September is breathtaking! Is the risk of bubble squeeze released by US technology stocks finished?

category:Finance
 September is breathtaking! Is the risk of bubble squeeze released by US technology stocks finished?


Richard Bernstein advisors believes that if the price to earnings ratio (P / E) is taken as a reference, the main reasons why US stocks become expensive are two modes. The valuation of the technology sector represented by the six faamng giants (Facebook, Amazon, Netflix, Microsoft, apple and Googles parent company alphabet) has risen because their P (price) has risen faster than their e (earnings), while their P (price) has risen faster than their e (earnings) The rise of P / E ratio of other industry companies is because the decline of e is much greater than that of P. Although the effects of the two methods are the same, there are substantial differences.

In fact, the recent decline in US stocks is more about US economic concerns than on a single industry. In the face of the impact of the epidemic, investors have high expectations for the stimulus measures of the Federal Reserve and the United States Congress, but the reality has disappointed the market. The deadlock between the Democratic Party and the Republican Party on the relief bill is difficult to break, and the Federal Reserve seems not to further expand the scope of stimulus.

Chen Kaifeng, chief economist of Huisheng finance, said in an interview with first finance and economics reporter that before September, speculation in US stocks was very strong, and retail investors made a lot of bets on derivatives such as options, which laid hidden dangers for volatility. The recent adjustment belongs to the process of market rebalancing, and the risks accumulated in the early stage have been effectively released to a certain extent.

Chen Kaifeng is cautious and optimistic about the future market of the Na index. He believes that after the early collapse, the volatility of the short-term stock index belongs to the normal range. We can see that funds flow out of the hot speculation stocks such as Tesla, and the overall overbought of technical indicators has been significantly improved, which is very similar to the environment of the market finding a low point in late March.

In extreme cases, the bubble burst sometimes impacts the real economy, such as Japans real estate and stock bubbles in 1989, or the real estate and structural debt bubbles in the US in 2007.

If investors borrow heavily to buy an asset and the market falls rapidly, they need to make a choice in a short time. One is to be forced to close their positions, which may accelerate the price drop. When the overall position of the portfolio is too high, it becomes a few choices to realize the assets with high liquidity. However, panic and liquidity failure will cause the whole market to collapse, as happened in late March this year. So far, there is little sign that this will happen again. Li hengzhao told the first finance and economics reporter that at present, the capital in the US stock market is still sufficient and there is no sign of liquidity tension. Even if there are signs of danger in the market, the Fed still has plenty of tools in reserve.

On the other hand, the impact of falling stock prices on consumer spending is far less than the impact of the downturn in the real estate market. According to a report released in June by the Institute for policy studies, a think tank in Washington, since the end of the financial crisis, the wealth of the vast majority of middle-class Americans has not returned to the level of 2007, and the cost of living of Americans is mainly concentrated in five major items, including housing, transportation and food.

Relatively speaking, the impact of stock market fluctuations on daily life will be much smaller. After studying the Fed data, New York University economics professor Edward Wolff pointed out that for the average American family, the risk exposure to the stock market is relatively small, and market volatility cannot fundamentally change their financial situation. The first financial reporter noted that with a large number of retail investors entering, the heat of leveraged trading is gradually rising. According to the data of the financial industry regulatory authority, the scale of derivatives business is still lower than the peak in 2018, and the overall risk is controllable. Considering the current ultra-low yield of US Treasury bonds, loose monetary liquidity and the prospect of demand under the new economic norm, there is still a gap between the current valuation and the vicious bubble. However, the potential risk of antitrust investigation can not be ignored. Besides the US Congress, the European Union is also eager to try the technology giants. Thierry Breton, the EUs internal market commissioner, said last month that the EU was looking at expanding the power to regulate technology giants, including forcing them to sell their European businesses. According to reports, the 27 EU countries are considering introducing the digital services act by the end of the year. In extreme cases, the EU can also directly expel it from the EU single market. The proposal will greatly enrich the EUs tactics to deal with US technology giants, and may also impact the global influence of US technology enterprises. Source of this article: Yang Bin, editor in charge of the first finance and Economics_ NF4368

Relatively speaking, the impact of stock market fluctuations on daily life will be much smaller. After studying the Fed data, New York University economics professor Edward Wolff pointed out that for the average American family, the risk exposure to the stock market is relatively small, and market volatility cannot fundamentally change their financial situation. The first financial reporter noted that with a large number of retail investors entering, the heat of leveraged trading is gradually rising. According to the data of the financial industry regulatory authority, the scale of derivatives business is still lower than the peak in 2018, and the overall risk is controllable. Considering the current ultra-low yield of US Treasury bonds, loose monetary liquidity and the prospect of demand under the new economic norm, there is still a gap between the current valuation and the vicious bubble.

However, the potential risk of antitrust investigation can not be ignored. Besides the US Congress, the European Union is also eager to try the technology giants. Thierry Breton, the EUs internal market commissioner, said last month that the EU was looking at expanding the power to regulate technology giants, including forcing them to sell their European businesses. According to reports, the 27 EU countries are considering introducing the digital services act by the end of the year. In extreme cases, the EU can also directly expel it from the EU single market. The proposal will greatly enrich the EUs tactics to deal with US technology giants, and may also impact the global influence of US technology enterprises.