Last night was the shopping carnival in China, and also the sleepless night for global capital. After buying things, take a look at the stock indexes, and it feels like the computer has crashed!
Currently, tracking two industries entering a severe recession period:
One is the European banking industry, the other is the semiconductor.
On the first day of rumors about Credit Suisse's bankruptcy, I jumped in. Not for anything else, just because I felt that it's not that easy for the European systemic banks to go bankrupt - the wind is too strong and can easily cover your eyes. Lehman relied on lending to support the family, while Credit Suisse is guarding the family through wealth management. It's not something that can be spoken of in a day!
Due to the direct impact of the Russia-Ukraine conflict on the European finance, as well as the Fed's pumping effect, combined with the soaring energy csi commodity equity index, the banks have become the most direct victims, with their valuations basically cut in half. Currently, it's a fifty percent discount. 'We are still in a high inflation environment, and the economic outlook is still not optimistic.'
Although the crisis at Credit Suisse is an isolated event and does not represent the deterioration of the overall European financial environment, it does reflect the global financial liquidity crisis, global economic slowdown, and doubling of global financing costs, leading to a series of margin calls and defaults, massive layoffs, and large-scale divestment of business to maintain the stability of disposable cash flow and Tier 1 capital - selling at a low price to save themselves!
If the Federal Reserve further slows down interest rate hikes, undervalued European banks will have an opportunity for valuation recovery, a moment of respite. If short-term US Treasury yields continue to decline, consumption will be stimulated, and bank profits will undergo a benign transformation, resulting in a stock price increase.
The semiconductor industry...