Wen Guoqing: The Worst Time Has Passed. We Can Boldly Build Positions This Week.

Over the past few weeks, the global financial market has been in the most severe decline. The four events have become the source of shocks. First of all, the wording of the Fed's interest conference gradually became radical. It shows that the process of raising interest rates is approaching after the end of the third round of quantitative easing. The market is fed up with the Fed raising interest rates, no matter whether it starts or not. The withdrawal of stock market, such as the low tide of seawater, is not matter. Second, European economic data fell sharply, and the euro zone industrial production index plunged 1.9% in August, ending the 20 month recovery process and showing signs of two recession in the European economy.

Third, in order to retaliate against Russia's hatred of Ukraine, the United States and Saudi Arabia formed a tacit understanding to increase oil and natural gas production, while using financial means to suppress crude oil prices. Crude oil futures leaked all the way from the end of 7 at the end of 7 months, and nearly three on Monday, the road fell. This Thursday broke $80, making Russia's economy heavily dependent on oil exports, and the stock market plummeted 27% in three months.

Fourth, China's real estate market continued to decline, resulting in weaker demand for commodities, GDP growth continued downward, the metal market continued to decline.

The superposition of the four factors led to a four week drop in the US stock market, a miserable green market in Europe and the United States, a mass market in the commodity market, and a sharp pullback in the Asian and Hongkong markets.

In the atmosphere of global capital market slaughter, the most powerful A share market in the world since the third quarter, this week, there was a serious disagreement between institutional funds and fierce fighting. The total volume of 18905 billion yuan was released throughout the week and fell by 1.4% at the end of the week. In the past two weeks, we have been emphasizing that we are optimistic about the A share market trend. However, in the face of severe external situation and the upcoming three quarter economic data, the market will be severely shocked under 2380. This week's market confirms this speculation. Although the A share market is very strong this week, the Shanghai Composite Index has broken through 2380 resistance points twice, but it has finally failed, indicating that the market pressure is huge.

I think the shock of the global market this week is a concentrated reflection of the three factors of geopolitics, European recession and China's economic data. Overreaction Next week, the market will enter a comprehensive recovery cycle. The reasons for this judgement are as follows:

First, after a sharp fall in the first half of the year and a policy adjustment in the second half of the year, China's real estate market has initially stabilized and turnover has steadily recovered. Since the second half of the year, the government has lifted the real estate purchase restriction policy. In addition to the northern Guangzhou and Shenzhen, other cities have lifted the real estate restriction policy, while encouraging financial institutions to increase the purchase loans. The change of policy did not lead to a fall in index prices, but the demand for home-based demand was clearly released. The fall in house prices brought about a marked rise in volume.

From leading Market direction In the top 30 cities, the cumulative sales area of real estate has decreased from 16% in April to 16% in the same period. The decline in October has slowed to 8%. A basic judgment is that house prices will continue to fall, but the area of real estate sales has stabilized and the macro economy will enter a rebound cycle after October.

Second, the market contradict the understanding of the Fed's withdrawal from QE and US economic data. The premise of the Fed's interest rate increase is that the US economy is picking up strongly and the inflation risk is increasing. However, the latest data show that the US economic data has weakened, and the urgency of the Fed's interest rate hike is greatly reduced. That is to say, the economic downturn and interest rate increase are contradictory. The two can only choose one, but the recent decline in the US stock market also covers two expectations. We believe that the market has been seriously oversold.

Third, International crude oil market The fall is the performance of the US game in the financial market and Russia, which does not indicate that the world economy has fallen so much, nor does it show the severe shrinkage of oil demand. The market is too emotional under the powerful manipulation of the institutions. Objectively speaking, the US Russia game and the fall in oil prices have greatly improved the tense situation of China's crude oil supply, which is a great benefit to China. Our country has not only had the opportunity to calmly build strategic reserves, but also has a very high cost, and is also in the right and left position in international politics. It should be said that it is one of the best times in the past ten years.

Taking into account the above factors and the reform of mixed ownership that China is pushing forward, China's economy will soon enter the best period in history with China's series of strategic cooperation with Western Europe and Russia, and so is the stock market.