To The Moon

Recently, after a significant decline and bottoming out, the market has staged a substantial rebound. In particular, last week, driven by multiple policy tailwinds, the market at one point surged with heavy volume.

On November 2, the central bank, the National Financial Regulatory Administration, and the China Securities Regulatory Commission held two symposiums and rolled out a series of major favorable measures, greatly boosting investor confidence and causing the market to halt its decline and rebound.

These measures include swap facilities for financial institutions such as funds, insurance companies, and securities firms, providing re-lending for stock buybacks and increased holdings by listed companies, and a state-owned bank planning to provide about 100 billion yuan in credit lines to each of two state-owned companies for increasing their equity holdings.

The State Council executive meeting explicitly proposed improving the capital market's stabilization mechanism, enhancing the stock market's internal stability, and promoting the steady and healthy development of the capital market.

Relevant departments also further clarified that Central Huijin should play a role similar to a stabilization fund. This series of measures pushed the market to stop falling and rebound.

In overseas markets, the US saw a pullback due to the Democratic Party's landslide victory in the midterm elections, which could suppress capital expenditure by AI technology companies, with tech stocks falling particularly sharply.

However, the AI technology revolution remains the overarching trend, and short-term fluctuations are unlikely to change the broader trajectory of AI industry development, so there is no need for excessive concern. If the US compresses investment in AI, it may actually be an opportunity for us.

We welcome capital to invest in China, and our support for artificial intelligence remains as strong as ever. AI development will affect many industries, and guiding the healthy development of AI technology so that it becomes a tool for raising labor productivity rather than replacing human jobs may be a future direction.

China has also issued relevant guidelines, prioritizing robots for dangerous work rather than replacing ordinary people's jobs. I think this is a way to leverage strengths and avoid weaknesses, and it aligns with the wisdom of our ancestors.

Overall, the current market has moved from the earlier decline phase into a bottoming and rebound phase. Although the rebound process has been full of twists and turns, the overall atmosphere has improved considerably compared with some time ago.

When market sentiment was exuberant, such as in June, I consistently advised everyone to overcome greed, take profits in a timely manner, and adopt a three-step strategy of deleveraging, halving positions, and holding one hand in tech and one hand in dividend stocks. I suggested standing closest to the door while dancing rather than getting too immersed in the play, and many investors thereby avoided this round of sharp declines.

Of course, now that many tech stocks have already fallen by 50% or even 70%, we have entered another stage, which is to overcome fear, selectively bottom-fish some quality stocks or quality funds that were wrongly sold off, maintain around half position, watch more and act less, and patiently wait for the next round of market movement.

Different strategies should be adopted at different stages of the market. In summary, not going long at highs and not going short at lows is the overarching strategy.

This round of intensive market-stabilization measures is gradually being implemented, with the aim of reversing the market's downward trend. If the policy intensity is still insufficient to reverse the trend, it will be further increased until the goal of stabilizing the market is achieved.

Therefore, everyone should remain confident about the market outlook; there are still many tools in the policy toolbox that can be used. Compared with the past, the measures introduced this time continue some of the previously effective institutional arrangements, while also reversing the market trend through real money entering the market, achieving certain results. Subsequent efforts to increase market entry may be further strengthened.

When the market suffered a major decline some time ago, I actively called for timely introduction of strong market-stabilization measures, increased market entry, and real money entering the market to reverse the downward trend. Now these policies are gradually landing and may soon play a key role. Everyone also needs to maintain confidence and patience and wait for the next round of market movement.

The results of the US midterm elections have been announced. As I previously predicted, the Republican Party led by Trump suffered a comprehensive defeat to the Democratic Party, which won both the Senate and the House. The US will enter a divided government between the executive and legislative branches.

This will weaken Trump's control over the situation and may even turn him into a lame-duck president. In terms of market impact, on the one hand, after the Democratic Party controls Congress, it may quickly push for resolving the Middle East conflict through negotiations, which would help increase oil supply and significantly bring down oil prices; on the other hand, the Democratic Party may take certain measures to restrict data center construction and limit large-scale AI technology capital expenditure, dealing a certain blow to AI technology investment.

But for us, this may actually be a good thing, because we actively support the development of AI technology and hope more capital will flow into China's data centers, AI computing power chips, semiconductors, and other industries. China is expected to leverage its late-mover advantage in artificial intelligence development and occupy a favorable position in AI competition.

For A-shares and Chinese assets, it may also attract part of the capital inflows and raise the valuation level of Chinese assets. If oil prices can trend lower, the market's expectations for US inflation will decline, thereby reducing the possibility of a Federal Reserve rate hike in December. But it is still uncertain whether there will be a rate hike in December.

Even if there is one rate hike in December out of concern about inflation, the possibility of further rate hikes next year is very low. The current target range for the US federal funds rate is 3.75% to 4%. If another 25 basis points are added, the upper limit will exceed 4%.

This would not only increase the US government's debt repayment pressure but also raise the interest burden on US households' mortgage loans and other credit, so the possibility of further Fed rate hikes next year is relatively low. However, if there is another rate hike in December, it may have an adverse impact on global liquidity, especially in emerging markets. This is something that needs attention at present.

Whether there will be a rate hike in December still depends on changes in US November CPI, nonfarm payrolls, and other data. The Federal Reserve currently regards price stability as its first policy objective, followed by safeguarding employment, so these two sets of data need to be closely monitored.

In this round of decline, tech stocks were undoubtedly the hardest hit, which is also related to the speculative frenzy in tech stocks in the first half of the year. After substantial adjustment, the process of squeezing out the bubble in tech stocks is basically complete, and valuations have fallen to a reasonable range, with some even oversold.

If we believe the development prospects of the AI technology industry remain unchanged, then now it actually already offers good value for money. Some leading tech stocks related to AI and supported by earnings and orders may continue to rebound in the future.

Recently, the humanoid robot sector, which I have highlighted many times before, has stood out by rising continuously against the trend. Humanoid robots have made good progress in both smart brains and hardware.

Jensen Huang's recent remarks on robots, especially regarding progress in robot brains, also boosted market confidence. What may truly trigger a major rally in the robot sector is likely Elon Musk's release of the new-generation robot Optimus V3, which will be an important sign of robots entering mass production.

So at this time, everyone should overcome fear, look for some wrongly sold-off quality leading stocks or quality funds, and position for the next round of market movement. Before the end of the year, the market is expected to rebound.

Next week, the highly anticipated APEC Economic Leaders' Meeting will be held in Shenzhen. As a Shenzhen native, I feel very proud. This is also the highest-level international conference Shenzhen has hosted.

Leaders from many countries will gather in Shenzhen. This meeting is of far-reaching significance for raising the valuation of Chinese assets and boosting capital market performance. It will also let the world recognize China's strength in technological innovation and help countries around the world understand the earth-shaking changes that have taken place in Shenzhen, a window city of reform and opening up, over the years.

The meeting will enhance the international status of the Guangdong-Hong Kong-Macao Greater Bay Area and help international economic development through Shenzhen-Hong Kong coordination. The Guangdong-Hong Kong-Macao Greater Bay Area is one of the world's four major bay areas, and its future development prospects are very broad.

We also hope to use the major opportunity of the APEC meeting to boost global investors' confidence in Chinese assets and enhance the allocation value of Chinese assets. MACD golden cross signals have formed, and these stocks are rising well!

Sina statement: This news is reprinted from a Sina partner media outlet. Sina publishes this article for the purpose of conveying more information and does not mean it agrees with its views or confirms its description. The article content is for reference only and does not constitute investment advice. Investors operating based on this do so at their own risk.