Renminbi assets have launched a major counteroffensive!
Firstly, the renminbi exchange rate has risen by more than 2000 points in just two trading days, marking an unprecedented surge, and the increase in November is the first monthly rise since its depreciation this year.
A-shares, Hong Kong stocks, and Chinese concept stocks have all seen significant increases.
In the last few trading sessions, northbound capital has been continuously flowing in, with another inflow of 11.45 billion yesterday.
Correspondingly, the US dollar has started to decline, the US stock market is struggling to rise, and the US real estate market is further in a slump.
01, Chinese concept stocks have outperformed by 37 points
In the first two trading days, while the NASDAQ index fell, the China Golden Dragon Index rose.
In the past three consecutive trading days, the NASDAQ China Golden Dragon Index has far exceeded the broader market. It was not until early this morning, when the NASDAQ index slightly rose by 0.13%, and the China Golden Dragon Index began to adjust, that this trend was halted.
However, looking at the entire month of November, the cumulative increase of this index of Chinese concept stocks has exceeded 42%.
Currently, the Dow Jones Industrial Average has also seen a certain increase, with the closing point rebounding by 20% from the lowest point in October, entering the technically defined bull market.Compared to this, the China concept stock index is even more impressive, with a gain of over 42% in November alone. This indicates that overseas capital is actively buying Chinese concept stocks in the US stock market, fulfilling the desire to bottom-fish.
Looking at it on a monthly basis, the Nasdaq index only rose by 4.37% in November; after the Dow Jones Industrial Average increased by 13.95% in October, it only rose by 5.67% in November; the S&P 500 index has now returned above 4,000 points, but its increase of 5.38% in November is also lower than the 7.9% increase in October.
Compared with the Nasdaq, Chinese concept stocks achieved an excess return of 37 percentage points in November alone.
02, China's economic prospects are better
The significant increase in Chinese concept stocks is related to several aspects.
Firstly, a large number of technology companies have shown strong performance in their third-quarter results, which is quite different from the performance of technology stocks in the US stock market.
Even though technology stocks in the US stock market saw a slight increase in revenue in the third quarter, the growth rate of profits has once again experienced a significant decline. Many technology stocks have had to freeze recruitment plans and even lay off a large number of employees to cope with the Federal Reserve's interest rate hikes and the subsequent recession.
Therefore, when comparing from the perspective of technology stocks, the performance prospects of Chinese technology companies are far superior to those of US stocks.
Secondly, domestic financial support for the real estate industry is gradually being implemented, and epidemic prevention policies are also being continuously optimized and adjusted. All of this means that the domestic economy will continue to improve and get better over the next period.
The US third-quarter GDP growth rate, after revision, is 2.9%, while China's third-quarter growth rate is as high as 3.9%. This also shows from one side that China's economy is much better than that of the United States.03, Continuous Inflow of Funds
Yesterday, the central parity rate of the Chinese yuan increased by 683 points; in terms of offshore exchange rates, the appreciation of the yuan against the US dollar was even more exaggerated, with a rise of over 2000 points in just two days.
During the three trading days starting on November 10th, the yuan had previously appreciated by 2300 points consecutively, and the recent two trading days saw an increase of 2000 points, returning once again to the 7.02 level.
The funds buying yuan in the foreign exchange market are increasing, and foreign capital in the stock market appears to be even more enthusiastic.
Throughout November, the inflow of Northbound funds exceeded 60 billion yuan, continuously filling the gap dug in October; Hong Kong media reported that foreign capital's purchase of mainland corporate stocks in November was at least 100 billion Hong Kong dollars; considering the more than 40% increase in US-listed Chinese concept stocks in November, there was also a significant influx of funds, with some investment banks estimating the purchase amount to be around 30 billion US dollars.
Combining the above, in November, the funds flowing into China's core assets through US stocks, Hong Kong stocks, and A-shares should exceed 300 billion yuan.
04, Buying Gold
While foreign capital continues to buy Chinese assets, the People's Bank of China may have quietly bought 300 tons of gold.
In the third quarter, global central banks purchased nearly 400 tons of gold in total, but there was no specific buyer for 300 tons of it.
Japanese media, after multifaceted analysis and combining past historical cases, pointed out that this 300 tons of gold is very likely to have been exported from Russia to China.With more gold reserves as support, the status of the renminbi will be further enhanced.