It's very easy to get beaten up for an article that makes such a point, but I do want to express the overwhelming majority of people who are clearly bearish on U.S. stocks. All three major U.S. stock indexes are expected to retrace by no less than 30%, depending on how quickly the Fed cuts interest rates. First, it depends on the ability of other capital markets to resist beatings. But the probability of peaking this year is extremely high.
I have been tracking U.S. stocks for eight years, and there has been no substantial investment. Until the end of '21, it happened to be the time when I was building a position in the low-valuation sector of A-shares, and I tried the Nasdaq index of **2%**, and now I finally caught a good opportunity to liquidate my position. My approach was to sell 30%, 30%, 20%, 20% of my holdings between February and June. The selling speed is fast before and slow after.
Unlike the U.S. stock market, which peaked at the end of 22, after a sharp rally from 2020 to 2021, the vast majority of U.S. stocks** are in a high but not exaggerated stage. Even due to the epidemic, some industries have also suffered a sharp decline, and these companies are likely to be spared in this round of U.S. stock market crash. Due to the rapid recovery of the European and American economies in the epidemic, the fundamental growth of most of the top indexes can cover the growth of the market value of enterprises. To sum up, although that wave of rise is a bit expensive, the performance is indeed the top.
Bearish reason 1: The fundamentals and stock prices of most companies in the U.S. stock market have been completely detached. After 2023, many of the U.S. stocks** have been characterized by declining fundamentals or stagnant performance, resulting in the growth of stock prices in the past year relying on the improvement of valuations. And that did happen. Can it rise without performance? The other part of the **, such as NVIDIA, is completely supported by expectations, of course, it is indeed extremely capable in terms of performance. In fact, you can understand by looking at the Tesla that was hyped before. Similar to Tesla's logic, Tesla's stock price increased sharply before the performance actually improved, but then returned to a reasonable valuation, and finally hovered at a reasonable level for a long time. This is full of expectations, similar to CATL, which is expected to have a market value of 3 trillion yuan in A-shares, Eli Lillynuo and Nord, which rely on ** drug hypoglycemic drugs to take off, etc., all belong to this type.
Bearish reason 2: U.S. stocks can't escape the historical law of the interest rate cut cycle.
From a historical point of view, it is a high probability event that the U.S. stock rate cut cycle begins to be large-scale, and although history does not necessarily repeat itself, it will magically occur in some kind of approximate situation. After all, the interest rate of more than 5 points before, the assets denominated in US dollars, and the stable income of US stocks must be the best choice for the target. It is also understandable to attract funds from all walks of life to continue to increase their positions, but I believe that who these smart funds choose in the context of interest rate cuts must be like a mirror in their hearts.
Bearish reason 3: The financial strength brought about by influence is weakening.
For a long time in the past, the beautiful country can continue to use its military and financial superiority to harvest other countries to achieve the purpose of paying for its own debt. This time, however, economies have unexpectedly strengthened during the rate hike, with the exception of a few small countries like Sri Lanka, which are insignificant. However, the problems of the beautiful country itself are getting more and more serious, and the heavy burden of high interest rates will become more and more prominent, and it is expected that events like the one in Silicon Valley Bank will continue to occur, and the second quarter will be around this critical point in time.
Bearish reason 4: It's not that there are no alternatives.
Second, as the object of asset savings, excluding the dollar, US stocks, and oil, alternatives will also become viable. For example, low-level A Hong Kong stocks and various resource products. It is expected that these things will continue to shine during the weak phase of US stocks. All the assets that reflect the rhythm of the US stock market in the process of this wave of US interest rate hikes are worth paying attention to, and I have only listed the biggest directions.
Bearish reason 5: Confidence is the most important nucleus.
Any bull market is brought about by crazy confidence, from the suspicion of a bear market to the belief of a bull market. And now is the beginning of this turning point, the deep game between the eldest and the second will be determined by confidence, believe that there will be, there will be.
A little afterword: from a pure investment point of view, the innovation of U.S. stocks has a very great influence on A Hong Kong stocks, and the frontier of science and technology determines the continuous upward movement of the development ceiling. And on the long road of catching up and overtaking, there will definitely be a certain benchmark in the a**field, which is worth paying attention to!