Today, A-shares traded 1.86 trillion, with a median increase of 0.66%. What is gratifying today is that both large-cap and small-cap stocks showed balanced growth without any uneven performance.
One very important factor is that today there was a substantial influx of funds into consumer-related sectors, with retail rising by 5.6%, dairy by 5.2%, liquor by 3.4%, food processing by 4.4%, and aquaculture by 2.6%. These sectors have underperformed the market due to domestic deflation and low consumption in recent years, making today's collective rebound quite rare.
From a logical analysis, there are two reasons: one is that as we approach the end of the year, local governments across the country are restarting a round of consumer vouchers to activate consumption using leverage effects. The other is that the market is beginning to accept and believe that the government will indeed implement loose policies next year to stimulate domestic demand, making currently undervalued sectors have the potential for early positioning.
I prefer to believe it's the latter, as it has more imaginative space. After three years of stagnation, the consumer sector is expected to welcome a significant rebound. On the other hand, the consumer sector has always been a major holding for northbound capital, and its activity helps restore foreign confidence in A-shares.
Although this ZZJ meeting did not announce specific numbers, it expressed a willingness to implement loose policies next year in its wording, and market expectations are gradually rising. For example, the critical fiscal deficit rate was previously expected to be in the range of 3.5-4%, with only a few optimists forecasting 4%, but now more and more analysts are predicting it will exceed 4% next year.
Don't underestimate this tiny gap of 0.0X percent, as its base is a GDP of 120 trillion. Therefore, even a 0.5% difference represents an increase of several hundred billion in currency.
Additionally, with expectations of a 40-50bp rate cut next year, when government bond yields drop to 1.5%, some funds can definitely be squeezed out of bank deposits. At that time, as long as A-shares show a slight recovery with a 10-20% increase, it can trigger a siphoning effect, gradually pulling in some funds that cannot resist temptation.
Objectively speaking, A-shares indeed have a long-term poor return rate, but during certain emotional cycles, anything can happen. So maintain patience, wait for the next time it goes awry, and then give the bed to the excited patients.
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1. As the end of the year approaches, more readers are asking about personal pension fund subscriptions, so I will give a simpler suggestion. Considering the longer lock-in period, those with an annual taxable income below 200,000 have no need to subscribe and might as well invest in other accounts. 200,000 is a threshold; subscribing to personal pension funds only has value for those with taxable income above 200,000, and the higher the income, the greater the tax avoidance benefit. Especially for high-income individuals earning over a million annually, subscribing is equivalent to a 50% discount, so don't miss out.
As for what to specifically purchase in the pool, it's up to you. If we consider 10, 20, or 30 years as a benchmark, insurance, A-shares, and government bonds may be more or less equal. However, at this current time point, I believe the cost-performance ratio of A-shares may be slightly higher because government bonds, insurance, and money market funds are all at historically low yield levels.
2. The Nasdaq has officially broken through 20,000 points, reaching an all-time high. Stocks like Tesla, Google, Amazon, Meta, and Netflix have also hit records. Due to Buffett reducing his stake in Apple earlier, it brought some psychological pressure to those following his moves. To be objective, Buffett's sale of Apple at that time resulted in a loss; the largest reduction in the second quarter had an average price of about $186, while the latest stock price is $246.
I also reduced some Apple shares at 230, but the funds I released were reinvested into the S&P 500 index fund, which has performed decently in this wave. Regarding the US stock market, my plan is to hit the peak without predicting it. I can tolerate a pullback and will retreat when the weekly average falls below MA20, which will give back some profits, and I'm okay with that.
3. The tenth batch of national centralized procurement has officially started, and we've been hearing various news about price reductions. Today, the pharmaceutical and medical indices performed weakly, underperforming the market. Some domestic generic drug prices have dropped by more than 90%. Previously, foreign pharmaceutical companies sold tablets for 8-9 yuan, but this time the winning bid prices are only 0.1-0.2 yuan. I think most people share my doubts: do two drugs with a price difference of more than ten times really have similar effects?
I searched and learned that most drugs developed by foreign companies have already passed the patent protection period, so domestic pharmaceutical companies can replicate them based on publicly available information. Once replication is successful, it must undergo a consistency evaluation to ensure that the replicated drug is similar in efficacy to the original. That's roughly it; it is impossible to be exactly the same, but they won't be far off. Additionally, many netizens have reported experiencing side effects from generic drugs, which is also a probable occurrence.
4. Today, according to Nikkei news, Japan's average house price-to-income ratio is around 10, while in the Tokyo area, it has reached 18 times. This means that the average house price in Tokyo is 18 times the local average annual income. A house price-to-income ratio below 10 indicates less pressure to buy, leading to a comfortable life, while a ratio of 10-20 gradually increases, and cities with a ratio exceeding 20 experience significant purchasing pressure. In Beijing and Shanghai, the ratio is around 25, with Shenzhen being the highest city in China at about 35 in the first half of the year, though the latest data should be lower than that.
That's all for tonight.