Hot spot information

The US fiscal year 2021 has only begun two months.，The deficit has reached 429 billion dollars

The U.S. Treasury Department announced just two months ago that the United States ended fiscal year 2020 with a huge deficit. In fiscal year 2020, the U.S. budget deficit widened to $3.1 trillion, a record high, more than triple the $954 billion in the previous fiscal year. Of this total, the fiscal expenditure was $6.552 trillion, almost double the revenue ($3.42 trillion). As we enter fiscal year 2021, the situation is even worse.

At the beginning of fiscal year 2021, the United States adopted a "helicopter drop money" monetary policy. In the first two months of the new fiscal year (October and November), the US budget deficit reached $429 billion, an increase of $86 billion from a year earlier, and the largest deficit ever recorded in the same month.

More than 54 million people lack enough food, and the future of the US economy is worrying.

A few days ago, data showed that the initial consumer confidence index in the United States unexpectedly rose to 81.4 in December, exceeding market expectations, but still far below the level of around 100 before the outbreak. The latest data may reflect US consumers' expectations for the COVID-19 vaccine, but as the epidemic continues to worsen in the US, the COVID-19 vaccine is unlikely to have a significant effect, at least in the short term. The US Congress remains deadlocked and unable to agree on a new bailout plan, which makes consumers' outlook for their own financial situation basically unchanged, indicating that the upcoming end-of-year consumer season is still not optimistic.

Global climate governance requires countries to join hands

On December 12, on the fifth anniversary of the Paris Agreement on the global response to climate change, the 2020 climate ambition summit was held by video, giving new impetus to the 26th climate change conference next year. While countries around the world are committed to recovering their economies from the COVID-19 epidemic, reviving global climate governance and building a greener environment will be an important task.

Sustained growth of foreign trade，Contribute to China's strength

According to customs statistics, in the first 11 months of this year, China's imports and exports of goods totaled 29.04 trillion yuan, an increase of 1.8 percent over the same period last year. Among them, in November, China's foreign trade imports and exports totaled 3.09 trillion yuan, an increase of 7.8 percent, achieving positive growth for six consecutive months. At the beginning of this year, the sudden COVID-19 epidemic had a serious impact on China's economy, and foreign trade imports and exports were faced with severe challenges. In this regard, the CPC Central Committee and the State Council have stepped up macro-policy responses, solidly done a good job in the "six stability" work, fully implemented the "six guarantees" tasks, and made major achievements in overall epidemic prevention and control and economic and social development. In particular, with the landing of a series of policy measures, market expectations are gradually stable, and policy effects continue to appear.

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Daxing looks at the market

Bolian:The Fed will ease on a larger scale when there is no way out.

The central bank's stimulus measures are the only effective support for global asset prices in 2021, according to economists at Bollian Asset Management. In order to promote economic recovery, "the Fed will certainly do more easing when there is no way out next year, which will hold up asset prices." "

When the Fed's interest rates remain at zero, that is when US stocks begin to re-enter a new bull market, but when the Fed raises interest rates again, US stocks will be in a relatively volatile upward process. At present, under the circumstances that the Federal Reserve will not start to raise interest rates until 2022, US stocks will still be a volatile upward process between now and next year. Analysts think it should be easy for the s & p to break through 4000 next year, rising only about 8 per cent from its current level.

Bank of America Corporation:The United States may not return to long-term trend growth until 2022.

While global economic growth and corporate profits will rebound in 2021, risk assets and overall indices will have only modest returns, said Bank of America Corporation, a strategist. The US may not return to long-term trend growth until 2022, "which makes us suspicious of increasingly enthusiastic markets. "

"now, the bad news is good news," analysts said, adding that the epidemic and economic pessimism put pressure on policy makers to introduce a new round of fiscal stimulus. "next year, good news will be bad news." Vaccines, stimulus and rising markets will be excuses for the sharpest fiscal tightening in US history.

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Blackrock: the IPO frenzy of US stocks has created the most since the Internet bubble, which is not sustainable!

The frenzy of the IPO market in US stocks this year is the highest since the dotcom bubble in 2000. At the same time, Blackrock warned the current frenzied IPO market that excessive IPO pricing was "unsustainable" and that there could be many "accidents" in the future. Data show that there have been 430 IPO transactions in the US stock market so far this year, the highest level since 2000, and the amount of money raised has exceeded $160 billion, an all-time high.

Us stocks have experienced a sharp fall and rise this year, which has led to a sharp increase in short-term traders such as Robinhood and quantitative traders this year, which in turn have further exacerbated speculative sentiment in the market, with some market experts repeatedly warning of a "bubble". Blackrock analysts are cautious about the current hot IPO market, saying that the pricing levels of some IPO are ultimately "unsustainable".

Deloitte: Asia will be the first to recover in 2021

As Asia, which was the first to be hit and recovered relatively quickly, 2021 may be the time to rise. The three forces of recovery, rectification and reform will push the Asian economy out of the shadow of the epidemic. Countries including China, Japan, South Korea, India and Vietnam are expected to rebound by varying degrees in 2021. Greater growth will be achieved in infrastructure, communications, information technology, life sciences and other industries, and Asian economies with more room for policy adjustment are expected to lead the global economic development. The same is true in regions with strong domestic demand engines.

As far as exports are concerned, technology will become a bright spot for growth, especially in the context of many new generation technologies constantly changing from concept to reality. Supply chain restructuring is conducive to the development of economies with lower production costs, while foreign direct investment is likely to usher in a wave of recovery. The Deloitte report points out that the cessation of protectionist measures by the global superpowers, interest rate cuts in some countries, and the further implementation of unconventional monetary policies, such as yield curve control and forward-looking guidance, are important factors to get the economy back on track.

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Views on the allocation of investment institutions

Blackrock: be optimistic about risky assets，Reduce US debt holdings

Blackrock believes that with the distribution of vaccines, the global economic recovery will accelerate next year, and investors should consider increasing their holdings of stocks and reducing their holdings of US debt. Blackrock strategist said that in terms of economic activity, 2021 is a very important year for the global economy to restart, and central banks are expected to keep interest rates within a fairly narrow range.

On the US side, analysts say the company remains focused on high-quality companies in the market, especially those that are still strong without fiscal stimulus (both parties are still sawing). The company also favors periodic stocks such as housing, cars, basic metals and so on. The outlook for technology stocks is optimistic, and companies are expected to maintain high profits in a low interest rate environment. Analysts believe that the main risk for technology stocks is a possible increase in corporate tax, but the likelihood of an increase in corporate tax has been greatly reduced with both parties controlling the Senate and House of Representatives.

On the bond market, Blackrock advised investors to reduce their holdings of US Treasuries in the next 6-12 months, but increase their holdings of TIPS (inflation protected bonds). Given the current low interest rates on US Treasuries, their traditional role as a hedge against stock market risk is weakening. In the medium term, the market faces a higher risk of inflation, and inflation-linked bonds will outperform the market.

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