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With the ups and downs of the stock market, what are you still looking forward to? With the signing of the China-South Korea trade agreement, the arrival of zero tariffs, and the intervention of foreign capital, the future market will be even more confusing
Yesterday’s stock market was characterized by both large and small-cap stocks rising, which once again triggered concerns about the nature of the bull market. , discussion of the shortcomings and styles of the Bull Market.
The "Daily Economic News" reporter noticed that many institutions believe that the nature of this bull market is driven by valuation rather than profit. Sinolink Securities analyst Li Lifeng and research assistant Yuan Wenting believe that a bull market rise can be roughly divided into two categories. One is due to the start of the economic cycle and improvement in corporate profits. The market relies more on profits to push up the index. This is a real bull market. The other type of bull market is due to changes in the allocation of large categories of assets and the reallocation and transfer of residents' assets, which transforms extremely abundant liquidity into a virtual economy. The market relies more on estimates. value to push the index upward. In such a bull market, since corporate profits have not improved and cannot keep up with the rise in stock prices, valuation inflation is more often seen as a bubble. The brokerage believes that next, investors will have to transition from making money lying down to making money standing up.
Chen Jie, an analyst at GF Securities, said that based on their exchanges and observations, there is currently a consensus and a point of controversy among institutional investors.
The consensus view is that more people believe that the economy will stabilize or even weakly recover in the second half of the year, and it is unanimously believed that economic recovery is also a signal that the bull market is about to end.
A controversial point is whether large-cap stocks or small-cap stocks will fall first after the economy recovers? GF Securities believes that in the growth of the main board and GEM since the beginning of this year, the contribution of valuation has been significantly greater than the profit contribution. Part of the increase in the main board has been contributed by valuation, and part of the increase in the GEM has been contributed by valuation. Therefore, although the increase in the GEM has been much greater than Mainboard, in fact, the mainboard bubble is bigger than the GEM.
GF Securities finally stated that once the future economic recovery leads to the convergence of policy relaxation expectations, the bubble in large-cap stocks may burst first.
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