To The Moon

Both meme and Chinese stocks become good brothers recently, plunging down again especially at current turning bad market sentiment. 

US memes

Last week, the Federal Reserve released non-farm payroll data and unemployment rates. We can see from these two data points that the US economy is slowing down. This has reduced the probability of the Federal Reserve raising interest rates in the next quarter. However, the recent surge in oil prices could lead to a resurgence in inflation. So, I believe the Federal Reserve will not move to cut interest rates too early, as inflation would become very difficult to contain. 

With such bad market condition, it is not advisable to long meme stocks as the risk is even much higher. The recent hot meme stocks belong to $AMC Entertainment(AMC)$  and $Faraday Future Intelligent Electric Inc.(FFIE)$  without any doubt. AMC's operational struggles were closely tied to the pandemic. Covid19 shutdowns and a slower return to theaters weighed in the firm's profits for several quarters. The condition is worst for FFIE where it announced a reverse stock split of its common stock at a ratio of 1-for-80! Technical wise, both are breaking recent new low, therefore nothing to see at this moment. 

Memes to the sea

Hong Kong and A-shares:

China has been consistently rolling out a series of policies to stimulate the stock market and the economy during this period. However, it seems that these policies have only provided foreign funds with an opportunity to sell at high levels. The stock market has clearly shown a trend of opening high and then trending lower. Therefore, I am short term bearish for $Alibaba(BABA)$ $JD.com(JD)$ $Pinduoduo Inc.(PDD)$  as I believe :

China will need some time to assess the progress of its recovery. Although many companies with cheap valuations have emerged, it may take a long time for stock prices to recover.

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