According to the latest statistics of S & P global market intelligence, as of August 9, 424 companies in the United States have filed for bankruptcy, which exceeds the number of bankruptcy filings in any comparable period since 2010. Some foreign media commented that “this is an economic earthquake with no signs of easing.” It is worth noting that, on the one hand, there is a wave of bankruptcies, while on the other hand, the US stock market and core companies frequently set new highs. The economic and stock market performance deviates from each other, and the Buffett index used to measure the stock market valuation bubble soared to the warning line.
the US bubble alarm sounded and changed the attitude of Wall Street giants. The God of stocks, Warren Buffet, began to bet on gold after he cut his position, while Soros, known as “financial giant”, strongly sang short US stocks and called out “no participation”. Facing the uncertainty of global financial market, what should China do? < / P > < p > according to S & P’s global market intelligence data, as of August 9, 424 companies have filed for bankruptcy, more than any comparable period since 2010. The reason is that the U.S. economy has shrunk dramatically. The report includes listed companies with assets or liabilities of more than $2 million and private enterprises with assets or liabilities of more than $10 million. “Novel coronavirus pneumonia epidemic situation in 2020, a large number of departments were affected by bankruptcy,” S & P said in the report. But consumer centric industries are particularly hard hit. ” < / P > < p > and this alarming data is not groundless. Not long ago, many institutions have done similar statistics, which proves that the United States is experiencing an unprecedented “wave of bankruptcy”. Industry analysts believe that the number of U.S. commercial bankruptcy filings is increasing rapidly and may deteriorate further in the third quarter. According to a previous report by Xinhua news agency, statistics from EPIQ, an industry organization, show that the number of new bankruptcies in the United States has reached 3604 since the beginning of this year, an increase of 26% compared with the same period last year. At the same time, there is an accelerating trend in bankruptcy applications. In June this year, the number of new applications was 609, with a year-on-year increase of 43%. In addition, the macroeconomic data released by the US Department of commerce is not optimistic. According to public data, the growth rate of US GDP in the first quarter was – 5%, and the situation deteriorated further in the second quarter, with a historical contraction of – 32.5%. During the financial crisis before 2007-2009, the biggest drop was only 8.4%. < p > < p > on August 2, Lord & Taylor, a century old retailer in the United States, filed for bankruptcy protection under Chapter 11 of the bankruptcy law on the same day, becoming another well-known retail enterprise that has been seriously damaged by the epidemic and filed for bankruptcy. On August 12, the U.S. button retailer Stein Mart also announced a request for bankruptcy protection. According to the foreign media EFI news agency in New York, the above-mentioned S & P report points out that the most seriously affected industry is the non essential consumer goods industry. More than 100 large enterprises have gone bankrupt, including 20 retailers with a long history, such as Booker brothers, an old clothing company in the United States, Lord Taylor department store, which owns the oldest large department store, and popular brands such as Crewe clothing group and Ann Taylor. Among them, Niman Marcus’s high-end stores are likely to be the bankrupt retailers that have been widely concerned by the market. More than a year ago, the company opened a 20000 square meter store in the heart of New York’s Hudson city square exclusive business zone. But after the outbreak caused a shutdown, the company decided to leave it idle. According to S & P’s global market financial intelligence data, the number of U.S. retail bankruptcies has reached 43, approaching the peak in the last decade. < / P > < p > many people in the industry believe that it is only the beginning now, and it has almost become an established fact that the bankruptcy tide in the second half of this year will accelerate. There will be a second wave of bankruptcy next year. < / P > < p > in addition to the consumer sector, the industrial and energy sectors are also considered to be severely affected by the disaster. According to the above report, a total of 100 large enterprises in the industrial and energy sectors went bankrupt this year. Among them, Hertz company, which is mainly engaged in car leasing, and Chesapeake energy company, which has mastered the advanced technology of “hydraulic fracturing”, have liabilities of about US $24 billion and nearly US $12 billion respectively. Due to the severe impact of the epidemic on global energy demand, the international oil price began to plummet in March. The current oil price has dropped by about one-third compared with the beginning of the year when the oil price exceeded $60 a barrel. According to a report by Haynes and Boone, during the ultra-low oil price period, more than 50 U.S. oil and gas companies have filed for bankruptcy, including 29 exploration and production enterprises. The debt of these US companies has reached US $49.69 billion, twice the debt of energy companies that filed for bankruptcy last year. “With the spread of the new coronavirus, optimism about the economy and spending on the retail sector are being tested every day,” said Jack Kleinhenz, chief economist at the American Retail Federation “Only time will tell, but the conclusion is that the economy is far from out of danger,” he added It is worth noting that, on the one hand, the economic data is bad, and the “bankruptcy wave” is sweeping, but on the other hand, the US stock market frequently hits new highs, and the bull market of the US stock market is booming. Under the influence of U.S. economic stimulus, the main indexes of US stocks frequently hit new highs. According to the data, since March this year, the Dow Jones industrial index has soared by more than 8700 points. In less than half a year, the Dow Jones industrial index has risen by more than 45%. < / P > < p > in this wave of increase, the core companies also set a new high in stock prices. At the end of the U.S. stock market on August 14, apple, a technology company, rose 1.6% to close at $459, a record high, with a market value close to $2 trillion. On August 3, Microsoft’s share price hit a new high of $217, and the streaming media company Netflix also set a new high on July 13. Analysts believe that the core reason for the continued rise of US stocks is that the Federal Reserve has opened the mode of unlimited quantitative easing, kept interest rates to the lowest level, and purchased treasury bonds and corporate bonds on a large scale to further push up the stock price. Secondly, the market value of core technology companies has a greater impact on the index, and the soaring share prices of large companies have driven the index to strengthen. In addition, the joint efforts of financial institutions and listed companies have also become an important factor in the stock price speculation. However, in the US stock market, there are three important factors, i.e., bankruptcy, stock market valuation, which are the most important factors. < / P > < p > recently, many media have paid attention to the surge of Buffett index. The Buffett index measures the valuation level of a country’s stock market by the proportion of the total market value of the stock market in GNP (or GDP), which is also called the asset securitization rate index. In 2001, when analyzing the U.S. stock market, Buffett pointed out that if the asset securitization rate is between 70% and 80%, the purchase of stocks may perform better. If the ratio is close to 200%, it is tantamount to playing with fire. According to the statistics of the World Federation of stock exchanges (WFE), by the end of June this year, the total market value of global stock market reached 89 trillion US dollars, exceeding the global GDP level of 2019 of 87.85 trillion US dollars, which means that the Buffett index has exceeded 100%. Considering the impact of the epidemic on this year’s GDP data, this ratio will be higher. Many market analysts interpret it as a dangerous signal, believing that when the Buffett index rises to more than 100%, it should tend to avoid risks. According to the historical data of securities times and data treasure, it is found that the total market value of global listed companies exceeded GDP for six times, respectively in 1999, 2000, 2006, 2007, 2017 and 2019. Among them, the peak of the stock market in 2000 and 2007 was broken by the Internet bubble and the subprime crisis. Then the collapse of the global stock market confirmed Buffett’s theory. < / P > < p > according to the forecasts of most international institutions, the global GDP will decline by 4% to 5% in 2020. Based on the 5% GDP decline, the current global stock market’s Buffett index is about 106%, but it is still not higher than the level at the end of 2017 and 2019. This also means that there is no need to panic too much about the “anomaly” of this data. However, in the short term, there is still a certain risk of market volatility when the stock market is divorced from the economic indicators, which has also aroused the concern of the industry. “The gap between market and economic data has never been greater,” Matt king, head of global credit strategy at Citigroup, wrote in a research note < / P > < p > it is worth noting that in addition to “abnormal” important indicators, the recent actions of Wall Street financial giants have attracted more attention from the market, and their attitude seems to indicate the expectation of the future market trend.
last week, Soros, a financial giant, accepted an exclusive interview with the Republic of Italy, insisting on attacking Trump and saying he no longer participates in the market that is already full of bubbles.
Soros acknowledges that the US stock market has fallen into a bubble fuelled by the Fed’s liquidity, which he is avoiding now. He said market gains were supported by more fiscal stimulus and expectations that trump might announce a vaccine by November. According to Soros, the risk of US stocks may come from two aspects. One is excessive expectation from the market. Expectations of more fiscal stimulus from the U.S. government and the availability of a new vaccine by November have helped the stock market to its highest level. Second, trump, the president of the United States, who is seeking re-election at all costs.
has no longer been involved in the “bubble” market, Soros said. “Two simple propositions” have always helped him gain an advantage in the market, but these advantages have gone far away. These two propositions are: first, the market participants’ view of the world is always one-sided and distorted, that is, the fallibility principle; second, the wrong view will lead to improper behavior, thus affecting the event itself, that is, the reflexivity principle. At the same time, the recent actions of Warren Buffett, known as the “God of stocks”, seem to imply the attitude of short selling US stocks. It is reported that last week, Berkshire’s second quarter position report showed that Mr. Buffett recently bought nearly 21 million shares of Barrick gold, worth $563 million, while reducing his holdings in Wells Fargo and JP Morgan. < / P > < p > the move of Warren Buffett has also attracted the attention of the industry. Robert Kiyosaki, a well-known financial writer, recently posted on social media that Buffett’s purchase of gold was a big change. “After years of losing gold, Mr. Buffett decided to buy Barrick and sell financial stocks. This is a great benefit for gold and silver, but terrible news for the poor and the middle class. The U.S. economy is about to fall apart. ” At the end of last week, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said publicly that in the international monetary system dominated by the US dollar, the current unprecedented unlimited quantitative easing policy of the United States actually consumes the credit of the US dollar, erodes the foundation of global financial stability, and will have unimaginable negative effects. < / P > < p > “emerging economies may face multiple pressures such as imported inflation, shrinking foreign currency assets, exchange rate and capital market shocks. More stringent