The Fundamentals Of Economic Development Are Improving And Stock Market Opportunities Are Coming.
In April 3rd and 2017, the biggest stock market in the world is the stock market of developing countries, and the overall growth of emerging market stock is the best performance since 2012.
In the developing countries, China's stock market, which has the largest economic volume, has achieved a good start in the first three months of this year, reaching its best performance since 2006.
Analysts pointed out that President Trump's relaxation of trade protection policy, the improvement of China's economic prospects and the improvement of corporate sentiment are the main catalysts to promote the sharp rise in the first quarter of the Chinese stock market.
The main driving force for the rise of China's stock market in the first quarter of this year is that the fundamentals of economic development are improving.
As of March 30, 2017, China's largest stock market index fund iShares, China's largest stock market (US stock code: FXI), has risen by 11.8% since 2017, and has won a significant share of the 5.7% increase in the ETF fund's performance in the same period following the S & P 500 index (US Stock Code: SPY).
Since Trump won the US presidential election, investors have found that China's stock market is going to be in a very awkward position.
Since Trump took part in the US presidential election, he has been emphasizing the introduction of strict trade protection policies after coming to power. Therefore, the stock market investors generally expect President Trump to tighten control over the behavior of American enterprises in manufacturing activities or service outsourcing, while China, as an economy highly dependent on outsourcing industry, will have a huge impact on China's stock market.
However, judging from the recent public statements made by the Trump administration on some key trade protection issues, the Trump administration's attitude towards trade protection policy has slowed down.
Therefore, the stock market investors expect that the Trump administration's future trade policy will not strike a big blow to the outsourcing industry, which is undoubtedly a good news for the overall development prospects of China's economy.
However, since the beginning of this year, signs of economic recovery in the major economies of the world are generally showing signs of recovery. This is also good for China's economy to maintain growth momentum and attract more investors.
capital
Investing in China's stock market.
At the same time, despite the impact of internal and external factors, rising consumer spending helped China's economy survive the 2016.
In the fourth quarter of last year, China's GDP total economy grew by 6.8% over the previous year, higher than the expected market growth rate of 6.7%, which also set the highest economic growth rate since the fourth quarter of 2015.
In various economic indicators, the manufacturing industry which has attracted much attention from the market has also seen an accelerated rebound in recent years.
In the past few months, China's manufacturing indicators have begun to expand, showing that the Chinese economy has started a bounce.
In March, China's official purchasing managers index PMI rose to 51.8 from 51.6 in February this year, proving that China's economic development is very stable.
In addition, in March 2017, the Central Bank of China began to slowly raise funds.
Borrowing cost
This also proves that China's economy is in a steady growth range from one aspect.
In a stable economic environment, the inflation rate will rise in a healthy way, driving down the cost of real capital borrowing.
In order to control the pace of the rapid rise of the real estate market prices, the Central Bank of China has begun to tighten monetary policy, which is a good news for China's financial industry.
In 2017, according to a survey conducted by the Central Bank of China, the confidence of China's major banks and enterprises in economic development is more optimistic than that in 2014.
In the first three months of this year, a tracking banking industry's overall confidence index for economic development rose sharply to 64.9, the highest level in the past three years.
Meanwhile, the overall confidence index of Chinese enterprises in economic development jumped to 61.5, the highest level in the past two and a half years.
These indicators show that the market's confidence in China's economic development prospects is rising.
Since 2017, many industries that have tracked China's stock market have been
Index Fund
The cumulative yield has substantially outperformed the US stock market and other emerging market equities.
By contrast, as of March 30th this year, the index fund that tracks all emerging market stocks (US stock code: EEM) has increased by only 13.3% this year, while the S & P 500 Index Fund (US stock code: SPY) rose by only 5.7%.
At present, the rising trend of China's stock market is more obvious, and substantially outperforms the average performance of emerging market stock market.
However, although the Chinese stock market has made a very bright return in the first quarter of this year, some stock market analysts expect that the performance of China's stock market index fund may be relatively dull in the second quarter.
As China's central bank tightens monetary policy and liquidity and the Fed raises interest rates, China's second quarter upward trend is likely to slow down.
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