It feels like we're back to the beginning of the year when global stock markets were hitting new highs while only the A-share market kept falling.Recently,emerging market indices in the Asia-Pacific region such as the South Korean Composite Index,Taiwan Weighted Index,and the Mumbai SENSEX 30 Index,as well as the US Nasdaq,have all set new phase highs,while the A-share market is fighting to defend the 3,000 point level.Today,it nearly broke through the 3,000 point mark at the end of the trading session.Is it planning to play around the 3,000 point level for another year?

The current pullback in the A-share market started on May 20th,which was the first trading day after the central bank's three major measures to rescue the real estate market were implemented.Capital chose to cash out first,waiting for the policies to take effect.The subsequent market trends indeed proved the foresight of these funds.The "three major measures" did not cause much of a stir in the real estate market,with new home sales remaining sluggish.The real estate sector has almost fallen back to the starting point of its rise,dragging down core assets such as baijiu and new energy.The stock price of Kweichow Moutai has broken through 1,500.

The failure of the real estate market rescue has once again caused market confidence to fall.Even though the central bank has repeatedly warned institutions that long-term bond yields are too low,yesterday at the Lujiazui Forum,the central bank specifically used the example of Silicon Valley Bank to warn non-bank institutions about the maturity mismatch and interest rate risks of holding medium to long-term bonds.However,today's 30-year government bond futures still set a new high.The market is not short of money; it's just idling,unwilling to invest,and unwilling to come to the stock market.

It's not just domestic capital,but also the northbound capital that has been net selling for 8 consecutive trading days,exceeding 35 billion.It is highly likely that it will continue to sell today,making it 9 consecutive trading days of net selling.

At the same time,the Chinese yuan is also continuously weakening.Today,the offshore yuan exchange rate broke through the 7.28 mark,setting a new low since last November.The continuous selling by foreign capital may also be related to the continuous depreciation of the yuan.Let's take a look at today's significant news:

The Loan Prime Rate (LPR) for June has been announced,with the 1-year LPR at 3.45%,the same as last month; the LPR for terms over 5 years is at 3.95%,also unchanged from the previous month.

Yesterday,the China Securities Regulatory Commission (CSRC) released the "Eight Measures on Deepening the Reform of the STAR Market to Serve Scientific Innovation and the Development of New Quality Productive Forces," which will support mergers and acquisitions with greater intensity.Today,the STAR Market and semiconductors saw a significant surge,with the STAR Market's semiconductor sector even experiencing a wave of stock price limits,with multiple stocks such as Dongwei Semiconductor and Qipai Technology hitting the upper limit.

According to the General Administration of Customs,the export value of inverters nationwide in May was 5.534 billion yuan,a year-on-year decrease of 25.39%,and a month-on-month increase of 12.15%.From January to May,the cumulative export value of inverters was 21.971 billion yuan,a year-on-year decrease of 38.44%.

Based on the data from the General Administration of Customs,the export situation of optical modules from Jiangsu and Sichuan was analyzed,with the export value in May being 3.081 billion yuan,a year-on-year increase of 200.23%,and a month-on-month increase of 3.64%; of which,exports to the United States were 1.393 billion yuan,a year-on-year increase of 313.0%,and a month-on-month increase of 0.35%.From January to May,the cumulative export value of optical modules was 12.851 billion yuan,a year-on-year increase of 133.02%; of which,cumulative exports to the United States were 6.144 billion yuan,a year-on-year increase of 222.47%.

According to a report by Caixin,analysts who once shorted Chinese technology stocks have now turned bullish.Recently,Yao Cheng,Co-Head of Asia TMT Research at J.P.Morgan,said in an interview that considering the improvement in cost structure and the reduction in competition,"we still expect Chinese technology stocks to rise by about 20% to 25%."

Societe Generale said in its latest report that although the U.S.stock market is still in the "best position" at the halfway point of 2024,a stable bet,investors need to start expanding their investment scope and increase opportunities in other asset areas.The general direction of their latest strategy has not changed,but it has added more global emerging market stocks,including increasing holdings in Chinese stocks for the first time since the end of 2022,while reducing positions in Japanese stocks.

Finally,a brief look at the market performance: as of the close,the Shanghai Composite Index fell by 0.42%,the ChiNext Index fell by 1.44%,the Hong Kong Hang Seng Index fell by 0.52%,and the Hang Seng Tech Index fell by 1.68%.The turnover of the two markets slightly increased to 0.72 trillion,with more than 4,400 stocks declining.We believe that the current market is too pessimistic about the domestic economy,and the downside risk for A-shares is limited.Conservatives have only seen the sluggish real estate market and the central bank's avoidance of excessive stimulus,but they have failed to recognize China's economic transformation and its determination to develop new quality productive forces.Recent policies have been aimed at establishing a system for technological innovation,and China can no longer follow the old path of stimulating real estate and infrastructure.We advise some institutions not to keep talking about excessive stimulus.During the recent correction in A-shares,technology stocks have achieved significant excess returns; focusing solely on the overall market will only obscure the bigger picture.