Kaijing Reuters where Haiishan Jin Wei / when Lu Ling / editor
On December 4, It. Stock market fell sharply. The S & P 500 index was 2700.06, then 3.2%, the Dao closed at 25027.07, down 3.1%; The NASDAQ closed at 7175.43, down 3.8%.
(US stocks fell across the board)
Among them, the most obvious decline in technology stores, Apple dropped 4.4% on the day Amazon fell 5.8%, AMD dropped nearly 11%. In addition, the financial sector suffered from a setback, the Bank of America fell 5.43%, Morgan Stanley fell 5.04%, JP Morgan Chase fell to 4.46%, Citigroup dropped 4.45%, Goldman Sachs dropped 3.82%.
Affected by the US It. Stock market, global stock markets have fallen to varying degrees. Hong Kong Heng Seng index fell by 1.62% to 26,819.68; Hong Kong HSECEI fell from 1.38% to 10,756.95. As of press time, the UK's FTSE 100 has dropped 1.2%, Europe 50 has dropped 1.27%, and Nikkei 225 closed 0.53%. China's Composite Index fell 0.61% to close at 2649.81, and Shenzhen composite index fell 0.32% to close at 7928.51.
The decline in US It. Stocks on December 4 were not unexpected. Despite the lease trade between the United States and China, global stock markets have seen a great rise. But on the same day, this good news is not reflected in the curve of the US. It. Treasury.
On December 1, John President Trump and Chinese President Shi Jinping reached a trade agreement on the G20 summit. The United States agreed to postpone the original tariff escalation for 90 days. China has agreed to buy some products from the United States to reduce trade unbalance.
Built by this news, global stock markets have seen a great rise. However, this trend did not last for a few days. The market's consoles about the pace of US dollars. It. Bond yield made US. It. Stocks re-enter the downward trend.
On December 3, It. Treasury yields are flat or even down. "This shows that smart money is doubtful whether the development in the last weekend (ie the US-US trade agreement) marks a turning point in Sino-US. It. Trade relations, "said Matt Weller, Chartered Financial Analyst, Jiashan Group.
The market is worried that if China and the United States can not reach a long-term armistice agreement within 90 days, the agreement will not stop the trade war, but only bounce the trade war escalation.
On December 4, the US benchmark. It. 10-year bond income fell to 2,915%, which fell for four consecutive trading days.
Under normal circumstances, when the stock market declines, in order to avoid risks, money will run on the bond market and reduce bond yields. However, in the case of favorable news and global stock market rally, the yields of US It. Chains are still lower, indicating that the risk of appetite is still not high, and funds are still flowing into the bond market.
Matt Weller also believes that It. Bond yield will continue to fall on the foundation. He said: "Although we are cautious about the overall technical analysis of the fixed income market, the appearance seems to have built a double top model around 3.25% earlier in the quarter, suggesting that the market might Go next. "
Morgan Stanley predicts that 10-year US Treasury yields will fall to 2.75% by the end of 2019.
Not only that, but that is even more worrying that the interest rates on US. It. Treasury bonds are backwards. On December 4, the US reduced It. The 2-year regional bond fell to 2,799, and the spread of the 10-year US Treasury Boundary inferior to the lowest level since 2007. Both 2-year and 3-year US Treasury yields are higher than the 5-year Treasury yield . As of December 4, the collapse of 3-year US Treasury bonds closed at 2.808%, while the 5-year US Treasury bundle was 2.791%.
The Treasury Wear Curve is a very important indicator for observing the US economy. It. Economy. Historically, the reversal of yields (2-year Treasury yields over 10-year Treasury bonds) is accompanied by a recession in the US. It. Economy. So now the inversion of the US. It. Debt rates have caused the market to start worrying about whether the US dollar. It. Economy will fall into recession.
"The capabilities of the sensitive curve is usually not good for the bank's earnings when the long-term interest rate is lower than the short-term interest rate, it is difficult for banks to make money, but it is also confirmed by the Decline in the US Bear Market. "Hong Ying, head of the Bank of Communications International Research Department, told the Qijing reporter.
"When the US economy deteriorates, money will run out of the United States and in Europe, Japan, or better emerging economies," said Zhang Jun, chief economist at Morgan Stanley Huaxin Securities. This point is weakened by the latest period of time, and the strength of emerging market currencies can be seen.
The decline in US It. Stocks are going on for some time. Since October, the Dow Jones Industrial Average has fallen from a peak of 26,953 to a minimum of 24,118, a drop of 10.5%. The & p and NASDAQ indices also showed similar declarations. Even the voice in the market began to discuss whether It. Stocks have entered a bear market.
Huang Jun, chief Chinese analyst of Jiasheng Group, said: "The current market trend is characterized by the US stock market's growth and setback, finishing the previous uprend pattern and entering the show characteristics. The shock channel, the first support of the Dow is in the 24100 area, the second support is 23300. The two key support prices are not broken and it is difficult to step into the bar market.
At the same time, the position of U.S. It. Stocks can not be ignored.
Market Chandler, Head of Global Foreign Exchange Strategy at Brown Brothers Harrisman, believes that despite the interest rate incurs, It. Economy has not changed much in the last few weeks, the US. It. Financial The situation is still close to the most relaxed state of history. He said, "The downside of the US bond yield is more than a reversal of the pace of flattening, not a signal of economic recession."
At the same time, the market also predicts that the Fed's monetary tightening cycle is close to its end, and the trend of a course hike in the first quarter will be suspended. The most predictable is that the Fed will raise interest rates Twice in 2019.
Zhang Jun also believes that the profitability of US. It. Companies are still in line with expectations, and the fundamentals are not so bad. "At the end of the year, if you see that the US economy is not so bad, then the money will still go back to the United States, and it is possible to travel to the US stock market."
An unnamed economist said Kajing that when the short-term government bond yield is higher than the long-term government tie rate, the economic recession will follow. But the problem with this signal is that it does not tell people exactly when the recession will occur.
"Even if the United States really has a crisis, money will run back in the United States, for example, in the 2008 economic crisis fund flowed into the United States." Zhang Jun said.
It may be seen that although there has been a decline in nearly two consecutive months, It. The stock market is not so bad.
The recent drop in international oil prices has also added to the future of US oil prices. It. Stocks. Since October, the international oil price has fallen by 35%. This is a very important positive for enterprises, which is conducive to enterprises to reduce costs and expand the US economy. It. Consumption.
Zhang Jun believes that "although the valuation of technology stocks is somewhat too high, the energy and public utilities sector is still good."
(Editor: Li Linlin)