Since the beginning of the year, the cumulative decline of the major US stock indexes has reached between 15% and 20%, which is basically in line with the characteristics of a bear market. Judging from the characteristics of the two bear markets of US stocks in 1930 and 2000, the market has first adjusted the valuation and then adjusted the EPS. Growth stocks fall first, followed by value stocks. Considering the many potential risks in the short term, the view that some so-called markets have bottomed out is still very debatable. At present, the market's expectation of the Fed's interest rate hike has been relatively fully taken into account. We believe that the core variable affecting the follow-up stock price trend is no longer the interest rate, but the judgment on the economic outlook and corporate profit expectations. Regarding the short-term macro trend, the market is extremely worried and full of divergences, and we are unable to judge. At the same time, the market's 2022 earnings expectations for the core index of the US stock technology sector and representative stocks have not been significantly revised down, which shows that the market is still more at the wait-and-see level in the short term. Of course, this also means that if the follow-up macro economy exceeds expectations Downward, the downward revision of sector & individual stock earnings expectations will be a risk that needs to be vigilant.
In the short term, it is expected to continue to fluctuate, and EPS will become the focus of follow-up. What are your different views?
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