Likes ReceivedTechnology should be fixed today!!
$SentinelOne(S.US)hanghai Composite Index sh000001$ The market was really bleak yesterday. The Shanghai Composite Index fell by 1.1%, the Shenzhen Component Index dropped by 1.5%, and the ChiNext Index plunged by 2.1%. Among individual stocks, 4,300 were waiting to rise, but the median was -1.67%. Everyone was so beaten down that they didn't even have the energy to complain.
The trading volume of the two markets was 1.72 trillion yuan, shrinking by 49.3 billion yuan compared to the previous trading day. Despite the sharp decline, there was no increase in volume, indicating that people in the market have already given up and are unwilling to cut losses, while outside the market, no funds are willing to enter. This market is really tough.
Just look at this month: out of the 12 trading days, there were only 3 days when more than 3,000 stocks rose, while 4,000 stocks falling has become the norm. In the current market, the more you try, the more you might lose—this is the harsh reality.
Right now, there are two major obstacles for the A-share market to rise: one is the weak domestic economic fundamentals, and the other is the global market's concerns about the AI bubble. As for factors like Japan's interest rate hike, year-end institutional inactivity, and the crackdown on quantitative trading, these mostly affect market sentiment and create negative pressure.
So the problem is clear: on one hand, it depends on how policies are introduced domestically, and on the other, it depends on when the AI tech sector in the U.S. stock market stabilizes. If investors believe in either one, the A-share market could rebound. If they believe in both, we might even see a major uptrend.
From the index perspective, yesterday's close was at 3,824 points. If there's no rebound today, this round of correction will likely break below 3,800 points. Strong support is around 3,785 points, with the last line of defense at 3,731 points. From this perspective, the downside isn't too large.
This Friday is a critical day: Japan will raise interest rates, and it's also the last stock index futures settlement day of the year. If the market can withstand the impact of these two events, global markets should rebound, and the A-share market can catch a breather.
Here are the hot topics from last night to this morning:
1. Expanding Domestic Demand
Expanding domestic demand is the top priority for next year. Authorities emphasized the need to grasp the structural changes in consumption and boost it by addressing both supply and demand. This is clearly a signal for consumption, with special documents interpreting policies to stimulate consumption and real estate.
The pressure on domestic demand next year is significant. Previous state subsidies for cars and home appliances have already exhausted much of the demand. So what's next? One is a recovery in the real estate market, and the other is service consumption. This time, the Central Financial and Economic Affairs Commission also highlighted sectors like culture and tourism, elderly care, childcare, and healthcare.
Many people habitually think consumption won't pick up because they feel the market isn't doing well. But when everyone was hyping commercial aerospace and new productive forces, why didn't they talk about feelings? In the A-share market, especially for short-term trading, you either believe in these trends early or don't believe at all—don't be too biased.
2. Hong Kong Market
Brokerage analysts said the "tax assessment for high-tech companies" has become stricter but isn't a blanket policy.
The Hang Seng Index once fell over 2%, and the Hang Seng Tech Index dropped 2.7%. Alibaba nearly fell 5%, while Tencent also dropped over 1%, breaking below HK$600.
At the start of the year, the Hong Kong market was booming, far outperforming other markets. But recently, the performance has been weak, especially for the Hang Seng Tech Index, which has fallen 20% from its peak, entering a technical bear market. There are many reasons for this weakness, but the key is the excessive IPO issuances and the lack of incremental funds by year-end. Even the strongest market can't handle such large-scale IPOs—it's time to be cautious.
3. 360-Related
The biggest drama yesterday was former 360 executive Yu Hong accusing Zhou Hongyi of helping falsify accounts, involving at least billions, and threatening to release the evidence online.
360 hasn't achieved much in recent years, and Zhou has been trying to stay relevant as an internet celebrity, squandering a good hand. But the A-share market has been kind—every year, 360 gets a boost from AI hype. Last night, the company denied financial fraud, but it's unclear if the stock will rebound today.
4. U.S. Non-Farm Payrolls
The U.S. released November economic data: non-farm payrolls increased by 64,000 (vs. an expected 50,000), and the unemployment rate was 4.6% (vs. 4.4%). October's non-farm payrolls fell by 105,000 month-on-month (vs. an expected 25,000 drop), and August and September figures were revised down by 33,000 combined.
The U.S. non-farm data seems contradictory—employment exceeded expectations, but so did unemployment. After the release, the probability of a Fed rate cut in January rose from 22% to 31%, a slight positive. The dollar index briefly fell below 98, a first since October 6. The RMB has strengthened to 7.03. In theory, RMB appreciation is good for A-shares, but the market isn't buying it.
Barring surprises, the tech sector should recover somewhat today.
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