Summary of Key Points
This is a three-star market observation for ordinary investors, which clearly outlines the core contradictions in the current global capital market: the rise in oil prices above $100 per barrel has driven inflation. All the measures taken by the United States to cool down the market and raise interest rates are merely superficial attempts to address the issue, as no real determination has been made to resolve the underlying problems. This has essentially set November as a critical watershed for global tech stocks. The advice for ordinary investors is practical: avoid chasing speculative tech trends and focus on defensive sectors with low volatility and stable dividends; also, don't have illusions about the old development logic of the real estate industry.
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Point-by-Point Explanation in Plain Language
1. The US's current interest rate hikes are merely superficial efforts; any choice made is a dead end
Many people thought that the US Treasury buying long-term bonds would lower interest rates. However, with the doubled pace of bond repurchases, the yields on 10-year and 30-year US Treasuries have actually increased. This is like the US government saying, "I want to cut interest rates and inject liquidity," but the market doesn't buy into it. The reason is that the US is caught between two impossible goals: on one hand, high interest rates are almost overwhelming the government itself, with annual interest payments on debt exceeding military spending, leaving the government with no funds to operate. On the other hand, leading US AI companies are borrowing heavily to compete for technology, driving up borrowing costs. The US government doesn't dare to regulate these AI companies because the Treasury Secretary has admitted that the US is losing the AI race to China and fears losing any competitive advantages. So, the only option left is to cut government spending. But this would provoke rebellion among the public and the military-industrial complex, so that's not an option either. Therefore, all current actions are defensive. For example, the US's support for the Japanese yen is not out of kindness but out of fear that Japan might sell its US Treasuries, causing a collapse in the market and harming the US economy. None of these measures can fundamentally solve the problem of high interest rates, which is like an itchy skin condition that can't be cured and continues to cause discomfort, affecting the global stock market.
2. Oil prices above $100 per barrel are the "invisible killer" of recent market trends
The recent rise in Brent crude oil to $100 per barrel is relevant to stock prices. The latest CPI data has already been affected by rising oil prices, and the August CPI figures are expected to show higher inflation. Inflation is a key factor for the Federal Reserve in deciding whether to raise interest rates. If inflation doesn't decline, the Fed might even raise rates instead of cutting them, making money more scarce in the global market. When money is tight, people tend to sell high-risk stocks, especially tech stocks with high valuations. This is why the AI and chip sectors in the A-share market have been volatile, with little sustained growth.
3. Tech stocks have only two months to "survive"; major volatility is likely after November
Everyone is watching November because the US will hold mid-term elections. Before the elections, the government can't take any drastic actions, as it could offend either ordinary voters or tech giants and lose votes. Thus, the strategy is to delay decisions. This gives global tech companies, especially AI firms, a two-month "golden buffer period." If they can produce breakthrough products or show substantial revenue growth during this time, they can maintain their high stock prices despite future policy pressures. However, the global AI industry hasn't delivered such products; most improvements are minor and not enough to support current high valuations. After the elections, the government, no longer constrained by election concerns, will likely address the financing bubble, leading to significant volatility in tech stocks. The same applies to the A-share market, where only niche sectors like chips and electronics, which benefit from anti-dumping policies, have sustained performance.
4. Investing now should be cautious; stability is the best approach
The A-share market's trading volume is only 1.8 trillion yuan, and leveraged funds are waiting on the sidelines. There's no basis for a full-blown bull market, so buying random tech stocks is risky. The best choices for investors are sectors with stable prices and solid returns: large agriculture, with strong demand and rising prices; high-dividend financial sectors; and power grid equipment, which is in demand both domestically for new infrastructure and internationally for power shortages. The recently mentioned urban renewal initiative is not about large-scale construction but about refined, existing asset renovation. The era of high-growth stories in the real estate industry is over, so investors should avoid the old strategies of investing in real estate stocks.
Risk Warning
All of the above is market analysis and does not constitute investment advice. The stock market is risky, and investors should proceed with caution.