Financial Crisis | Historical Insights on Global Markets
What to do with a stock market crash: 2025, how should investors deal with it?
Global stock markets suffer from panic sell-offs
The global stock market crash of April 7, 2025, compared to Black Monday on August 5 last year, witnessed a panic sell-off in major global stock markets.
U.S. stocks enter technical bear market
The top three U.S. stock indexes $S&P 500 Index(.SPX.US)$ $Nasdaq Composite Index(.IXIC.US)$ $Dow Jones Industrial Average(.DJI.US)$ The fall continues, the moment of the pause is over, $ S&P 500 Index Mainstream (ESMain.us) $ With a low of 4832 points on the board, US stocks also entered the “technical bear market” (highs fell more than 20%).
Systemic risks of Hong Kong stock overlay
Exaggerated, Hong Kong stocks that closed last Friday's holiday, $Hang Seng Index(800000.HK)$ Today it fell more than 3100 points to 19706, the final yield fell 19828 points, fell 3021 points or 13.2%, and traded at $620.8 billion on the full day, breaking the record on October 8 last year.$Hang Seng TECH Index(800700.HK)$ A drop of more than 17%. Seven constituent stocks fell by more than 20% (including: $LENOVO GROUP(00992.HK)$ , $BYD ELECTRONIC(00285.HK)$ , $HORIZONROBOT-W(09660.HK)$ , $KINGDEE INT'L(00268.HK)$ , $XIAOMI-W(01810.HK)$ , $SUNNY OPTICAL(02382.HK)$ , $XPENG-W(09868.HK)$ (which are some of the most hyped tech stocks this year). except $KINGSOFT(03888.HK)$ In addition, all major index stocks also fell by more than 12%. The author has always thought that the basics are better $TENCENT(00700.HK)$ Already the second best performing stock in the Nicoteca index, it is still down more than 12.5%
。 The whole “systemic risk” is overshadowing the performance of Hong Kong stocks today.
Impact of Market Volatility and Tariffs
The negative effects of Trump's tariffs were expected, but the impact on the stock market was much higher than expected, and the authors and several friends around them could not predict such volatility even if they were cautiously conservative. This is due to the fact that events are further straining global trade relations, and the risks and fears of a global economic downturn are gradually increasing.
Faced with an unprecedented stock market crash, many investors' questions today are confident that they do not escape the following two questions: “What about the stock market tomorrow? Can we bounce or fall again” or “When will we see Hong Kong/US stocks?” The pen holder really does not have a crystal ball can not answer, thinking that these short lines are meaningless judgments
The root causes of stock accidents and their consequences
Liquidity Issues and Redemption Trends
First of all, recent declines in Hong Kong and US equities, apart from the fundamental challenges of the trade war, have undoubtedly been a liquidity issue. Some large financial institutions are facing the emergence of a “redemption tide” as recession and trade war risks escalate, causing some risky assets to be sold off. In historical data, stock market falls are expected to take a breather after the stock market experienced a panic sell-off triggered by the “Redemption Tide” and then stabilised amid the easing of stimulus policy support. It is worth noting, however, that in many cases, these cataclysmic declines have occurred at the bottom of stock market bear markets; however, both Hong Kong and US stocks are now at higher valuations (above the 10-year average). The Hang Seng Index fell by more than 13.2% today, causing the year-on-year gains to evaporate (which is rare for writers). The current market situation is being influenced by Trump's policies, and as the previous author's article said, monetary policy alone is unlikely to reverse the performance of the current economic situation.
Formation and impact of the technical bear market
As for technical analysis, only US stocks are in a technical bear market, with the S&P 500 falling more than 20% from its historic high of 6147, while the S&P 500 index in the short term refers to 4917 as the break-even line. Hong Kong stocks hit a record trading record fall, and many blue chips posted double-digit declines today, and short lines could even be more volatile in the Sino-US relationship. In addition to keeping an eye on US stocks $CBOE Volatility S&P 500 Index(.VIX.US)$ In addition, you can also keep an eye on Hong Kong stocks $HSI Volatility Index(800125.HK)$ As a reference.
Things to look out for in the latest market situation
Key Concerns About Bond Market Interest Rates
In addition to common stock market indices and volatility indices, the performance of the bond market is also an important indicator. In a strong sense of danger, $U.S. 10-Year Treasury Notes Yield(US10Y.BD)$ Fell through the 4 cm level. But one thing worth noting is that interest rates on short bonds are falling faster, as the market is anticipating a possible 4-5 rate cut in the US over the course of the year.
In terms of the latest rate futures, the chance of a rate cut on May 7 has risen to 52%, and on October 29, the chance of a 4 rate cut of 0.25 percentage points has reached 100%, and the chance of a 4- and 5-fold rate cut in 2025 is 62.3% and 37.7%, respectively. The overall rate decline is expected to accelerate, which undoubtedly reflects the increased risk of recession.
So for cattle with no investment direction at the moment, hand cash to wait for the opportunity and put the funds firstConfiguring short-term high interest rates on currency fundsIt is a more reasonable choice. The further increase in risk in the event of a high wind wave depends on the level of individual progress.
IN ADDITION, THE SPREAD ON JUNK BOND JUNK BONDS HAS BEEN TRENDING UPWARD THESE DAYS, AND WHETHER THE MARKET CONDITIONS WILL TRIGGER OTHER UNPLEASANT CHAIN EFFECTS WILL BE A GUIDING FACTOR IN INTENSIFYING NEGATIVE MARKET SENTIMENT IN THE SHORT TERM. The performance of the bond market is the focus.
Commodities Market Avoidance Enhancement
In the context of the global economy, it is also possible to refer to some of the main commodity futures statements offered in the Futubull APP as a reference indicator~$ Gold Mainstream (GcMain.us) $
Intense risk-averse sentiment, even gold prices cannot be spared. However, if there are signs that the decline in gold prices is slightly moderating, it can also be seen as a sign that the market is starting to let go. The short line can first refer to whether the $3000 barrier is holding steady. But operationally, it is not recommended for a chaotic rebound to increase the risk of holding positions for the time being.
$ Copper Mainline (HgMain.us) $
Copper has been dragged on by the tariff news earlier this year, but has evaporated most of the gains recently. In the short term, copper is likely to be a more sensitive asset if Trump's tariffs change. Be careful, however, that in the short term, it is difficult to judge that the situation is bad based on price rises alone. After all, copper demand and the global economy are extremely sensitive, depending on whether the subsequent rise in copper prices is due to a change in demand or supply side messages.
$WTI Crude Oil Major (CLMain.us) $
Compared to copper prices, oil prices will be more sensitive to the performance of the global economy. If the momentum of future oil price declines continues, it will reflect an unanticipated improvement in the market's risk appetite, and investors may need to be more cautious even if there is a technical rebound in the stock market.
A little summary about the stock market
Here are a few shares and views on the current market situation:
The way to profit from the recent market is to leave without “disaster money”, which is not an investment opinion.
The short-term volatility will be very high, but watch for fluctuations in volatility from leaders of various countries about the trade war.
Increasing cash or options hedging is an ideal way to combat risk in the short term; in the long run, it is a measure of the likelihood of an economic downturn.
History is used to be broken, and don't be embarrassed to use historical data as a prediction.
Lessons are constantly learned from investment mistakes. The investment is a marathon ~ “Leave the castle there, let alone no shiyaki”.
Author: Chief Analyst of Chili Lok Futu Securities
(The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the Proposed Share Issuer)
