Stock Market Outlook: How Did It Suddenly Become "Double Bond"?

"Stock debt double kill" refers to the stock market and stock market which also plunged sharply at the same time. Because stocks and bonds are very different in risk, the investors of both are basically two kinds of people. Of course, based on the needs of asset allocation, some people will hold stocks and bonds at the same time. The risk preferences of these two groups are very different. Therefore, under normal circumstances, they will not make a choice in the two markets. On the contrary, investors often encounter such a situation: as the stock market goes up, investors who are busy with asset allocation will increase the proportion of buying stocks at this time, when bond prices may fall: when the stock market falls, some investors will choose to withdraw from the stock market and return to the bond market, so bond prices will naturally rise.

Looking back, it should be said that the market supply and demand is generally balanced. Capital side This is not a very tight matter. The problem is part of the bond defaults and some investors' highly leveraged operations, which, of course, has a negative impact on the stock market, but it will not lead to "double bonds". Therefore, the market's reaction to the risk of the bond market is a bit excessive. In fact, as far as the whole is concerned, the market risks exposed are still in a controllable state. Therefore, the market of "double bonds" cannot be sustained. In fact, the bond market has begun to moderate this week.

Besides, the operation of the stock market will, of course, be affected by changes in interest rates and money. However, considering the fact that China is not going to raise interest rates and the capital market is not too tight in general, the bond market's drag on the stock market is relatively limited. Judging from a variety of signs, the Shanghai and Shenzhen stock markets have stabilized conditions near the 3100 point, and will never repeat the market in June 2013. Therefore, this "double bond" is to some extent a manslaughter, and the market will soon be amended.

In the memory of Chinese people, China's capital market had a double bond in June 2013. At that time, the central bank did not routinely put money into the open market in late June when the habit was relatively tight, but on the contrary, it continued to buy back. As a result, the market suddenly tightened up, triggering a sharp rise in interest rates on various maturities, and the bond market fell sharply. The investors in the stock market think that this is a "money shortage" and sell stocks quickly. In that month, the Shanghai Composite Index fell by 13.97%, and the broader market was down 1849 points. By the end of the month, as the central bank resumed its counter repurchase in the open market, the capital market began to improve, and both the stock market and the bond market rebounded.

So why did it suddenly become a "double bond"? The reason why the author suddenly said this is because the monetary policy is relatively loose this year. The interest rate of the 10 year treasury bond as a symbol of market risk free yield was less than 2.7% in August, so no one believed that the funds would be scarce at the end of the year. However, the shortage of liquidity suddenly came. This is because with the increase in interest rates of the Federal Reserve, there has been a general rise in the price of capital in the international market, and the formation of funds returning from the emerging market to the United States. At the same time, in order to regulate and control real estate and production capacity, China also put forward the requirement of deleveraging, which formed the expectation that people may continue to tighten the pattern of capital supply, so the bond market immediately appeared the trend of upward and downward prices.

By October, the 10 year period. National debt Interest rates have risen to more than 2.7%, and there are signs that they are closer to 3%. In fact, even if the market is stable, even if it comes back to 3%, it is still a relatively low interest rate in history. But in the middle of 12 months, the market liquidity problem continued to ferment. Although the central bank constantly regulates market liquidity in the open market through 7 days, 14 days and 28 days and other counter repurchase operations, it even passed the MLF operation to the market last Friday. Put in funds But at the end of the year, the pressure of assessment, the preparation of cross year funds, and the overlay of the forthcoming refluence quota and the lunar new year have not been effectively alleviated. The market is still cautious about short-term liquidity, which shows that the yield of short-term interest rate debt does not rise and rise. On the 20 day, the yield of 1 - year treasury bonds reached 3.0491%, and the rate of increase was far beyond that of 10 - year treasury bonds.

A more serious problem is that in recent years, as the bond market continues to walk, there is a phenomenon of "acting on behalf" and "raising coupons" in some places, that is, there is an irregular and highly leveraged operation. This business, which is spontaneously formed by the market and is now in the gray area, is naturally safe when bond prices continue to rise. Once the bond price falls, it exposes risk exposure, such as this time. Because of the opaque information and the hype of public sentiment, the risk has been magnified rapidly, resulting in a never ending market of treasury bonds futures. This unusual trend has been spanmitted to the stock market, which has become a sign of a new round of shortage of funds. At the same time, the regulatory authorities just request to strengthen the supervision of insurance capital raising, and the superposition of the two factors also leads to a "double bond" situation in the market.

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