Seductive approach: US stocks and Chinese securities have gone their separate ways. Wall Street talk, a deceptive ghost?

The US stock market continued to strengthen this week. NASDAQ entered a technical bull market. The CPI data for July was released this week. The monthly CPI rate for July was 0, and inflation basically confirmed a top spot. Stimulated by falling inflation, overall confidence in US stocks strengthened again this week. Energy, finance, and large technology stocks all showed impressive performance. One reason is that after Apple continued to rebound, stock prices have reached historic highs.

Major US stock indices all rose this week, with S&P rising 3.3%, NASDAQ up 3.1%, and Dow Jones 2.9%. After continuing to weaken, the general stock index also rebounded steadily this week, and the general stock index rose 1.5% this week. Industry-wise, the US stock industry indices all rose this week. Value stocks continued to recover, led by a 7.1% increase in energy, a 5.5% increase in finance, and a 5.1% increase in raw materials.

The most important news for US stocks this week was the announcement of the July CPI. The decline in CPI allowed the market to actually see a clear sign that inflation peaked and fell back, and led to a continuous recovery in market sentiment:

① On Wednesday, the US CPI data for July was released. The US CPI for July increased 8.5% year on year, expected to increase 8.7%, and the previous value increased 9.1%. Judging from the monthly rate, there was no month-on-month increase, and CPI peaked at last.

However, judging from the disaggregated data, the core CPI after deducting food and energy was 5.9%, unchanged year on year for two consecutive months.

Specifically, in terms of itemized data, the overall decline in energy prices contributed the most to the overall decline in CPI from month to month. Used car prices also fell month-on-month, and food and commodity prices remained strong

The core CPI, the index of all items excluding food and energy, rose 0.3% in July after rising 0.7% in June. Among them, what we are most concerned about is the rent index, which still contributes a lot to the core CPI.

Among them, the housing index continued to rise, but the increase was smaller than the previous month, up 0.5%, compared to 0.6% in June. In July, the rent index rose 0.7%, and the equivalent rent index rose 0.6%.

Overall, the CPI data for July indicates that inflation has largely peaked, but after the CPI was announced, expectations for CME interest rate hikes also changed again, and the probability of raising interest rates by 50 BP in September increased

The performance of Hong Kong stocks continued to be sluggish this week. Among them, Hang Seng Technology fell 1.5% and the Hang Seng Index fell 0.1%. In terms of industry, the energy sector rose 5.8%, the raw materials industry rose 4.3%, and the telecommunications industry led the way by 2.6%. The performance of healthcare and information technology was still sluggish, and the short-term sentiment of Hong Kong stocks was still relatively sluggish:

1. This week, China Telecom and China Mobile successively revealed their mid-report results. Compared with Alibaba's 10% cloud computing growth rate this quarter, the telecom giants' cloud business growth rate embarrassed BATJ:

Take China Mobile as an example. In terms of mobile cloud, it has built the differentiated advantages of integrated cloud networks, cloud data integration, cloud intelligence integration, and cloud-side collaboration, and continued to promote leading mobile cloud product technology. Revenue grew rapidly, reaching RMB 23.4 billion, an increase of 103.6% over the previous year. By the end of June, more than 3,500 cloud orders had been signed, driving revenue exceeding 13 billion yuan, and more than 1,100 cloud projects for central enterprises and state-owned enterprises. They had successfully set a number of cloud benchmarks for industries such as government cloud, education cloud, and medical cloud, and mobile cloud accelerated its progress towards the first camp in the industry.
Take China Unicom as an example. In the first half of the year, China Unicom Industrial Internet achieved revenue of RMB 36.9 billion, up 31.8% from the same period last year, contributing more than 70% of the company's new revenue, and has become a veritable “first engine” for performance growth. Among them, “Unicom Cloud” revenue doubled, reaching RMB 18.7 billion, an increase of 143.2%; 5G applications accelerated from “model room” to “commercial housing”. In the first half of the year, the 5G industry application contract scale was nearly RMB 4 billion, the number of 5G virtual private network service customers reached 2,014, and the cumulative number of 5G industry application projects exceeded 8,000; the utilization rate of data center cabinets exceeded 68%, achieving revenue of RMB 12.4 billion, an increase of 13.3% over the previous year; the number of IoT connections exceeded 335 million, achieving revenue increase of RMB 4.3 billion over the previous year 44.1%; The big data business maintained its leading edge in the operator industry. Blockchain patent reserves ranked first among central enterprises, and revenue increased 48.9% year-on-year in the first half of the year to RMB 1.9 billion.
Compared with Mobile and Unicom, Ali's 2B business has shown a crisis. Under anti-monopoly promotion, BATJ's 2B logic has not seen a turning point for the time being. Instead, the big three state-owned telecom companies and Huawei are making great strides. This is the key to the continued slump after Ali's performance was announced this week, and SoftBank has continued to sell Alibaba recently, and short-term pressure continues;

2. The results of Tencent and others are about to be disclosed. Prior to the disclosure of results, the market was still in the midst of performance concerns. Domestic consumption was generally poor in the second quarter, affecting all aspects of the consumer internet. E-commerce, advertising, games, payments, etc. all faced major phased headwinds. Therefore, performance concerns have always plagued China Securities, and compared with FAAMG, which has already published results in the US stock market, the disadvantage is obvious, causing US dollar capital to continue to flow back to the US.

3. A recent US 13F report revealed that Qiaoshui, which is most optimistic about Chinese assets, also sold off China's securities in a big way in the second quarter. Qiaoshui cleared 99 stocks in the second quarter, including 7.48 million Alibaba shares worth US$813.9 million; and JD 2.14 million shares, worth 123.9 million US dollars, in addition to NetEase, Bibili, and Didi.

In addition, the century-old asset management giant BG also drastically reduced its holdings in Pinduoduo, Baidu, Tencent Music, Shell, and Bilibili in the second quarter, and also cleared JD and Alibaba.

It can also be seen that the current attitude of European and American capital towards Chinese securities and Hong Kong stocks is still very likely to continue to rob Hong Kong stocks, which still do not see a turnaround in the short term.

This week, A-shares continued the recent trend of contraction and fluctuation. Driven by resource stocks and financial stocks, the Shanghai Stock Exchange Index rose 1.5%, the Shenzhen Stock Exchange Index rose 1.2%, the Shanghai Stock Exchange rose 0.8%, and the Shanghai Stock Exchange 50 rose 0.8%, while the performance of racetrack stocks was still sluggish. This week, the GEM index rose slightly by 0.3%. In the industry, coal rose 8.4%, petroleum and petrochemicals rose 6.3%, leading the way. Brokerage firms and insurance also performed well this week.

In the last three weeks of earnings season disclosure, the market still lacked the courage to go long. The performance of high-ranking stocks continued to cool down this week. After phased speculation, chip stocks faced significant pullback pressure. After all, the overall semiconductor boom in the second half of the year was in a downward cycle. Currently, in the process of global decline, along with the release of semiconductor production capacity, the global semiconductor industry is in a downward cycle. In the second half of the year, judging from the prosperity of the high-base semiconductor industry last year, the H2 semiconductor industry declined more rapidly. Overall performance will be clearly under pressure As a result, semiconductor hype is more of a “short-term hype” catalyzed by “patriotism,” and lacks performance support. In addition to semiconductors, sectors such as Xinchuang and Encore have also collectively ushered in emotional release, but from a fundamental point of view, they are lackluster, and be wary that the hype about the subject will end at any time.

The short-term hype itself was detached from fundamentals. In the mid-report season, before the performance was disclosed, the market lacked the courage to go long on track stocks, and the market generally fell into an adjustment trend of “lack of excitement points and lack of hot spots”. As for the entire market's focus on the NEV circuit, at the critical point of disclosure in the interim report, the market “lacked excitement points”. On the one hand, the telecommunications sector, which had the highest level of prosperity in the early stages, had fully rebounded and repaired, and the valuation and trading crowds all returned to a high level of congestion. The position is facing short-term correction. On the other hand, the market is concerned about Concerns about the interim results have intensified, causing continued turbulence before the results were disclosed.

After the market closed on Friday, the July credit data was released, which can be said to have completely fallen short of expectations. In July, 756.1 billion yuan was added in social finance, which was significantly lower than Wind's agreed forecast of 1.39 trillion yuan, and the social finance growth rate fell slightly to 10.7%. Looking at the structure, the main year-on-year contribution of social finance in July was still government debt, but compared to the previous two months, the driving force of government bonds was greatly reduced (870 billion yuan year-on-year increase in June and 217.8 billion yuan year-on-year increase in July), and RMB loans and corporate bonds issued to the real economy were a drag, increasing 430 billion yuan and 235.7 billion yuan respectively. In July, RMB credit increased by 679 billion yuan, a year-on-year decrease of 401 billion yuan. The amount added was also a new low for the same period since 2017. Apart from the obvious weakening in terms of total volume compared to June, previous structural improvements did not continue. July also showed a “high bill, weak loan” structure, and both short-term loans and medium- to long-term loans for residents and the corporate sector showed negative year-on-year growth.

Credit leniency is still under strong pressure, and the market is generally in the midst of a dance where liquidity is abundant, yet fundamental expectations continue to weaken. The relatively good news is that the M2 growth rate is still accelerating, and the M2-social finance growth gap continues to widen, indicating that the financial market is still relatively well-funded, which also supports the A-share market.

Next, under current economic pressure, the currency is easy to loosen and difficult to tighten. The “easy money” environment is most beneficial to the style of technological growth. In the context of relaxation, we are still optimistic about growth stocks, new energy circuits, and wind storage, and focus on small and medium market leaders whose performance has exceeded expectations in mid-term reports.

Comparatively speaking, in the second half of the year, along with the fall in high inflation and the gradual restoration of the supply chain, overseas new energy vehicle consumption is expected to pick up, and as the second half of the year enters the peak season, new energy vehicles are still the focus of the industry. Against the backdrop of a massive collective sharp decline, the cost side of the automobile industry is also improving. The cost side of the entire electronics industry is improving, including complete vehicles. Therefore, in the next phase, we will focus on exploring companies that continue to improve the cost side of automobiles in the next phase. During the peak season, the market in the electric vehicle charging and storage industry will continue, focusing on next year's sales segments such as energy storage, HJT batteries, and integrated die-casting.