Chinese assets have experienced a huge outbreak!
Today, both the Hang Seng Index and A-shares saw a comprehensive surge.The Hang Seng Index went through a two-week consolidation period, finally choosing to break upwards, indicating that the market for Chinese assets is getting ready to rally.
I just happened to come across a very good analysis, and I'm sharing it with the community.
Note: This content is not original, but shared from elsewhere. The intention is to share for learning and analysis together.
This market rally is reminiscent of the one in mid-September, with China about to announce a bullish monetary policy, and military power play. The Liaoning and Shandong fleet conducting dual aircraft carrier exercises, along with the official introduction of the J-35A, are crucial factors for a potential surge in Chinese assets.
At this moment, Chinese aircraft carriers and fighter jets are frequently appearing, possibly as a hedge against risks associated with the U.S. elections.Regardless of who becomes the next U.S. president, the policy towards China is unlikely to change significantly. It is highly probable that to address internal conflicts, the conflict will intensify further. Displaying military strength can effectively offset such concerns to some extent.
The competition between China and the U.S. is essentially a tripartite competition in technology, finance, and military, with the military aspect being the crucial core foundation.The strength of the United States primarily relies on its strong military power. With the support of military power, there is subsequent technological monopoly and financial dominance. China's assets have been suppressed for more than 3 years, actually because capital is pricing in China's loss in the China-US competition, but China's show of military strength is to some extent a warning to the short sellers.
Let's not discuss the macro situation for now, instead let's talk more about the trends of Chinese assets after the U.S. election. Actually, recently everyone should have noticed one thing, that is, despite the turmoil in the U.S., the Hang Seng Index has basically maintained a sideways trend. In the past, any slight movement in the external market would have caused a sharp plunge in Hong Kong stocks, but recently they have been unusually resilient.
This in itself indicates that Chinese assets currently have a certain resilience. Coupled with the recent good economic data, in October, the Purchasing Managers' Index (PMI) for manufacturing, the Business Activity Index for non-manufacturing, and the comprehensive PMI output index were 50.1%, 50.2%, and 50.8% respectively. Compared to the previous month, they rose by 0.3, 0.2, and 0.4 percentage points respectively, showing signs of economic recovery. In contrast, recent economic data in the U.S. has begun to show signs of decline.
This in itself indicates that Chinese assets currently have a certain resilience. Coupled with the recent good economic data, in October, the Purchasing Managers' Index (PMI) for manufacturing, the Business Activity Index for non-manufacturing, and the comprehensive PMI output index were 50.1%, 50.2%, and 50.8% respectively. Compared to the previous month, they rose by 0.3, 0.2, and 0.4 percentage points respectively, showing signs of economic recovery. In contrast, recent economic data in the U.S. has begun to show signs of decline.
Although the election is uncertain, everything will settle after the election. If Harris becomes president, it will simply continue the policies of the past 4 years. Since things are already at their worst, the most probable scenario next is a rebound. If Trump remains president, tariffs and technology blockades will indeed intensify, but on October 8th, China also had a financial meeting. According to earlier foreign media reports, if Trump remains president, China's fiscal policy efforts will increase.
The rise and fall of the stock market often depends on liquidity. As long as China continues to inject liquidity on a large scale, the index is unlikely to drop significantly. Many times, the movement of the stock market has little to do with the economic fundamentals. Based on this judgment, we have made early arrangements for Chinese assets.
It seems that we may have bought in at the starting point of the rise, hoping for good news in the future.Everyone must remember one thing, the outbreak of Chinese assets often occurs in a very short time, with the market cycle completing very quickly. Many times, it is extremely volatile, so always be prepared to take profits and stop losses at any time.
So the next question is, if Chinese assets further break out, what should we buy?
1. Brokerage and trading platform.During china's bullish market, brokerages often perform well. This logic also applies to Hong Kong Exchanges and Futu to some extent, which should be easy to understand. When trading volume increases, brokerages naturally earn more from transaction fees. This is very easy to understand from a fundamental level.
2. Leading Chinese concept stocks.Our definition of leading Chinese concept stocks is that the market cap is at least greater than 40 billion US dollars. $MEITUAN-W (03690.HK)$ 、 $PDD Holdings (PDD.US)$ 、 $TRIP.COM-S (09961.HK)$ 、 $BABA-W (09988.HK)$ 、 $TENCENT (00700.HK)$ 、 $JD-SW (09618.HK)$ 、 $XIAOMI-W (01810.HK)$ Wait, most of them are some well-known large companies.
3. Some ETFs in the A-share market.Relatively speaking, this is also a relatively stable investment target. In the A-share market, we need to learn to avoid the risk of individual stocks. Buying some industry ETFs is often a very good choice, such as chips, artificial intelligence, brokerage, liquor, and consumer all have corresponding ETFs.
4. Several major ETFs of Chinese assets,There are Hang Seng Tech Index ETF, Hang Seng Index ETF in the Hong Kong stock market, as well as corresponding double long positions. In the A-share market, there are 300ETF and SSE A50 ETF, while in the US market, there are $iShares China Large-Cap ETF (FXI.US)$ And $KraneShares CSI China Internet ETF (KWEB.US)$ For the more aggressive investors, they can buy leveraged ETFs. $Direxion Daily FTSE China Bull 3X Shares ETF (YINN.US)$ And $Direxion Daily CSI China Internet Index Bull 2x Shares ETF (CWEB.US)$。
For others, I think it's best not to buy them. When it comes to Chinese assets, stability should be the top priority, not aiming for big profits, just steady and profitable!![]()
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RC84 : The stock market's lingering at a low level always has reasons behind it. The fact that profits are not keeping up is true, and the current value of many Chinese technology stocks is actually not cheaper than the record highs of US stocks, mainly due to speculative activities led by some people and the hype gathered in the stock market. Be cautious once the trading volume is low.
没有咖啡的吃茶店 OP RC84 : Indeed, the market for assets in China often comes and goes very quickly, also with sudden movements. However, there are great opportunities in between, suitable for short-term traders to pay attention to. I actually made a profit in early October. But when it dropped later, I bought back some to see the opportunity. Now it seems like a wise choice.
SKYWalkers : The more the CCP strengthens its military strength, the worse the situation becomes.
The more it engages in an arms race, the more it is just following the old path of the Soviet Union's bankruptcy.
没有咖啡的吃茶店 OP SKYWalkers : Let's not talk about politics, just discuss the impact this behavior has on the stock market.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
SKYWalkers 没有咖啡的吃茶店 OP : All the posts you make are politically related.
How can the economy be separated from politics?
The expansion of the Chinese Communist Party's military requires money.
Where does the money come from?
Like the 10 trillion market rescue, printing money?
How long can it be printed for?
71792947 SKYWalkers : Used for sale by Crooked Frog50What do castrated goods produced in the US show? showIQ? haha
SKYWalkers 71792947 : You are such a military idiot.
There is talk of military expansion. There was no need for the expansion of the Chinese army, but the inexorability of the jubilee that year led to a state of despotism.
霸坝 SKYWalkers : China only has one rival, which is the United States. Industry, military, economy, culture, and technology are the pillars of American hegemony. Do you understand the reasons and purposes behind China showcasing its military strength?
SKYWalkers 霸坝 : Wrong! As I said, you are a military idiot.
When you say the opponent is usa, it further illustrates that you have been severely brainwashed by the Communist Party.
Without the help of usa, there would be no economic growth in the Communist country.
The Communist Party's opponent is the Communist Party itself, otherwise it would not have angered the people to the current extent.