US Stocks: 2 Down, 1 Up; Asia Markets Fall First!

After a two-day monetary policy meeting, the Federal Reserve announced on Wednesday that it would keep interest rates unchanged, end its asset purchase program in early March, and hinted at the possibility of raising interest rates as early as March.

At the subsequent press conference, Federal Reserve Chairman Powell stated that, given the surge in inflation and a strong labor market, the Fed would continue to adjust its policies.

Powell also said that the possibility of raising interest rates at every FOMC meeting could not be ruled out.

After the Fed's FOMC statement, Fed funds futures still implied four interest rate hikes in 2022.

Recently, the U.S. stock market has been in turmoil due to disappointing corporate earnings so far this quarter, the rapid escalation of tensions between Russia and Ukraine, concerns over the rapid spread of the COVID-19 pandemic, and most importantly, worries about the Fed tightening monetary policy rapidly and significantly.

The U.S. stock market has absorbed some of the bearish news in advance due to expectations, and the market closed with two declines and one increase on Thursday morning, which was relatively stable.

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As of the close, the Dow Jones fell 129.64 points, or 0.38%, to 34,168.09 points; the Nasdaq rose 2.82 points, or 0.02%, to 13,542.12 points; the S&P 500 index fell 6.52 points, or 0.15%, to 4,349.93 points.

The International Monetary Fund (IMF) warned on Thursday that global financial markets could face further turmoil in the future, especially as central banks around the world tighten their policies.

The IMF is very concerned about emerging markets and has emphasized the "spillover" risks that the normalization of monetary policy in developed economies brings to emerging markets.

Previously, the IMF warned that the tightening of U.S. monetary policy would hinder the economic recovery of emerging economies.

Asian stock markets were the first to fall!

The MSCI Asia Pacific Index fell as much as 2% to its lowest level since November 2020, as hawkish remarks from Fed Chairman Jerome Powell triggered selling in regional stock markets.

The index suffered its biggest drop since May 11, with the South Korean and Japanese benchmark indexes leading the decline.

The South Korean Kospi index fell 3%, the Japanese Nikkei 225 index fell 2.6%, and the Hong Kong Hang Seng index fell 2.3%.

On Thursday, more than 100 stocks in China's A-share market were suspended from trading, with more than 4,400 individual stocks falling, and less than 300 stocks rising.

As of the close on January 27, since the beginning of the year, 4,194 companies in the A-share market have fallen, 590 have fallen more than 20%, 64 have fallen more than 30%, and 7 have fallen more than 40%.

What can support the backbone of A-shares?

The global stock market is facing an environment where the risk of uncertainty is increasing.

The main risk factors: the corporate earnings reports from Wall Street so far this quarter have been disappointing, without this fundamental support, how can the stock market be good?

The rapid escalation of tensions between Russia and Ukraine, geopolitical risks affecting the stock market; the rapid spread of the COVID-19 pandemic causing concerns, the Omicron variant causing supply chain disruptions, directly threatening economic recovery; and the most important factor: worries about the Fed tightening monetary policy rapidly and significantly, the Fed's monetary policy meeting minutes were just released, much more hawkish than expected.

The input risk brought by the downturn in the external market, no stock market can stand alone.

A-shares are currently the market with the smallest fluctuations in the global index, and the macro-control policy is the most protective for A-shares globally.

It's not surprising to adjust for a while, the long-term outlook can be expected, there is no need to make a fuss.

While recognizing that 2022 is the most difficult year for the global economy and other comprehensive aspects, it is essential to see that China's economic fundamentals are healthy, and China's consumer market support is the strongest globally.

With macroeconomic fundamentals to support, the stock market can't go too bad.

We are very confident about this.

As long as this year can be passed smoothly, after the first quarter of 2023, the golden age of the future 20 years may be opened, thinking about it is so exciting that it's hard to sleep at night!

As of the close on Thursday (January 27), the Shanghai Composite Index fell 1.78%, to 3,394.25 points, the Shenzhen Component Index fell 2.77%, to 13,398.84 points, and the ChiNext Index fell 3.25%, to 2,906.76 points.

The total turnover of the Shanghai and Shenzhen markets was 82.297 billion yuan; the actual net outflow of funds from the north was 14.624 billion yuan.

There were 18 stocks that hit the daily limit on the two markets, and 116 stocks were suspended from trading (including ST stocks).