1. The soaring cycle of energy and commodity prices has ended
The price of crude oil has dropped from a peak of US$125 a barrel in March this year to the current 80 a barrel. The price of oil has been stable and falling, and my country’s crude oil supply is relatively stable (it is a major customer in the Middle East and Big Goose); in the short and medium term, traditional Energy issues will no longer have a negative impact on our economy.
2. The CRB commodity index is also turning down
The CRB index, which reflects production costs and prices, has also fallen from its highest point in June this year;
Global inflation, CPI basically reached its peak in the third quarter of this year;
Already high inflation is showing signs of loosening and easing as energy and housing prices begin to slide. F
3. U.S. corporate profits decline
Although the employment data in the United States is strong, the labor market is in short supply, labor wages have become very expensive, and workers and corporate employees are living well, but the profitability of many companies is declining.
Companies that reported negative earnings growth in the most recent period include:
Amazon: -136%; Oracle -37%; Nvidia -46%; UPS (Express): -26%; Morgan Stanley (Finance): -18%; Target (Supermarket): -69%; Novartis Pharmaceuticals -21%; Walmart: -24%.
The current situation in the United States is: corporate profits are declining and debt is high; at the same time, a too strong dollar will affect U.S. exports; leading to a further expansion of the U.S. trade deficit.
U.S. chip giant Micron Technology’s performance fell 45% as its executives said customers from all walks of life were cutting chip orders.
South Korea’s chip production in August was -1.7%, and shipments were -20.4%; chip inventories are also surging.
Therefore, the United States will increase the interest rate twice to 4.25, and it will not be able to increase.
Now the whole of Europe has completely fallen into the pit because of the Russian-Ukrainian crisis, and the currencies of Japan, New Zealand and other countries have also depreciated significantly. In fact, when a country is in a deep recession, currency devaluation is actually the best way to get out of the recession.
4. The cold real estate market
Looking back at the domestic market: in September, which should have been “golden nine and silver ten”, domestic transactions fell by 21% month-on-month, and were about the same as the same period last year. Sales remained tepid as they were last year.
Everyone’s investment demand for real estate has dropped significantly, and most of the residential demand has been met, so the phenomenon of real estate oversupply will exist for a long time.
In general, the global economy has entered a trough period, and this trough period may continue for a year or two.
5. The US dollar appreciates, and US dollar-denominated assets fall
The most obvious performance is the Hong Kong stock market. Recently, two very good companies were listed on the Hong Kong stock market, and both broke.
Leap Motor went on the market, with a break of 20%;
Vanke Property (All Things Cloud) went public, breaking down by 5%.
Hong Kong stocks are really at the freezing point of valuation now, and many cheap high-quality assets just lack funds and liquidity.
When will the market start to recover?
The good news is that the three years of the pandemic will finally come to an end, and life will eventually return to normal.
The Fed’s rate hikes are also set to end at a low this year.
With the frequent blowing of policies such as the reduction of the first home loan interest rate, after this winter, spring should not be far away, right?
What is needed now is to maintain hope, wait patiently, and after the major events are settled, the harvest in the coming year can be fully expected.
The author plans to start adding positions to brokerages and those excellent companies that have the ability to sell their products to developed countries in the next 6 months.
$ Oriental Fortune (SZ300059)$ $ Anker Innovation (SZ300866)$ $ Tencent Holdings (00700)$
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