Although the rapidly deteriorating new crown epidemic in the United States has made secondary infections a topic of market concern again, all this cannot withstand the positive confidence that the Fed has brought to the market. Under the influence of ultra-low interest rates and the highest fiscal scale in history, the US employment and housing markets have performed better than expected, simultaneously driving the stock market including Asian stocks to turn red. However, according to the actual rhythm of fund trading, it can be found that foreign capital has become more cautious about inflows to Asian stock markets.
According to statistics, there were relatively few Asian stock markets that could be favored by foreign investors last week. Except for the mainland, Taiwan, and the Philippines, the rest of the Asian stock markets are under pressure from foreign investors to sell. Even the Northeast Asian stock market with the support of the technology industry supply chain, Foreign capital was not treated equally in the last week.
Taking the Korean stock market as an example, foreign capital sold more than US$261 million, but foreign investment in Taiwan’s stock market was over US$343 million; it can be seen that under the interference of the second epidemic returning to Northeast Asia, foreign investment Buying is still a little hesitant.
However, despite continued capital wait-and-see, Asian stocks generally made a red last week. The Shanghai-Shenzhen 300 Index and the Taiwan Stocks Weighted Index rose 6.77% and 2.13%, respectively. The ASEAN stock markets except India and Vietnam also received dividends. In addition, foreign capital has also appeared in the mainland stock market for 15 consecutive weeks of net inflows.
Since the beginning of this year, net inflows have totaled US$21.01 billion, making the mainland stock market the only bright spot among Asian stocks. It can be seen that the continuous opening of the mainland’s capital market and the long-term theme of technology are still the focus of foreign capital’s continued deployment in Asia.
Lin Yahui, a global market strategist at Morgan Stanley, said that the job market and housing market in the US are better than expected, mainly due to the results of unblocking in advance. However, another side effect of unblocking in advance is the severe deterioration of the local epidemic, which may affect the decision of the state authorities to close the city or not, which will have other impacts on the subsequent job market and corporate profits. . So for investors at this stage, seeing good economic data does not mean that the capital market will be smooth in the future, because the development of the epidemic may disrupt the pace of economic recovery at any time.
Lin Yahui pointed out that the outbreak of the second epidemic in the United States has indeed allowed some markets to re-examine the profit expectations of enterprises, that is, the data revision in the second quarter is likely to occur, and it may encounter new variables in the third quarter. Therefore, at this stage, the best strategy for investment in financial assets is multi-asset allocation, with income as the core, especially for credit bonds, it should be the main force for income allocation.
Zhang Zhining, product manager of Morgan A China A-Share Fund, said that compared with other markets, the mainland has better control over the epidemic, and the government’s measures to promote economic growth are also more clear. It is indeed more predictable in long-term investment. The People’s Bank of China has lowered the rediscount and re-loan interest rates since July to continue to reduce corporate financing costs.
In June, both official and Caixin PMI data were better than expected, and the service industry PMI also rose to 58.4, the highest since April 2010. New highs; local data such as new export orders, industrial profits and auto sales continue to turn red, so the mainland’s second-quarter GDP, expected to be announced on July 16, is expected to double, and is expected to be the first country in the world to emerge from recession.
Zhang Zhining pointed out that the stock market has become a leading indicator of the expected improvement in mainland data. The recent financing balance of the Shanghai and Shenzhen Index has refreshed its highest level in four years, and the turnover of the Shanghai and Shenzhen markets has returned to the trillion yuan mark. Net buying also rose to a new high in the past two weeks, driving the GEM, which is dominated by small and medium-sized stocks in the new economy, to a four-year high, and even the Shanghai Composite Index has reached a high of nearly half a year.
On the other hand, China and the United States are committed to decoupling each other, which has also contributed to the recent upsurge in the stock markets of the mainland and Hong Kong. Zhang Zhining pointed out that, in addition to the mainland technology giants listed in the United States planning to return to Hong Kong for listing, under the push of funds, in addition to the GEM index clearly leading the market this year, it is expected that the valuation is lower and can provide a higher dividend. Blue chip stocks such as finance and real estate still have room to lead the index upwards, including the Shanghai Stock Index and the Shanghai and Shenzhen 300 Index, etc., which are expected to benefit simultaneously.
Lin Yahui said that looking into the second half of the Asian stock market, investors should pay special attention to whether the second epidemic in the United States will affect corporate profits, and whether the election of the US president and Congress at the end of the year will change the existing tax cut policies, as well as China and the United States. Disputes between the two major powers in the trade and supply chain in the future. All these variables will bring turbulence to the market. Investors should still maintain the concept of risk when allocating assets.