As far as trading is concerned, it may not be the prime time now!
Just now, Hong Kong stocks fell sharply again. Overnight, the Nasdaq China Golden Dragon Index fell 3.95%, Vipshop fell over 17%, and iQiyi fell over 7%. After the US stock market closed, JD's biggest decline expanded to 10%.
Shortly after the morning opening, the FTSE China A50 Index futures fell by 1%, while the MSCI China A50 Interconnection Index futures fell by 0.8%.
So, what exactly happened? Analysts believe that the main reasons are as follows:
First, it is reported that Wal Mart is touting its stake in JD with a view to raising no more than 3.74 billion dollars. According to informed sources, this American retailer is selling 144.5 million shares at a price of $24.85-25.85 per share. In addition, Vipshop's third quarter performance outlook is not very good.
Secondly, the Asia Pacific market has once again turned downward. The Nikkei 225 index opened down more than 1%, with multiple stocks including Toyota, Hitachi, and Fast Retailing falling more than 1%. South Korean stock SK Hynix fell over 2%, while Samsung Electronics fell nearly 1%.
Thirdly, the expectations released by the Federal Reserve are not as clear as previously reflected by the market. Federal Reserve Governor Bauman stated on Tuesday that there is still a risk of inflation rising, so any change in the Fed's policy stance remains cautious, and overreacting to any single data may harm the progress already made. Moreover, during this rebound in the US stock market, Buffett is still selling his stocks.
Fourthly, the progress in terms of geography is not smooth. US officials say that the Gaza ceasefire agreement is facing bankruptcy.
Suddenly plummet
On August 20th local time, the three major indexes of the US stock market closed slightly lower, and the Nasdaq and S&P 500 index ended their eight consecutive trading days of gains. Popular Chinese concept stocks generally fell, with the Nasdaq China Golden Dragon Index falling 3.95%. Vipshop fell over 17%, iQiyi fell over 7%, Weibo fell over 6%, Xiaopeng Motors, Ideal Motors, NIO fell over 5%, Futu Holdings fell over 4%, and Manbang and Alibaba fell over 3%. The post market decline of JD's US stock market has widened to 10%.
It is reported that Wal Mart, the US retail giant, placed 144.5 million shares of the US stock depository securities after the Jingdong market, with the price per share ranging from US $24.85 to US $25.85, and the maximum cash out was US $3.74 billion (about HK $29.135 billion). Morgan Stanley acted as the broker after the market. JD.com fell 4.6% overnight, with the rights issue price discounted by 8.3% to 11.8% from the closing price. Wal Mart is the largest shareholder of JD. In 2016, Wal Mart sold groceries and e-commerce stores for high-end women to JD, thus obtaining 5% of the shares of JD. Wal Mart subsequently increased its shareholding, holding 10.8% shares of JD in total.
Vipshop's decline may be due to the company's performance outlook announced last night. Data shows that Vipshop's revenue in the second quarter was 26.9 billion yuan, compared to 27.9 billion yuan in the same period last year; Gross profit increased by 2.2% year-on-year, reaching 6.3 billion yuan; Non GAAP net profit of 2.2 billion yuan; GMV was 50.6 billion yuan, unchanged from the same period last year. For the third quarter of 2024, Vipshop expects its total net revenue to be between 20.5 billion and 21.6 billion yuan, a year-on-year decrease of approximately 10% to 5%.
Analysts believe that Chinese listed companies are entering a peak period of performance disclosure. Due to the average economic data in the second quarter, the market generally expects that the semi annual reports of listed companies may not be very good. Reflected in the secondary market, it will be relatively cautious. Today, the Hong Kong stock market opened with a sharp decline across the board. The Hang Seng Index opened 1.13% lower, the Hang Seng Technology Index fell 2.75%, JD.com fell over 11%, and Weibo fell 4%. Kwai and Xiaopeng dropped nearly 5% and 4% respectively after their performance.
How significant is the impact?
On August 5th, the Nasdaq China Golden Dragon Index hit a historic low. After that, there was a slight rebound, but the overall magnitude was not significant. Last night's sharp decline was somewhat influenced by the US stock market, but it may also have its own factors. So, how big are the unfavorable factors?
Firstly, the Federal Reserve's expectation of interest rate cuts is not clear, and this ambiguity is mainly reflected in the magnitude of the rate cuts. Former Chairman of the New York Fed, Dudley, stated that Powell may suggest that a tight monetary policy is no longer necessary, but will not imply the magnitude of the first rate cut in this round, especially considering the release of the non farm payroll report on September 6th. Federal Reserve Governor Bauman stated on August 20th that she still believes there is an upward risk of inflation, but if price growth continues to slow down, gradually lowering interest rates would be appropriate. On August 23rd local time, during the annual central bank meeting held in Jackson Hole, Wyoming, USA, Federal Reserve Chairman Powell will deliver an important speech that attracts global attention. Powell may take this opportunity to confirm whether the Federal Reserve will cut interest rates, but the focus of the market now is not on whether to cut interest rates, but on how much to cut. Because of this, the market began to turn cautious, and in early trading today, the Asia Pacific market also followed suit and fell again. The Nikkei 225 index opened down more than 1%, with multiple stocks including Toyota, Hitachi, and Fast Retailing falling more than 1%. South Korean stock SK Hynix fell over 2%, while Samsung Electronics fell nearly 1%;
Secondly, although the US stock market has been continuously rebounding recently, stock guru Buffett has continued to sell stocks through the rebound. According to data, Buffett's Berkshire Hathaway recently sold Bank of America again, selling 14 million shares for approximately $550 million, reducing its stake to 12%. According to the Form 4 filing submitted to the US Securities and Exchange Commission on Monday evening, Buffett sold these stocks last Thursday, Friday, and Monday at an average price of $39.50 per share. The company currently holds 928 million shares of Bank of America, worth nearly $37 billion. Berkshire Hathaway has been an active seller since late July, selling Bank of America stocks for 12 consecutive trading days as of August 1st. After a pause for a few days, it resumed selling last week and has sold a total of 100 million shares so far.
Finally, in terms of geopolitics, progress may be lower than expected. According to a report by Politico on Tuesday local time, informed government officials stated that the current ceasefire proposal in Gaza, jointly proposed by the United States, Israel, Egypt, and Qatar in July, is the strongest version to date because it includes provisions tailored to the demands of Hamas and Israel. Israel has signed the agreement, but Hamas has publicly stated that it will not accept it. Insiders say that this has made US officials increasingly concerned that the proposal will be aborted as before.