Source:Brokerage China. The original title is "Just now, a sudden sell-off! What happened? "
Today, Hong Kong stocks plunged again. Overnight, the Nasdaq Golden Dragon Index fell by 3.95%, with Vipshop falling over 17% and iQIYI falling over 7%. In post-market trading, JD.com's largest decline expanded to 10%. $NASDAQ Golden Dragon China (.HXC.US)$ fell by 3.95%, with Vipshop falling over 17% and iQIYI falling over 7%. In post-market trading, JD.com's largest decline expanded to 10%.
Shortly after the opening bell this morning,$FTSE China A50 Index (.FTXIN9.CN)$Secondly, the Asia-Pacific market turned down again.
So what happened? Analysts believe that there are mainly the following reasons:
First, there is news that Walmart is selling its stake in JD.com to raise no more than USD 3.74 billion. Insiders said that the US retailer is selling 0.1445 billion shares at a price of USD 24.85 - USD 25.85 per share. In addition, the third-quarter performance outlook announced by Vipshop is not very good.
The index opened down more than 1%, with many stocks including Toyota Motor, Hitachi, and Fast Retailing falling more than 1%. Korean stock SK Hynix fell more than 2%, while Samsung Electronics fell nearly 1%.$Nikkei 225 (.N225.JP)$Today, Hong Kong stocks opened down across the board, with a 1.13% drop.
Third, the expectations released by the Fed are not as clear as the market's previous reaction. Fed director Bowman stated on Tuesday that there is still an upward risk of inflation, so they remain cautious about any changes in the Fed's policy stance. Overreacting to any single data may endanger the progress made. Moreover, Warren Buffet is still selling stocks during this US stock rebound.
Fourth, geopolitical progress is not going smoothly. US officials said that the ceasefire agreement in Gaza is facing bankruptcy.
Sudden sell-offs.
On August 20 local time, the three major US stock indices closed slightly down, and the Nasdaq Golden Dragon Index fell by 3.95%. Vipshop fell by more than 17%, iQiyi fell by more than 7%, Weibo fell by more than 6%, Xpeng, Li Auto, and Nio fell by more than 5%, Full Truck Alliance and Alibaba fell by more than 3%. JD.com's US stock trading after hours expanded its decline to 10%.
It is reported that the US retail giant Walmart is distributing 0.1445 billion shares of JD.com's pre-market trading securities shares, and will cash out up to USD 3.74 billion (approximately HKD 29.135 billion) at a price between USD 24.85 and USD 25.85 per share. Morgan Stanley is the broker after-hours. JD.com fell 4.6% overnight, and the stock price was discounted by 8.3% to 11.8% compared to the closing price. Walmart is the largest shareholder of JD.com. Walmart sold groceries and high-end women's e-commerce No.1 shop to JD.com in 2016, thereby acquiring 5% of JD.com's shares. Walmart subsequently increased its holdings and currently holds 10.8% of JD.com's shares.
The sell-off of Vipshop may be due to the performance outlook announced by the company last night. The data shows that Vipshop's revenue in the second quarter was RMB 26.9 billion, compared with RMB 27.9 billion in the same period last year; gross profit increased by 2.2% year-on-year, reaching RMB 6.3 billion; Non-GAAP net profit was RMB 2.2 billion; GMV was RMB 50.6 billion, which was the same as the same period last year. For the third quarter of 2024, Vipshop expects its total net income to be between RMB 20.5 billion and RMB 21.6 billion, a year-on-year decrease of about 10%-5%.
Analysts believe that Chinese listed companies are entering a peak period of performance disclosure. Due to the generally average economic data in the second quarter, the market generally expects that the half-year report of listed companies may not be too good. Reflected in the secondary market, it will be relatively cautious.
Hong Kong stocks opened today and fell across the board. $Hang Seng Index (800000.HK)$ Opening down 1.13%.$Hang Seng TECH Index (800700.HK)$falling 2.75%.
As of press time, the decline of the three major indices has narrowed, with the Hang Seng Index falling 0.63% and the Hang Seng Tech Index falling by nearly 2%.
Due to the expectations of potential bullish policies, capital is pouring into the cryptocurrency market. CoinShares Ltd. data shows that Bitcoin investment products received $1.27 billion USD (approximately RMB 9.2 billion) in inflows last week as the price of Bitcoin soared to its highest level in over a month.
On August 5th, the Nasdaq Golden Dragon Index hit a new historic low. There was a rebound after that, but the overall amplitude was not large. The sell-off last night may follow the US stocks to some extent, but there may also be its own factors. Then, how big are the unfavorable factors?
First of all, the Fed's interest rate cut expectations are not clear, and this ambiguity mainly reflects the magnitude of the interest rate cut. William Dudley, a former president of the New York Fed, said that Powell may suggest that tight monetary policy is no longer necessary, but he will not suggest how much this round's first interest rate cut will be, especially considering that the non-farm employment report will be released on September 6. Fed Governor Bowman said on August 20 that she still believes that there is an upward risk to inflation, but if price growth continues to slow, gradually reducing interest rates would be appropriate.
On August 23 local time, during the annual central bank conference held in Jackson Hole, Wyoming, USA, Fed Chair Powell will deliver an important speech that attracts global attention. Powell may take this opportunity to confirm whether the Fed will cut interest rates, but the focus of the market now is not whether or not interest rates will be cut, but how much they will be cut. Because of this, the market began to turn cautious. In early trading today, the Asia-Pacific market also followed suit and fell again. The Nikkei 225 index opened down more than 1%, and multiple stocks such as Toyota Motor, Hitachi, and Fast Retailing fell by more than 1%. The South Korean stock SK hynix fell more than 2%, and Samsung Electronics fell nearly 1%;
Secondly, although the US stock market has rebounded continuously recently, stock god Warren Buffett has continued to sell stocks during the rebound. According to data, Berkshire Hathaway, under Buffett's control, recently sold Bank of America again and sold 14 million shares for about US$550 million, reducing its stake to 12%. According to the Form4 document submitted to the US Securities and Exchange Commission last Monday evening, Buffett sold these stocks at an average price of $39.50/share last Thursday, Friday, and Monday. The company currently still holds 0.928 billion shares of Bank of America, worth nearly US$37 billion. Berkshire Hathaway has been an active seller since late July. As of August 1st, it has sold Bank of America's stocks continuously for 12 trading days. After taking a break for a few days, it resumed selling last week and has sold a total of 0.1 billion shares so far.
Finally, in terms of geopolitics, progress may be lower than expected. According to Politico's report on Tuesday local time, informed government officials said that the current ceasefire proposal in Gaza was jointly proposed by the United States, Israel, Egypt, and Qatar in July. It is the strongest version so far because the plan includes terms tailored to Hamas and Israel's requests. Israel has signed the agreement, but Hamas publicly stated that it will not accept the agreement. Insiders said that this is making US officials increasingly concerned that this proposal will be stalled as before.
Editor/Emily