For the recent sharp fluctuations in US stocks, first of all, we need to understand that the current financial level in the United States deviates from the epidemic fundamentals more and more, the future adjustment of the financial level is inevitable, and the range will be relatively large, the recent V-shaped trend of US stocks is just a precursor.
At present, the United States needs to get rid of the severe financial shock brought by the liquidity crunch in the early stage, so a series of policies such as zero interest rate and unlimited QE are adopted to carry out financial rescue. At present, although the stage goal has been achieved, there is no doubt that the uncertainty of its financial market deviates from the whole society.
The Federal Reserve previously announced to maintain long-term zero interest rate, which is a signal of long-term easing of US financial policy, which is beneficial to the expectation of stabilizing short-term financial markets. However, the medium-term low interest rate is likely to lead to the emergence of financial bubbles and financial arbitrage, which is likely to cause some sustained pressure on US finance in the future. As the interest rate gap between the United States and emerging markets continues to exist, it may also lead to the gradual transfer of global capital from the United States to emerging economies, especially to China, which may bring financial prosperity to some emerging economies with good epidemic prevention and recovery. But at the same time, we also need to monitor the risk of short-term capital and liquidity brought by the whole inflow of foreign capital.
It should be noted that the QE policy of the Federal Reserve is not without a bottom line. It aims to guide expectations, so it puts forward an unlimited slogan, but in fact it has a bottom line. At present, the financial policy orientation of the United States is to ensure survival, so we will ignore the cost, which means that in the next step, when the social panic and internal contradictions in the United States are alleviated, monetary policy will appear a series of moderate adjustments.
For example, after 2008, the gradual withdrawal of QE policy in the United States, and the reduction of the Federal Reserves table, from this process, we can see some adjustments in the U.S. economy and the response of the U.S. financial market. In my opinion, after the epidemic subsided in the United States, it is inevitable for the United States to reduce its balance sheet and normalize its financial policies. However, the adjustment process may be more drastic.
The second quarter is likely to be the point where the world economy falls back in depth
However, there are still some uncertainties, mainly due to whether the epidemic will further aggravate and whether there will be a second wave of epidemic. Many experts believe that the second wave of the epidemic is likely to be more infectious, spread and mortality. It turns out that many people think the economic trend will be L-shaped, but the asymmetric W-shaped and even V-shaped may also be possible.
The progress of the epidemic determines the recovery of the world economy. If the epidemic is not over, and vaccines and specific drugs are not developed, it is impossible for the global economy to get rid of the current situation of deep decline and partial suspension.
There is almost no chance of another large-scale outbreak in China
To be clear, as long as Chinas internal basic market can be stable, the external impact is not as big as expected, and the actual situation will be better than the early pessimistic forecast. If China can get through the difficult period in the third quarter, the next external shock may be relatively weakened. But on the other hand, there is a certain time lag between the economic downturn in Europe and the United States and the demand for foreign trade, which we should not take lightly.
In the aspect of epidemic prevention and control, China has achieved good results through comprehensive shutdown, production suspension, school suspension and market suspension in the early stage. At the same time, the administrative resumption of work, resumption of production, resumption of school and resumption of market has also achieved good results. Therefore, in terms of current management and control, there is basically no probability of another large-scale outbreak. China will continue to restore its economy and life according to its own pace, maintain the normalization of epidemic prevention and control, further increase the promotion of effective demand, and further strengthen the benign internal economic cycle. Such a strategy is established.
Order support is more important than financial support for small and medium-sized enterprises
Some lessons can be learned from the recent spread of bankruptcy in the U.S. catering and retail industry, especially from some companies that had borrowed a lot before the outbreak. First of all, economic assistance must be based on epidemic prevention and control. If there is no effective prevention and control of the epidemic, economic support is also powerless.
Therefore, for the rescue of some small and medium-sized enterprises, it is very important to give not only the support of funds, but also the support of orders, so that it can recover the function of blood production on the basis of market sales. This is the most important. Therefore, the next policy focus should be adjusted.
This article is the exclusive contribution of Netease Research Bureau and does not constitute an investment decision.
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