As of the close of this morning, the Hong Kong Hang Seng Index fell 4.99% today.
Hong Kong stocks fell 4.99% today
Among them, technology stocks fell the most, Alibaba , Tencent , and Meituan all fell between 8% and 11%.
Hong Kong stocks have intensified since the second half of this year, and are currently hitting a new low in 13 and a half years.
Hang Seng Index hit a new low in 13 and a half years
Hang Seng Index is very cheap now, but Hong Kong is sandwiched between the vortex of the struggle between China and the United States. Faced with the negative impact from the outside and China, the impact on Hong Kong stocks is the first to be affected, and the current investment sentiment is very sluggish.
When the outside world falls sharply, it is difficult for Hong Kong to survive. With negative factors, although Hong Kong stocks are currently considered low prices, they may not necessarily rise, because it is difficult for me to predict what factors can lead to a rebound in the market.
As of the close of this morning, the stock prices of Meituan, Tencent, and Alibaba have fallen and fallen from their highs in 2021 to date, which are -72.74%, -72.48% and -79.70% respectively.
Tencent's stock price continues to fall
But now many Hong Kong stocks are worth paying attention to. If there is a sharp decline in the future, it is a good investment opportunity (I personally feel that it will be better than A shares ). If you can hold it for 6 months or more, you will have a very high chance of achieving positive returns.
The current risk facing the investment market is unprecedentedly large
This crisis may be greater than when the epidemic broke out in March 2020. In 2019, the balance sheet of the Federal Reserve was US$3.8 trillion, and in 2022 it has reached US$9 trillion, accounting for about 40% of the US GDP, and the balance sheet is unprecedentedly large.
When the interest rate hike cycle of the US has not reached its peak, the US dollar index will continue to be strong, with a chance to rise above 120, while currencies in other countries will be destined to be weak, and risky assets will be oppressed.
The world will face an unprecedented decade-old stagflation-style debt crisis. Based on the next crisis, stagflation and huge public debt, it is not the same as the crisis in the 1970s and 2008.
The global stagflation problem (high inflation and low growth) occurred in the 1970s, but there was no huge debt crisis because the local debt level was relatively low. After the debt crisis broke out in 2008, low inflation or deflation occurred in the world, which caused a demand shock due to debt problems.
Today, we have a supply chain impact at a very high level of debt, which means we are heading towards a scenario that combines stagflation in the 1970s and the debt crisis in 2008, that is, a stagflation debt crisis.
The US economy has seen negative growth for two consecutive quarters, but its new positions are still quite active, so it is not formally recession now, but as the labor market gradually becomes weak, the United States and other developed countries are likely to enter a recession by the end of this year.
There are enough signs that a severe stagflation debt crisis will set the tone for a future economic recession.
The proportion of private and public debt in the United States to economic growth is much higher than before, rising from 200% in 1999 to 350% today.
Therefore, monetary policy accelerates normalization and interest rates, which will lead to bankruptcy and defaults in households, enterprises, financial institutions, and governments.
Synchronous tightening of global monetary policy has had an impact on some bubbles
Personally believe that the simultaneous tightening of global monetary policy has had an impact on some bubbles, including private and public stocks, real estate, meme stocks, cryptocurrencies, Special purpose acquisition company (SPAC), bonds and other credit tools.
Central Bank may feel helpless and unwilling to fight inflation
In the environment of stagflation, if the central bank turns, inflation may continue to rise, but the central bank may feel helpless and unwilling to fight inflation, which means that the Great Moderation period of the past 30 years has ended.
The world will enter a era of large inflation or instability stagflation . Faced with the impact of the supply chain, just like in the 1970s, policy makers are unwilling to fight the rising inflation.
The central bank will fall into the so-called (debt trap). Any move to normalize monetary policy will cause a surge in debt burden, leading to large-scale bankruptcy and chain financial crisis.
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