To The Moon

Recently, $S&P 500(.SPX)$ pulled back, while $HSI(HSI)$ has risen over 20%+. The gains in Hong Kong's newly listed stocks have been astonishing, with $LAOPU GOLD(06181)$ rising by 1600%. However, the market is now starting to worry that this independent trend in the Hong Kong market may come to an end. The AI boom sparked by DeepSeek has continued for more than a month. Can the Hong Kong stock market really maintain its independent trend during a pullback in U.S. stocks? There have been only six instances since 2012 when the Hong Kong market showed an independent trend: Hong Kong stocks rose while U.S. stocks fell, and the excess return exceeded 10%. The first instance occurred in April 2015, when China's asset bull market accelerated after a slight pullback in U.S. stocks, triggered by regulatory tightening and the collapse of the bubble. The next three instances were in 2022 (January, June, December), driven by changes in the economic conditions of China and the U.S., along with stagflation trades. The fifth instance occurred in April-May 2024, related to changes in macro policies and U.S. stagflation trades. This current market trend is the sixth instance and differs from previous ones due to the driving factors of China's market fundamentals. The popularity of DeepSeek and Manus has driven the "revaluation logic" of Chinese assets. Based on past experience, there are two scenarios where the independent trend of the Hong Kong market could end: 1. when the driving fundamental factors behind the recovery are disproven (the actual economic conditions failed to materialize); 2. when there is no new incremental information in the fundamentals and the liquidity suddenly tightens, causing the valuation bubble to burst. Can the East Rising, West Setting logic hold? Bull Case: The logic of revaluation driven by AI. 2. China's fiscal stimulus expansion vs. Trump's government spending cuts. 3. The speculation in newly listed like $MAO GEPING(01318)$ stocks may not have stopped yet. Bear Case: The East Rising, West Setting logic has not yet materialized. China's GDP is lower than that of US. The surge in southbound funds could mean the market is peaking. Southbound funds exploded into Hong Kong stocks, with a net inflow of 29.6 billion HKD in a single day, setting a record high. Looking back at history, each time southbound funds bought heavily into Hong Kong stocks, it was almost at a market peak. The full circulation of newly listed stocks like $LAOPU GOLD(06181)$ might lead to a decline. How do you view the East Rising, West Setting logic? Do you think it holds? How long can this independent trend in the Hong Kong stock market last? Do you believe the newly listed Hong Kong stocks will continue to surge? Leave your comments and also post to win tiger coins~