China's Assets Buckle Up for Second Round of Gains?

Urgent Cooling Down! The Chinese Asset Roller Coaster Finally Puts on a Seat Belt!Ever since a suite of economic stimulus policies was announced, China's capital market has been on a wild ride, pullin...

Urgent Cooling Down! The Chinese Asset Roller Coaster Finally Puts on a Seat Belt!

Ever since a suite of economic stimulus policies was announced, China's capital market has been on a wild ride, pulling the Shanghai Composite Index from 2,700 points to 3,670 points in one breath.

However, on the first day after the National Day holiday, the hot market was doused with a bucket of cold water, opening high and closing low, followed by several days of deep adjustments, bringing the Shanghai Composite Index back to 3,200 points.

The ups and downs are more thrilling than a roller coaster ride.

Why does the surging Chinese capital market need urgent cooling down? Why is cooling down actually a good thing, preventing a "plundering" of national assets?

Today, let's discuss these issues. Writing is not easy, so welcome to like, share, and bookmark.

The Chinese Asset Roller Coaster Has Stabilized

Recently, the domestic capital market has been thrilling, with stock prices rising and falling, affecting the hearts of countless people.However, just as the once lifeless Big A finally heated up, the higher-ups urgently pressed the pause button:

Firstly, on the morning of October 8th, a press conference was held with high expectations from the public, but it did not announce any new stimulus measures, which was far from the rumored 4 trillion 2.0 version circulating in the market beforehand.

As Big A was going through a historic bull run, this significant press conference was held in such a low-key manner, making it particularly meaningful.

Secondly, on the morning of October 8th, the Financial Times suddenly published a message stating that financial regulatory authorities had provided guidance through the window, strictly prohibiting bank credit funds from entering the stock market in violation of regulations.

The prohibition of credit funds from stock speculation has a long history and has always been a red line in financial regulation. Such window guidance is also quite common, to put it bluntly, it's an internal system matter. However, the sudden public release by the media directly affiliated with the central bank makes the underlying message clear.

These two pieces of news were like two buckets of ice water, instantly cooling down the market. Big A, which opened with a limit up on the morning of the 8th, began to turn downward, initiating an emergency correction.

In a moment of calm:

To be honest, the recent spectacle of Big A is unprecedented, and this time the momentum is a bit too fierce.China's economy has been "stable for a long time." After the Federal Reserve's interest rate cut, the higher-ups unleashed a series of heavy stimulus policies, directly causing the major A-shares to make a 180-degree turnaround.

In just six trading days, the Shanghai Composite Index was pulled from 2,700 points to 3,670 points, surging nearly 1,000 points. Even seasoned investors of more than a decade have never seen such a scene.

From the perspective of investors who have already "eaten meat," such an increase is naturally the more the better. The more it rises, the more they earn, and they wish for the storm to come even more fiercely.

However, it is obvious that at the start of the bull market, more short-term "speculative" funds that come in and out quickly are entering first, while long-term funds are still observing the market situation.

For this potential arbitrage behavior, it is obviously something we fear:

A slight carelessness can lead to the spread of panic, and when that happens, the higher you fly, the harder you fall, and those who get hurt are still the small retail investors who enter the market blindly.

From an even higher perspective, we do indeed need to stimulate the stock market to boost the economy. The various major moves recently released by the higher-ups, and even the rare allocation of 800 billion as "special stock market funds," have already shown their attitude.

But at the same time, what we need is a slow and long bull market, not a crazy one. Only the former can have a certain stimulating effect on the current economy, while the latter will only bring uncontrollable risks.

It is also for this reason that we saw the emergency braking after the National Day holiday, which tied a safety belt to the Chinese market at a critical moment. It is indeed time to calm down, otherwise, what we may face is a major plundering of the assets of the entire population.Avoid a massive plunder of national assets!

A-shares soar, with some people making 520,000 in the morning, and others taking the opportunity to achieve financial freedom. It seems that a glimmer of hope has finally arrived, and a carnival is upon us.

However, many people have forgotten that the stock market carries risks, and entering it requires caution. The idea that everyone can get rich through the stock market is undoubtedly a pipe dream.

Especially some young people are too aggressive, as if the stock market is littered with gold. Even if they have to take out loans, they rush to get on board and head to this feast of wealth, trading stocks in the same way as they would trade cryptocurrencies.

Moreover, the total amount of deposits in the household sector currently stands at 147 trillion. Even if only 10% of these deposits flow into the stock market, it would amount to a staggering 14 trillion in funds, and one can imagine how high the tide can be pushed.

But a fundamental truth is that a storm-like surge will inevitably lead to an eventual avalanche.

When the avalanche truly arrives, the massive wealth accumulated by the entire nation will face a massive plunder. How many people will go bankrupt, and how many will end up on the streets? In the end, only a few capitalists will profit, while everyone else will be harvested like a crop of leeks.

Therefore, the proactive cooling of the capital market this time is extremely crucial and successful. It can be said that after experiencing a roller coaster ride, a safety belt has finally been fastened.

Next, China's capital market will enter a stage of healthy development.On the one hand, the US dollar has entered a rate-cutting cycle, and the space for our economic policy to be implemented is becoming increasingly larger in the future;

On the other hand, it is not difficult to find from the previous package of economic good policies that the country's determination to boost the economy is as firm as a rock, and it is very likely that more good policies will continue to be released.

Therefore, overall speaking, this bull market must not have ended yet, but after experiencing the initial "irrational crazy bull", the current market has entered the second stage.

In this stage, the big A is bound to divide, the era of the whole plate rising has ended, only those high-quality assets will continue to rise, and the big market will bid farewell to the crazy rise, but show a trend of fluctuating upward.