The direct impact of this increase in refined oil prices on the CPI is very limited. The increase is only about 0.4 percentage points higher than the previous month. It can be completely offset by the decline in food prices. The indirect impact depends on the PPI's transmission of CPI. This is not a big problem. First, although the direct impact of this adjustment on the PPI is relatively large, it is estimated that it will be around 1%, and its rising trend may seem difficult to stop, but we think this is not terrible. Currently it includes China. The countries in the world have already begun to work together to solve energy problems. In the third quarter of last year, the sharp rise in oil prices naturally slowed down in the second half of this year, which greatly reduced the upward pressure on domestic PPIs, and this pressure on CPI transmission is also natural. The second is that the government can minimize the pressure of PPI transmission to CPI.
Therefore, the current price adjustment will not worsen the current inflation situation. On the contrary, in the medium to long term, China will reduce energy consumption due to price adjustments. This is conducive to reducing China’s economic and inflation risks. In fact, after the news comes out, The international market also responded positively to this. International oil prices fell sharply on June 19, and the New York oil market closed below its previous high of US$132 a barrel.
At the same time, this is also positive for the stock market. First, due to price adjustments, the earnings per share of Sinopec and PetroChina will increase by 0.1 yuan and 0.04 yuan, respectively, which will help boost the two major heavyweights, thus stabilizing the weakness to some extent. Market. More importantly, this measure of the government is beneficial to reducing the risk of inflation in China in the long run. Inflation risk is an important factor that restricts the rise of the stock market. For instance, every time when the news of international crude oil innovation is high, it will make the Chinese stock market. "Playing a child."
In addition, this measure also shows that the government will gradually liberalize the current price control, and we know that price control is precisely the cause of China's economic ups and downs (such as 1992-1993), but also lead to abnormal growth of listed company profits As a result, the valuation system is disrupted, making it difficult for a stable institutional investor to do more important factors.
Therefore, the current price adjustment will not worsen the current inflation situation. On the contrary, in the medium to long term, China will reduce energy consumption due to price adjustments. This is conducive to reducing China’s economic and inflation risks. In fact, after the news comes out, The international market also responded positively to this. International oil prices fell sharply on June 19, and the New York oil market closed below its previous high of US$132 a barrel.
At the same time, this is also positive for the stock market. First, due to price adjustments, the earnings per share of Sinopec and PetroChina will increase by 0.1 yuan and 0.04 yuan, respectively, which will help boost the two major heavyweights, thus stabilizing the weakness to some extent. Market. More importantly, this measure of the government is beneficial to reducing the risk of inflation in China in the long run. Inflation risk is an important factor that restricts the rise of the stock market. For instance, every time when the news of international crude oil innovation is high, it will make the Chinese stock market. "Playing a child."
In addition, this measure also shows that the government will gradually liberalize the current price control, and we know that price control is precisely the cause of China's economic ups and downs (such as 1992-1993), but also lead to abnormal growth of listed company profits As a result, the valuation system is disrupted, making it difficult for a stable institutional investor to do more important factors.
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