A-shares, this time is different

Last week in the Chinese stock market, three things are worth reviewing:

First, the economic data was poor, yet A-shares still rose—bad news = good news.

The industrial added value, retail sales, and fixed asset investment growth released last Friday all fell short of expectations. In this situation, A-shares surprisingly turned positive—the market interpreted bad news as 'good news.' Poor data → expectations of policy support → the stock market instead rises, which is quite similar to the logic in the US stock market where 'the worse the data, the faster the rate cuts.' In addition, China's current interest rate level is low, savings are high, and investment channels are few, making the stock market a natural attractor for some 'existing funds.' This is somewhat similar to the situation in the US, where there is a scarcity of assets and excess money chasing the S&P.

The stock market operates on 'expectations.'

Second, the Ministry of Finance launched a consumer loan interest subsidy policy—simply put, if you take out a consumer loan, the government helps pay part of the interest, saving you up to 3000 yuan. Brokers estimate that if the policy is implemented on a large scale, it could unlock trillions in loan demand.

The market likes to amplify these 'small positives' for speculation, with constant small actions, but the big moves are yet to be seen. The market benefits in the short term, but still lacks a major policy that can 'seal the deal.'

Third, government bonds have cooled—people are no longer just focused on safe havens but are betting on a wave of policy expectations.

In the past, when economic data was poor, people would buy government bonds for safety, pushing yields lower and lower—but this time is different. The market instead sold off long-term government bonds, with 30-year government bond futures dropping to a four-month low. This indicates a change in the mindset of investors: no longer seeking warmth in the bond market but pursuing risk assets (such as stocks and commodities). Behind this is actually a 'shift in risk preference.'

The market atmosphere is quite interesting: reality is somewhat cold, yet the stock market is very hot. Various small measures are constantly being tested, and the market feels like a child who smells candy, getting excited first and foremost. This is more like a 'party of emotions,' where currently all news seems to be good news.

The real problem is: people no longer know under what circumstances the market will fall, which is very reminiscent of the state of the US stock market from 2017 to 2019, where any bad news could be interpreted as good news. $BTC $ETH #币安钱包TGE #币安Alpha上新