In the 5 trading days of this week, the A-share market fell three times and rose twice, although it is still a volatile downward trend, but the decline has slowed down significantly compared with last week! More importantly, on Friday, the market showed a large amount of yang, and the yang and yin not only recovered the lost ground on Thursday, but also broke through to the 5-day line pressure level. This is also the first time in the past month that the market has closed on the 5-day line, which is one of the important signals to stop falling in the short term!
So, how will the market go next week? From a technical point of view, the market will face a choice of direction next week: if on the basis of Friday, continue to step on the 5-day line and break through the 10-day line, then the market will completely get rid of the unilateral downward trend in the previous period and enter a range-bound trend. On the other hand, if the rebound of the 10-day line next week is resisted and falls below the 5-day line again, then a new low will be broken in the short term, and the bottom point will continue to move back!
In view of this, we must do a detailed combing of the market news over the weekend to see if there are any heavyweight positives or bearishnesses that will have a lasting impact on the market trend next week?
First, the China Securities Regulatory Commission: is stepping up research to further deepen the package of measures to deepen the reform of the capital market in an all-round way!
Over the weekend, the China Securities Regulatory Commission reported that the China Securities Regulatory Commission is stepping up its efforts to study and plan a package of measures to further deepen the reform of the capital market in an all-round way. Wu Qing, chairman of the China Securities Regulatory Commission, and other members of the team have successively conducted research and research in Shenzhen, Guangzhou, Shanghai, Beijing and other places to further deepen the reform of the capital market, and exchanged views and suggestions with listed companies, industry institutions, investors, experts and scholars, and representatives of system units.
Jing Yang noted that the package of measures to deepen the reform of the capital market mentioned by Wu Qing this time mainly involves the inclusiveness and precision of the system for new forms of business and new technologies, such as accelerating the implementation of the "Eight Articles of the Science and Technology Innovation Board". In addition, it also involves promoting the high-quality development of listed companies, accelerating the improvement of basic systems such as issuance and listing, information disclosure, mergers and acquisitions, etc. As well as focusing on promoting the realization of high costs of violations of laws and regulations, greatly strengthening the three-dimensional accountability of administrative, criminal and civil affairs, and maintaining a strong supervision posture.
It is not difficult to see that the content mentioned in this speech is not much different from that mentioned in the Lujiazui Forum, and there is nothing new!
At present, the A-share market is only interested in a few important reform measures: first, the accountability and compensation system for delisted listed companies, so far, there are still no relevant rules, only official verbal commitments. As long as there are no relevant rules in place, it will be difficult for ordinary retail investors to recover their investment losses once they are delisted. Second, close quantitative trading! High-frequency quantitative trading, which has always been regarded as the sharpest programmatic sickle, not only has no trading fairness at all for the entire market, but also seriously affects the trading activity of the entire market. If high-frequency quantitative trading is not canceled, it is very easy to have an electric fan market, or a one-day market, the hot spot cannot be sustained, the market has no money-making effect, and investment confidence is naturally fragile. Third, close the refinancing. Refinancing provides an excellent window for listed companies to reduce their holdings in disguise and institutions to short-sell, although the threshold has been greatly raised, there is still a gap. If the door of the system is not closed, it will have a continuous impact on investor confidence!
It's a pity that the regulator has not given any solution to the problems that these shareholders are deeply concerned about, which is one of the fundamental reasons for the continuous weakening of A-shares recently!
Second, the central bank and other seven departments jointly issued! Guide financial capital to invest early, small, long-term, and hard technology!
Over the weekend, seven departments, including the Central Bank, the Ministry of Science and Technology, the National Development and Reform Commission, and the Ministry of Industry and Information Technology, jointly issued the "Work Plan on Doing a Solid Job in Science and Technology Finance". The "work plan" pointed out that in the next step, the central bank will establish a work linkage mechanism with relevant departments, strengthen information sharing and policy coordination, carry out in-depth special actions to improve the capacity of science and technology financial services, build a platform for experience exchange and discussion, promote the implementation of various measures in the "work plan", and make every effort to do a good job in science and technology finance, guide financial capital to invest early, small, long-term, and hard technology, and help achieve high-level scientific and technological self-reliance and self-improvement with high-quality scientific and technological financial services.
The news is positive for tech stocks. The central bank and other seven departments jointly issued a document, the main purpose of which is to broaden financing channels for science and technology enterprises. After the A-share market tightens its IPO, it is one of the important means to fill the A-share funding gap by relaxing bond issuance financing and strengthening policy support for cross-border financing of technology-based enterprises.
In addition, the central bank also deliberately emphasized that financial capital should be invested early and small, which puts forward a higher test of the investment ability of financial capital, and it is necessary to have enough understanding of the future prospects of the technology industry to be able to find high-quality start-up enterprises in the infancy.
As hard technology has become the main line running through the market in the A-share market in recent years, although the leading sectors are different every year, they are all within the scope of hard technology. For example, last year's artificial intelligence, as well as all the branches involved in the new quality productivity that the senior management focused on improving at the beginning of this year, belong to hard technology. The sector as a whole has encountered favorable policies, which is also a positive support for the A-share market!
Third, the central bank held a blockbuster meeting to resolutely prevent the risk of exchange rate overshoot!
Recently, the regular meeting of the Monetary Policy Committee of the People's Bank of China in the second quarter of 2024 (the 105th in total) was held in Beijing. Compared with the first quarter, the regular meeting continued to propose to "pay more attention to counter-cyclical adjustment" and "increase the implementation of the monetary policy that has been introduced", but pay more attention to the continuous effectiveness of the stock policy.
As for the RMB exchange rate, this regular meeting did not propose to guide enterprises and financial institutions to adhere to the concept of "risk neutrality", but "resolutely guard against the risk of exchange rate overshoot". For the real estate market, this regular meeting emphasized the need to "fully understand the new changes in the supply and demand relationship of the real estate market".
This is the most important piece of news this weekend!
Since the beginning of this year, the Federal Reserve has been repeatedly jumping sideways on whether to cut interest rates, and its purpose is very clear, that is, it hopes to influence the direction of the global capital market by manipulating market expectations. The U.S. dollar index has remained elevated due to the Federal Reserve's delay in cutting interest rates, and it has been strong against other currencies. In Asia, the yen and the renminbi exchange rate have weakened under pressure recently, and the yen has depreciated even more than the renminbi!
In terms of the renminbi, there was a round of accelerated depreciation in November last year, but after the offshore exchange rate reached 7.3, the central bank began to protect the disk. As a result, the RMB exchange rate finally stabilized between 7.3 and 7.4 last year, and did not continue to depreciate sharply. This year, the RMB exchange rate has once again entered a depreciation channel, and in recent days it has also re-entered the 7.3 channel. In this case, if the central bank does not intervene, the offshore renminbi may usher in an accelerated depreciation.
Fortunately, at the end of this week, the central bank finally issued a document to resolutely guard against the risk of exchange rate overshoot. From the point of view, last year, the central bank almost also took action when the offshore RMB fell to around 7.3, which shows that 7.3 is the bottom line of the high-level RMB exchange rate fluctuations!
Although the central bank issued a document, it may not make the RMB exchange rate turn around quickly! But in Jingyang's view, once the central bank makes a move, it will not give up or stop protecting the disk, as long as the RMB exchange rate continues to depreciate in the short term, the central bank's strength to protect the disk will be greater and greater! In the end, the RMB exchange rate may be the same as at the end of last year, stable at 7.4 and not continue to weaken.
It can be seen that the short-term decline of the RMB exchange rate will slow down, and it is not far from the stage low. As long as the RMB exchange rate can no longer continue to weaken, then on the A-share side, the willingness of northbound funds to continuously reduce their positions will be reduced. Considering that northbound funds mainly buy weighted stocks, the short-term impact of northbound funds on the market is more obvious. Therefore, the central bank's speech on the fluctuation of the RMB exchange rate is one of the important benefits for the entire market!
Judging from the weekend news, there is no heavyweight bearish, and there are many positives, which will support the market trend next week. According to the analysis on Friday afternoon, the national team entered the field on Friday morning to pull up the index, indicating that the national team will change its operation strategy after it has fully absorbed funds. Therefore, Jingyang believes that next week, the A-share market will make a choice between the 5-day line and the 10-day line, and will eventually break through the 10-day line to stop falling and stabilize. However, looking at it now, there are many good news on the weekend, so the probability of the market changing upward next week will be greater!