stock market in the first three months of this year. He believes that May is an important month, but it is likely that the closing price of the consolidation range is close to the upper limit of the 2600 to 2800 points at the end of the month, and he argues that technology stocks will still lead the rise, and inflation will not constitute a major problem, but the effect of fiscal stimulus on the economy will only last until the third quarter of this year.
At present, the A-share market is also closely monitoring the spillover effect of the overseas "May Curse". Some fund managers also told reporters that although all walks of life expect that A-shares will drive market sentiment before they are included in MSCI in June, in the context of continued trade disputes and deleveraging leading to a shrinking game, foreign and Chinese capital still have a relatively cautious attitude towards A-shares.
UBS Securities China's chief strategy analyst Gao Ting also told reporters that although A-shares earnings were stable in the first quarter, some worrying phenomena were still found. It is expected that the growth rate of net profit will face greater downward pressure in the next few quarters, including the revenue growth rate in the first quarter was 11.2%, which may further slow down as the economy weakens; the expense ratio may further rise due to the stickiness of expenses, thereby squeezing the net profit margin; the high commodity prices may put pressure on gross profit margin in the next few quarters. Therefore, Gao Ting still expects the profit growth rate of A-shares and non-financial sectors to be 7% to 8% this year.
