From October 20 to 22, along the banks of the Huangpu River in Shanghai, the 2026 Sustainable Global Leaders Conference will return once again. Nobel Prize and Turing Award winners will take the stage to discuss the future and trends of technology, and there will also be a live dialogue between the internet-famous professors who "rescue" people from anxiety and the era of involution — Macfarlane and Xiang Biao!
Spots are limited, so act quickly. Let us join together for this appointment with sustainability! [Click to register] Affected by the correction in U.S. stocks last Friday, Asia-Pacific stock markets generally opened lower and corrected on Monday, especially the chip sector, which saw relatively large declines and dragged down the performance of the Nasdaq. This also had a major impact on chip stocks in Asia-Pacific markets. Over the weekend, there were also differing expectations regarding the Federal Reserve's next move. U.S. CPI for September, released last week, reached 3.7%, exceeding August's 3.4% and also surpassing the market's previous expectation of 3.6%, which led the market to briefly expect the Fed might raise rates again by 25 basis points in October. But afterward, the Fed's third-ranking official, who also holds a voting role this year, said that this round of U.S. inflation is caused by three layers of reasons, not simply by an overheating economy. The first layer is that the Middle East conflict has left the Strait of Hormuz in a semi-blockaded state, reducing oil supply and driving oil prices higher, approaching the $110 per barrel mark. Oil is the blood of industry, and higher oil prices have pushed up U.S. inflation. The second layer is that the Magnificent Seven tech giants have made enormous AI technology investments, driving up prices in chips and related industries. Leading memory chip companies have shifted production lines to high-end HBM chips, while memory chips used in phones and computers have suffered insufficient production capacity and sharp price increases. Protests have broken out in many parts of the United States, where the massive capital expenditures of tech giants have raised the prices of end products such as phones and computers, forcing ordinary people to bear the cost of higher prices. Some U.S. courts have even summoned Samsung and Nvidia to court, saying they raised chip prices and caused computers and phones to become more expensive. This part of price increases is also not something the Fed can control through rate hikes. The third layer is inflation brought by resilient economic growth and rising demand, and rate hikes have some effect on this part of inflation. So his meaning is that the possibility of consecutive rate hikes in October is extremely small, and one rate hike may be considered in December, depending on inflation and nonfarm payroll data for October and November, and there may be no more rate hikes in 2027. His remarks were relatively dovish and provided a boost to investor confidence. Although the Nasdaq has recently pulled back in this round of the U.S. AI technology market, no downward turning point has appeared. The turning point in this round of AI technology is not caused by rising U.S. Treasury yields; the key is whether AI technology capital expenditures have slowed in growth or even turned down in absolute terms, and so far this phenomenon has not appeared. Therefore, the quarterly results of AI hardware companies such as Nvidia continue to beat expectations, keeping the Nasdaq strong. However, technology stocks in Japan, South Korea, and the A-share market have performed much more weakly than those in the United States, mainly because U.S. technology stocks truly have earnings support and occupy the position of chain leaders, while these AI hardware stocks in Chinese, Japanese, and South Korean markets are mostly supporting the industrial chains of U.S. tech companies, so their profitability and future growth potential are relatively weaker. As a result, many technology stocks in the United States, Japan, and South Korea have fallen by nearly half from their early July highs, and some have even dropped more than 50%, but from another perspective, this bubble squeezing has also released the risk of excessive valuations. In May and June, when everyone in the market was chasing the light, I mentioned three risk signals to warn everyone, so they could promptly halve positions, reduce leverage, and hold both technology and dividend assets rather than betting on a single sector. The first danger signal was that trading in the top 5% of stocks accounted for more than 50% of turnover, setting a record high. The sector was too crowded, and historical experience shows that this is usually followed by relatively large declines. This includes the optical fiber and cable sector. Although third-quarter earnings continued to grow, valuation declines led to a correction of as much as 50%. This is most likely a process of bubble squeezing, not a change in fundamentals. What is the difference between the fundamentals of these technology leader stocks now and in May and June? They are still growing, but market sentiment has shifted from the enthusiasm then to pessimism now, resulting in a valuation selloff. This is the bubble-squeezing process I mentioned. The second danger signal at the time was that margin financing and securities lending balances broke through the 3 trillion mark, setting a record high. Many people say that there was also off-market margin financing ten years ago, and now there is no off-market margin financing. Ten years ago, the total market value was only 60 trillion, and now it is 120 trillion, so the overall leverage ratio is not high and is far below that of ten years ago. But I pointed out at the time that ten years ago it was a broad bull market, and the leveraged funds then were added across thousands of stocks, while this year is a structural market, and this 3 trillion in funds is almost mainly concentrated in the top 5% of technology stocks, so the local leverage ratio is even higher than ten years ago. This is the capital-chain reason that triggered the decline in technology stocks. Third, many public fund managers, including some who had long allocated to consumer stocks, capitulated one after another and switched from consumer stocks to technology stocks. Bears do not die, and the rally does not stop. When even these bears who last remained bearish on technology stocks turned to chase technology stocks, that was a danger signal. In fact, looking back, these three signals were very clear, which is also why I was one of the very few across the entire internet at the time to warn everyone about the technology bubble risk. I believe that when market sentiment is excessively euphoric, that is the time to reduce positions. At that time, many AI technology funds rapidly exceeded 10 billion in scale in a short period, which was also a danger signal. At that time, many new AI technology funds received more than 5 billion in subscriptions in a single day, and the largest one exceeded 7 billion. These were all signals of excessive market euphoria, and at that time one needed to overcome greed and decisively take profits and lock in gains. Now we have reached another extreme, and now market sentiment has become excessively depressed. Recently, when I went to major banks for roadshows and speeches, I learned that public fund sales have fallen off a cliff. Daily sales have dropped from hundreds of millions or billions in July to only a few million or tens of millions, a decline of two orders of magnitude or even more. I have always told everyone an eight-character strategy: take what others abandon, abandon what others chase. Now is again the time to take what others abandon, while June was the time to abandon what others chase. Contrarian investing is also a very important method of value investing. When market sentiment is depressed and more and more people see a bear market, that precisely indicates that this round of correction is gradually approaching its end. Recently, relevant parties held symposiums to actively listen to the opinions of institutional investors such as brokerages and funds. I was also invited to write five or six suggestions for rescuing the market, hoping to increase the intensity of market rescue, truly enter the market with real money, boost investor confidence, reverse the market's decline, and allow this slow bull and long bull market to continue, pushing the market to shift from emphasizing financing to emphasizing investment, so that the broad masses of investors can make money through the capital market and generate a wealth effect. This will help boost consumption and support the development of technological innovation industries. I also hope that recently there can be restrictions on large-scale reductions by major and minor non-tradable shareholders, a reduction in the frequency of quantitative trading, a pause on large IPOs, and a reduction of funding pressure on the market, so it can recuperate and gradually recover its vitality and investors can gradually restore confidence. I hope all sectors of society can actively protect this hard-won slow bull and long bull market. This is a very important social responsibility, enabling the capital market to better play its role in wealth creation, increase household wealth, and thereby boost consumption and provide greater support for economic growth and economic transformation. A MACD golden cross signal has formed, and these stocks are performing well!
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