Autobots' global stock market is in turmoil, and cars have become the "bridgehead" of A shares.

As the public health incident in COVID-19 spread widely in Japan, South Korea and Italy, the global capital market encountered blood shed. A-shares then staged a long and short war, and the automobile industry became a "bridgehead" for bulls.

Text/Autobots Scroll

On February 24th, the global capital market staged "Black Monday". The stock markets in Japan, South Korea, Europe and the United States were terrible. The Dow Jones Industrial Average in the United States fell more than 1000 points for the second time in history. Toyota Motor Corporation of NYSE fell 3.27%, Tesla fell 7.46%, Ford fell 4.06% and General Motors fell 4.50%, all of which fell more than the Dow except Toyota. This seems to be just the beginning. On the 25th, the Dow fell nearly 900 points, while Tesla, Ford and General Motors fell more than 4 points, and the bulls had no resistance.

This sudden panic stems from a report released by Goldman Sachs, which said that people underestimated the negative impact of COVID-19 on the global economy. At the same time, some countries outside China, especially Japan, South Korea and Italy, exposed the large-scale spread of public health incidents in COVID-19, and the number of people diagnosed and isolated in these countries increased sharply in just a few days. An American whistleblower has also become the focus of hot discussion.

Overseas investors wake up like a dream, opening on Monday, selling out, not selling on Monday and continuing to sell on Tuesday. The uncertainty caused by the epidemic is immeasurable, and the impact on the economy is by no means short-term.

How much influence will the external market have on A shares? On Tuesday, the Shanghai Composite Index plunged 88 points at the opening, and then was pulled back above the zero mark within the next hour. Immediately after the sell-off struck again, the two cities quickly killed each other, and the Growth Enterprise Market fell by 4 percentage points in more than half an hour. The bears seem to have won the market, but the situation is reversed again. A large number of buying poured into technology stocks, and the stock index was strongly pulled up to the close. On February 25th, in the battle of A-share long and short, the turnover of the two cities exceeded 1.4 trillion yuan, the highest in the past 55 months. Not only did the turnover exceed one trillion yuan for five consecutive days, but the Growth Enterprise Market also hit a record high of 320 billion yuan.

On February 25th, the A-share auto sector rose by 1.72%, ranking fourth among 56 industry sectors. From February 4th this year, shortly after the outbreak of the epidemic to February 25th, 16 trading days, the automobile sector rose by 23%, while the Shanghai Composite Index rose by 12%.

There are 18 shares in the automobile sector, including vehicle manufacturers such as Zotye Automobile, Lifan and Jianghuai Automobile, and upstream suppliers such as Sheng Jun Electronics. Among the top gainers are Zhongtong Bus, Desai Siwei, BYD, Foton Motor, China Bus, Yutong Bus, FAW Li Xia, Beiqi Blue Valley, Jinbei Automobile and Great Wall Motor.

The reaction of Chinese and American stock markets to the same incident is totally different, and the performance of China auto stocks is obviously better than that of American auto stocks. Why? Isn't it said that cars are the industry that benefits from the epidemic? Is this also divided into countries and regions?

Analyzing the reasons, Autobots believe that the rapid rise of A shares and the epidemic situation are highly consistent on the time axis. At present, the stock market rally is mainly in science and technology, and the "new four modernizations" of automobiles are among them, such as automobile electronics enterprises such as Sheng Jun Electronics and Desai Siwei, and lithium products and power battery enterprises such as Contemporary Anpu Technology Co., Ltd. and Ganfeng Lithium Industry.

Looking at a longer time line, the rising trend of GEM driven by technology stocks began in the middle of 20 19, but it rose faster after the outbreak of the epidemic.

What is the focus of the market in 20 19 years? Yes, it's a Sino-US trade dispute. Trade disputes seem to have eased now, but they have the same feature as the epidemic, that is, globalization is blocked. No matter what the trade negotiations are, the U.S. strategy of banning China's high-tech industries will not change. The spread of COVID-19 in the world will greatly reduce the traffic between countries. At present, many domestic air tickets are below 10% discount, which shows to what extent the flow of people has dropped.

Some economic analysts believe that the duration of the epidemic is very important, and it took China 40 years to become a global manufacturing base. If the epidemic continues for too long, many factories will leave China, which will deal the biggest blow to China's economy.

The current situation is not that other countries are afraid of China-infected people. China worked hard in Qixin for more than a month, and the epidemic was finally controlled, but COVID-19 has begun to spread in other countries. China is now also afraid of the "export-to-domestic" virus in Japan and South Korea. Qingdao, Yantai and Weihai in Shandong Province have asked passengers from South Korea to be sent to hotels for isolation regardless of nationality.

The core logic of this huge wave of rising technology stocks is the domestic substitution tide of "relying on others and relying on yourself", especially the key parts with high technology content. In fact, in the past two years, the trend of domestic substitution is particularly obvious in the automobile industry. This capital market hype is not only about the automobile industry, but also covers various fields such as mobile communication, mobile phones and computers.

On February 25th, the top industries 10 were communication equipment, semiconductors, automobiles, components, electrical equipment and telecom operations. China brand is the main driving force of domestic substitution. On the one hand, I am worried that foreign goods are out of stock and will be prepared with both hands, such as Huawei; On the other hand, it is to reduce costs and increase market competitiveness through domestic substitution. Brand enterprises will actively cultivate upstream spare parts enterprises and realize the localization of high-tech spare parts.

Today, the global economic environment is extremely complicated. The biggest advantage of China is that the industrial chain of manufacturing industry is relatively complete, which can be said to be the most complete country in the world, without one. When the global economic and trade exchanges are seriously blocked, we can only rely on ourselves, and the tide of domestic substitution is unstoppable, and the epidemic has accelerated this process. This is why the global stock market plummeted, but A shares refused to accept it, staged a long and short war, and the bulls won.

On February 26th, Growth Enterprise Market of A shares plunged by 4.66%, which may be a correction of short-term rapid rise. Because the most difficult period of COVID-19 epidemic in China has passed, many provinces and cities except Hubei have achieved zero diagnosis for several days in a row, and Wuhan has finally appeared the situation of "waiting in bed". But for other countries, it is hard to say how the epidemic will develop. The spread of COVID-19 in Japan, Korea, Italy and other countries should not be underestimated, and the situation is unpredictable. China market and overseas market can't judge the epidemic in the same breath, but the general trend of domestic substitution brought about by blocked globalization has become a new chapter of the times. (Text/"Autobots" scrolling, part of the picture source network) Copyright statement This article is an exclusive original manuscript of Autobots, and the copyright belongs to Autobots.

This article comes from car home, the author of the car manufacturer, and does not represent car home's position.