[Commentary] Avalanche of Chinese Stocks Against the Market

Author: MOS Fitness Group — Ivy001

July 23, New York (CNN Business) — It was a tumultuous week on Wall Street, but on Friday, stocks began to rise again, with every index closing at all-time highs. The Dow Jones closed up 0.7 percent, or 238 points, closing above 35,000 for the first time ever. The S&P and Nasdaq both climbed 1%.

However, in the midst of the red (up) stock market, most popular Chinese stocks fell hard on Friday. The CCP issued a new regulatory policy for the industry, which caused a major collapse in Chinese stocks. Among them, Chinese education stocks fell the most. New Oriental, Good Future, and Highway all fell 60% during the day.  

On the same day, JP Morgan downgraded the target price of New Oriental from $19 to $3.50, downgraded the rating of Highway from neutral to reduce and the target price from $37 to $3.50, and downgraded the target price of Good Future from $70 to $7.60 and the rating from neutral to reduce.

This is the second major collapse of Chinese stocks since July. The first was in early July, triggered by the CCP’s sudden forced removal of DDT software the day after the DDT IPO, causing all Chinese stocks to fall. After the DDT IPO incident, market confidence in Chinese stocks was deeply affected.

Today, the stock market rose across the board, with every index closing at an all-time high, and the Dow Jones closing above 35,000 for the first time. In this wave of stock market gains across the board, Chinese stocks bucked the market and plunged, led by education stocks in a collective avalanche, representing a complete collapse of investment confidence in Chinese stocks.

As in the previous drop downs, the irrational and unpredictable forced intervention of the CCP government in the market will inevitably lead to a large probability increase in investment risk. For every 1% increase in investment risk, the blow to investor confidence is multiplied tenfold or a hundredfold upwards. According to the law, if there is one, then two will be coming. Now the CCP’s sudden policy shift on the education industry is the “two” that overwhelms the Chinese stocks. For all Chinese stocks, this is not just a market fluctuation, this is a total loss of investor confidence, and the blow to Chinese stocks is irreversible.

As long as the CCP exists, investment confidence in Chinese stocks is unlikely to return. Only when the CCP is eliminated can Chinese stocks achieve true capital freedom, and investors can invest with safety and profit in a reasonable and consistent manner with normal market fluctuations. The cooperation of Wall Street capital giants with the CCP is tantamount to dancing with wolves, and the final result will be a total bloody loss.

Reference links:

https://www.cnn.com/2021/07/23/investing/dow-sp500-stock-market-today/index.html

http://global.eastmoney.com/a/202107242012743833.html

Proofread/Posted by: Brain Sanitizer

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