Stock Market

Although the U.S. stock market still seemed healthy one or two months ago, it deserves public concern over whether the U.S. bull market that has lasted for nearly 10 years has already come to an end.

Since January 2019, economic data for 2018 has continually been released. According to the released data, the downward pressure on the Chinese economy increased significantly in December 2018. The National Bureau of Statistics (NBS) and Caixin’s manufacturing Purchasing Managers Index (PMIs) slipped to below the 50-point line separating growth from contraction. The growth rates of import and export turned negative. The sales of passenger vehicles fell by nearly 20 percent in December 2018.

China's stock market is now quite different. The valuations of the blue chips across the board are on the rise, while the valuations of the underperforming small caps are going down. What has changed is not just the outlook of the stock market or the so-called structure of the market, but the concept of investment philosophy. The future market may not fall too much, but many individual stocks will continue to fall. And in the future, the market index may not surge to a record high, but some stocks will be skyrocketing.

 

The spring of 2015 was a season in which the Chinese investors' expectations of a bull market were so high that they simply forgot what fear was.  The summer of 2015, especially after mid-June, was a season that the Chinese investors feared so much that they forgot bull market has ever existed.