On Tuesday, the Nasdaq rose by 1.24% to 20,173.89 points, reaching a new high; the S&P 500 Index increased by 0.38% to 6,074.08 points.
Today, ETFs tracking US stocks led the gains, with the CSI Cons Stap ETF rising over 4%, and the E Fund CSI Technology 50 ETF, Chinaamc NASDAQ 100 ETF(QDII), Nasdaq Index ETF, Nasdaq 100 ETF, GFNZ100, and Nasdaq ETF from E Fund and Wells Fargo also increasing.
Since the beginning of this year, funds have been using ETFs to buy US stocks, among which, the Invesco Nasdaq Technology ETF, Harvest Nasdaq Index ETF, Bosera S&P 500 ETF, Morgan Hong Kong Dividend Index ETF, Southern S&P 500 ETF Fund, CMB NASDAQ 100 ETF, and GF Nasdaq ETF had net inflows of 5.07 billion yuan, 4.706 billion yuan, 4.332 billion yuan, 3.571 billion yuan, 2.905 billion yuan, 2.316 billion yuan, and 2.264 billion yuan respectively.
Huafu Securities pointed out that the concentration of US stocks continues to rise, and the siphon effect has not yet shown a reversal trend: (1) Global Market Cap share: As of early December, the market cap of US stocks accounted for 50.8% of the global market cap, up 4.3 percentage points since the end of 2023, approaching the previous high of January 2002 (51.3%); (2) Equity fund allocation ratio: Since the beginning of the year, global equity funds have continuously flowed into US stocks, raising the allocation ratio of US stocks from 59.3% at the end of 2023 to 62.1% at the end of October, reaching a new high since data began in 2001; (3) Concentration of individual US stocks: As of early December, the top ten companies in the US stock market accounted for 36.8% of the total market cap, slightly lower than the level at the end of June (37.0%), but still at a high level since 2005; (4) Industry structure: The Technology Sector accounted for 41.2% of the market cap, surpassing the levels seen during the tech bubble in 1999.
From a fundamental perspective, as of the third quarter of 2024, US stock earnings remain robust, and the profit expectations for 2025 still lead the major global markets. The EPS growth of the S&P 500 in Q3 2024 was 5.9%, significantly down from Q2 (11.4%). However, excluding base effects and adopting a two-year compound calculation, Q3 earnings for US stocks continued to improve (3.9%→5.6%); sector-wise, TMT, Pharmaceuticals, and Consumer Discretionary showed leading growth, while Energy, Materials, and Industrials lagged; in terms of contribution, the earnings of US stocks in Q3 2024 were mainly driven by TMT and Pharmaceuticals.
Looking ahead to 2025, the earnings from US stocks are expected to continue their relative strength: According to Factset data, the EPS growth for most economies will significantly improve in 2025, with US stocks increasing from 8.6% in 2024 to 16.8%, second only to South Korea among Developed Markets. The strong earnings from US stocks are driven on one hand by the high prosperity of the AI Industry Chain and the recovery of the Semiconductors sector, boosting the TMT sector, while on the other hand, the domestic demand in the USA remains strong, and the Federal Reserve is in a rate-cutting cycle, which is Bullish for the Consumer, Finance, and other domestic demand sectors.
Regarding the US stock market, Chuancai Securities pointed out that the overall performance of the US stock market in 2024 is strong, with the three major stock indices experiencing significant increases over the year. Since the beginning of this year, the gains in the US stock market have mainly concentrated on high-growth, high-valuation Sectors, particularly large Technology stocks performing outstandingly. Currently, US stock valuations remain relatively high. With Trump's victory in the 2024 US presidential election, special attention should be paid to the implementation of Trump's 2.0 policies in the US market in 2025. If Trump advances tax reduction measures and regulatory relaxation policies after taking office in 2025, it will create a more favorable environment for corporate earnings, thereby boosting US stock market performance. It is important to note that the market expects the Federal Reserve to maintain a rate-cutting stance, but inflationary pressures in the USA still exist. Should a series of fiscal expansion policies by the Trump administration be implemented sequentially, with inflation continuing to rise beyond expectations, it may force the Federal Reserve to tighten monetary policy, which would increase corporate financing costs and lower corporate earnings expectations, pressuring the US stock market. Overall, next year, the US stock market will still face multiple influences from slowing economic growth, geopolitical conflicts, and Trump's policies, leading to significant uncertainties in the market.
