Uncertainty in the external market gradually digests how the world's major assets will be interpreted in the future?

Gold is expected to continue to strengthen A shares contingent market

  Global market outlook

  By Zhang Lu, All Media Reporter, Guangzhou Daily

  Last week, global market sentiment continued to rise, and major stock indexes rose in full.

Among them, the S&P 500 index, the German DAX index, and the French CAC40 index all rose more than 7%.

In the commodity market, according to Wind data, COMEX gold futures rose 3.81% and successfully stood at US$1950 at the close.

NYMEX crude oil futures fluctuated, eventually rising 4.75%.

Then, how do global assets interpret?

  US stocks:

  Upside still needs more positive economic and epidemic data

  According to Xinhua News Agency, US media estimated on the 7th that the US presidential candidate Biden has won more than 270 electoral votes in the 2020 US presidential election.

The US election situation is becoming more and more clear, will the world's major assets usher in a new round of reshuffle?

  Kyushu Securities said that the market generally believes that Biden’s policies are negative for US stocks, including tax increases, anti-monopoly, and opposition to traditional energy.

  China Securities Investment said that major assets such as US stocks and US bonds showed positive responses in the short term.

But the future fundamental trend is still at the core.

The central systemic upward movement still requires more positive economic and epidemic data, and it is difficult for U.S. bond interest rates to stay low for a long time under the background of economic recovery.

  Wall Street analysts have previously proposed that Biden’s victory but Congress’s divide and rule will benefit technology stocks, the alternative energy industry, the infrastructure industry, and export-led companies in the U.S. stock market, as well as the banking industry, defense sector, traditional energy stocks, and biotech Pharmaceutical sector.

  For many benefits, such as technology stocks, industry analysts say that under the divide and rule of the US Congress, Biden’s envisioned plan to strengthen the supervision of technology companies may be difficult to implement. This will affect Facebook, Apple, Amazon, Netflix, Google’s parent company Alphabet and Google. This is good news for companies such as Microsoft, whose market capitalization accounts for about a quarter of the S&P 500 index.

If the stock prices of these companies get a boost, it will easily push the S&P 500 index higher.

  In terms of alternative energy stocks, Biden proposed a "green energy revolution" plan during the campaign.

The green energy sector has fulfilled this expectation ahead of schedule and has soared for a while.

From September to mid-October, the Invesco Solar ETF has risen by 40%, but it has recently pulled back.

  On the negative side, Biden has always emphasized the need to strengthen financial supervision, so after taking office, it may cause a blow to bank stocks.

In addition, Biden has always been opposed to high prescription drug prices, and after Biden is elected, it may further strengthen the supervision of the pharmaceutical industry, which will bring a stronger impact to the pharmaceutical industry.

  Commodity:

  Gold price is expected to return to the $2,000 mark

  Central banks in various countries have unprecedentedly printed money to ease the impact of the new crown epidemic on the economy, which may trigger inflation, and gold is regarded as a hedging tool.

  Standard Chartered Precious Metals analyst Cooper emphasized that Biden's victory is the most favorable factor for gold. It is expected that the price of gold will rebound to $2,000 per ounce in the fourth quarter of this year and climb to $2,100 in the first quarter of next year.

  In terms of crude oil, strategists at JPMorgan Chase predict that if Biden wins the election and the Democrats win the Senate, oil prices will rise by as much as 15% under the combined effect of the weak dollar and fiscal stimulus measures.

Goldman Sachs predicts that if the Democratic Party wins, most of the policies may increase the cost of US oil production and limit the growth of shale oil supply.

  A shares:

  Corporate profits are still accelerating upward

  Last week, the A-share market rose generally. The CSI 100, CSI 300, SME Board Index, and CSI 500 Index all rose by more than 3%. As the U.S. election situation becomes clearer, how will the A-share market interpret?

  Guotai Junan believes that it should focus on profitability and take advantage of the trend.

Specifically: First, the domestic economic recovery is advancing in depth, and the profits of listed companies at the micro level have improved. The global economy is expected to be repaired in 2021 despite short-term ups and downs. Therefore, the upward profitability is the basis for the downward trend of the A-share market.

Second, the external risks have basically landed, and market risk appetite will rise from the bottom up.

Third, after the easing policy and liquidity expectations shift, risk-free interest rates and liquidity are no longer the core factors driving the current stock market.

The improvement of earnings beyond expectations and the continuity of the earnings boom will become the focus of investment strategies. Under the shock, the focus is on structure.

  Investment strategy research believes that, in the context of the gradual recovery of the global economy, China's exports continue to rebound, helping China's economy continue to rebound.

The earnings of A-share companies are still in the process of accelerating upward growth. As the economy rebounds, domestic liquidity continues to remain neutral and gradually slides to a tighter state, making the characteristics of liquidity driven to fundamentals driven more clearly.

The economic rebound has made more pro-cyclical industries appear more obvious investment opportunities, the export chain and the post-real estate cycle superimposed areas, such as home appliances, light industry, auto parts; bulk commodities such as nonferrous metals, chemicals, coal; and economic restoration Financial real estate repaired with extremely low valuations have greater opportunities.

A-shares are expected to break through the previous high and rise, ushering in an obvious new year's market.

  The Ding Luming financial engineering research team of the Research and Development Department of CITIC Construction Investment said that with the landing of external uncertain events, it is expected that the A-share market will start to rebound in the middle of the fourth quarter with the goal of 3500 points on the Shanghai Composite Index.

The short-term trend of the ChiNext is similar to that of the main board, and the performance of the fourth quarter is expected to surpass once again, and it is still the first choice for the fourth quarter.