Core views:
1. The most difficult or least consensus judgment of our market this year is about the trend of the US economy and the corresponding Fed policy next year. This year, the market has been dominated by the belief that the US will fall into a recession, but it did not happen. Now, the market consensus is that the US may not fall into recession next year. Therefore, we can reverse the trend next year. However, we should not act randomly.
2.This year's policy is not invalid. However, if you think that short-term printing money and zero interest rate policy can rescue the economy in one year, it is unlikely to turn over. It is not that the policy is useless, but that the real estate is a long-cycle asset. If you hope to return to the previous situation as in 2015 when the stock market bubble burst at 5000 points, PSL expansion brought about 1 trillion yuan of maturity effect, and about 3 to 4 trillion yuan of new credit. We all feel excited when increasing leverage, but no one wants to bear the responsibility when deleveraging. Therefore, now we are the time to pay down our debts, which is deleveraging.
3.Generally speaking, a real estate cycle, such as in the United States after the subprime mortgage crisis in 2008, lasted until 2015 before the US real estate cycle restarted again. Japan's household sector has been deleveraging since the bubble burst in the 1990s. It was not until the Great East Japan Earthquake in 2012 that the Japanese government immediately took three major measures to rescue the economy. However, it was not until 2014 and 2015 that Japan's household leverage rose again. Japan saved for 25 years, while the United States saved for seven to eight years. We must have patience. A real estate cycle lasts about seven to eight years.
4.Next year, as people gradually realize their expectations of real estate and reset their expectations, they will no longer expect miracles to appear overnight. The negative factors of exchange rates will be eliminated, and the market situation next year is likely to continue this year's trading range: from 3000 to 3500 points for the Shanghai Composite Index and from 16000 to 23000 points for the $HSI(HSI)$ . The current 2900 points of SHCOMP and 16300 points of Hang Seng Index may be at the bottom of this round of market rally.
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