We bid farewell to the magical year of 2020, leaving people all over the world with endless bitterness, spicyness, and sourness, but no sweetness. Modern human civilization is so highly developed, but it is still vulnerable to the subtle coronavirus. As the epidemic spread early last year, the economies of various countries suffered a huge blow, and the world's major stock markets also experienced ups and downs, like a roller coaster. The U.S. stock market has experienced both fire and ice. In just ten days, there have been four "circuit breakers". Even Buffett, who has been in the "battlefield" for a long time, can't help but sigh: He has never seen such a scene in his 89 years of life. , which is actually "live and see you for a long time".

Since late February, within a month, the Dow Jones Index has fallen by 38%, making US stock investors truly feel what it means to "cry without tears." But "miracles" always happen out of despair. Due to the Federal Reserve's unlimited monetary easing policy, it began to print money and release money. Since late March, U.S. stocks have "fighted back", rising all the way, and even reaching new highs. The major U.S. stock indexes are currently at all-time highs. Will U.S. stocks continue to rise strongly and sharply in 2021?

First, let’s analyze the roots of the current bull market in the U.S. stock market: The “desperate counterattack” of U.S. stocks in 2020, which has risen sharply, is not a precursor to an improvement in the U.S. economy, but the result of the Federal Reserve’s massive release of water, causing a rising tide to lift all boats. The total size of the Federal Reserve's assets and liabilities in 2020 is approximately US$7.4 trillion, an expansion of US$3.2 trillion compared with 2019, and the rate of water release has more than doubled. Funds are profit-seeking. With so much currency, they must seek better returns, and the stock market is the best place to go. This has naturally led to the strong "V"-shaped rebound of U.S. stocks.

Although the Dow Jones Index has rebounded by 71% from its lowest point, the annual increase is 7.2%. In other words, against the backdrop of the Federal Reserve’s aggressive release of water, the US stock index has actually only returned to where it was before the epidemic. level. During the same period, for A-shares, the Shanghai Composite Index, which had the smallest increase, also reached 14%, while the Growth Enterprise Market's annual increase was even as high as 65%, and the Shenzhen Stock Exchange Component Index's annual increase was 38%. Without comparison, there is no "harm". This is the true reflection of the economic comparison between China and the United States under the epidemic. Although the People's Bank of China has also released a large amount of water, it is generally relatively restrained and not as crazy as the Federal Reserve.

Assuming that the U.S. stock market continues to strengthen significantly in 2021, it not only needs technical support, but also needs to go a step further in loose monetary policy to increase the huge market value of the U.S. stock market. From a technical analysis, the U.S. stock market is already in the high head area and has touched the mid-term pressure line. In theory, it is difficult to continue to rise strongly. On the contrary, it will start a sharp decline mode at any time. From the perspective of monetary policy, the Fed's liabilities are huge and overwhelmed, and the growth rate will no longer be as extraordinary as in 2020. Without the source of living water, it will be difficult for U.S. stocks to continue to strengthen significantly.

With the popularization of vaccines this year and the strengthening of epidemic control measures by governments around the world, we will definitely not be caught off guard or even arrogant and ignorant like last year. There is a high probability that the world's epidemic will happen anytime in the spring. Gone by the wind. Whether it survives or not, the world economy will surely fight back in a truly desperate way. As the world's largest economic and technological power, the United States has been suffering from the epidemic, but it still has huge endogenous power that cannot be underestimated. This can be seen from the recent strength of the US dollar. The Fed often operates counter-cyclically and will surely tighten the monetary valve at the appropriate time. A stronger U.S. dollar is likely to be the last straw for U.S. stocks.

Comprehensive analysis shows that the probability of U.S. stocks rising sharply again in 2021 is extremely low. On the contrary, it is very likely that due to the negative impact, US stocks will once again start a new round of sharp correction, and the possibility of being cut in half is not even ruled out. As for when the U.S. stock market will start a new round of mid-term bear market, time is not the most important. It requires the comprehensive factors of "timing," "geography," and "people and people." In particular, the emergence of a certain "black swan" event will likely become the The "catalyst" for the mid-term bearish trend in U.S. stocks. The global economy has long been integrated. When one loses, everyone will suffer, and the other will prosper. This is especially true for the global stock market. Especially for U.S. stocks, if a mid-term bear market begins, the world's major markets will undergo a major oscillation. Of course, A-shares and Hong Kong stocks will not be immune, so it is better to be cautious.