The Global Stock Market Is Still Driven By Fundamentals. US Technology Stocks Are Undergoing Normal Price Adjustment.

"P", "new growth" stocks (technology stocks) continued to decline last month, and we have been wary of the signs that this decline signal has evolved into a long-term deterioration. Like the collapse of the NASDAQ bubble in March 2000 - the collapse of a handful of biotech stocks triggered the collapse of the NASDAQ. But similar crash did not come. In fact, last week's "4%-5%" rebound of new growth stocks indicates that the upward trend of the US macroeconomic will bring upward force to the stock market. The proportion of biotech, electric cars and Internet stocks that have been poorly performing recently accounted for less than 25% of NASDAQ's market capitalization, much less than that of technology stocks accounted for by the time of the bubble burst period. The market value of the shares is 75%. At the same time, the weakness of these plates has not been accompanied by the risk brought by the risk of other major markets. < /p >
At the same time, it is gratifying to note that the correlation between US stocks has remained at a low level, P. Therefore, the influence of "new growth" stocks is limited, to a large extent confined to the "new growth" sector. In the April 3rd report, we mentioned: "the decline of biotech stocks and electric vehicle plates is a normal adjustment of prices". "As the global economy continues to recover, those growth oriented investors will face more choices." The loss of "new growth" stocks may be the zero sum income of other growth sectors. From this perspective, the recent recirculation of capital into emerging markets seems to us to be a reasonable trend for capital to pursue growth oriented. < /p >
< p > we do not think that the fall of the "new growth" of the US can serve as a vane for the whole US stock. Because other risks and growth sensitive capital markets have not experienced substantial adjustment. The credit spreads of US bonds remain at a low level. Sovereign debt in Europe's peripheral economies, such as Spain and Italy, is not under pressure. Emerging market stocks outperformed developed markets last month, even those with the highest risk. < /p >
The above phenomenon is different from that of the 2000 a href= "http://www.91se91.com/news/index_cj.asp" > NASDAQ < /a > crash. P At that time, the credit spreads widened in the bond market, and the emerging market stock market was in a downward phase compared with the developed market. < /p >
< p > at present, we still believe that the recent decline in "new growth" stocks is a normal adjustment of prices. At the same time, investors are also aware of the need to adjust valuations to match profit expectations. In terms of investment strategy, we should grasp the cyclical investment opportunities and suggest that we should match the Japanese, European (except the British) stock market and emerging market stock market (Asia) which is easy to be influenced by the developed countries. < /p >
< p > there is another noteworthy phenomenon. The emerging market a href= "http://www.91se91.com/news/index_cj.asp" > Investment Fund < /a > subscription and subscription of technology stocks began to split in the late 2012, but before that they have been relatively parallel. < /p >
< p > 2013 first quarter, < a href= "http://www.91se91.com/news/index_cj.asp" > emerging market < /a > the fund welcomed the subscription peak, and then experienced 14 months of net redemption. At the same time, the technology stock fund is at the peak of redemption. In this sense, the recent decline in "new growth" stocks and the rebound in emerging markets can be interpreted as: the relative value transaction in a broader "emerging" space. < /p >
< p > there is a view that capital flows into emerging markets because of defense, because investors believe that the valuation of emerging market stocks is attractive. However, we analyzed the stock valuation (based on the P / E ratio and the market rate) and the inflow of funds in different regions of emerging markets, and found that there was no obvious correlation between them. We conclude that capital inflows in emerging market stock markets are mainly related to earnings. < /p >
In the Asia Pacific region (except Japan), except for health care and industrial sectors, the earnings performance of other sectors in the fourth quarter of last year is closely related to the stock market trend in the first quarter of this year. P The lower the expected earnings performance, the lower the stock market will be in the first quarter. At the same time, the adjustment of earnings expectations is positively related to stock performance. The bigger the profit expectation is, the stronger the performance of the stock market will be. < /p >
< p >, so we believe that the global stock market is still driven by fundamentals. < /p >