"US Stocks Down, Chinese ADRs Rise; Goldman, Morgan Predict 15% A-Share Gain"
Pre-market News Summary
Macro:
The State Council Information Office will hold a press conference at 10 a.m. today to introduce the implementation of a package of incremental policies to solidly promote an upward economic structure, an optimal development trend, and a sustained positive development momentum.
Federal Reserve's Kashkari stated that the labor market still appears strong and hopes to maintain it; he has high confidence in inflation returning to the 2% target.
International oil prices surged across the board, with the November U.S. oil contract up 3.91%,报价 at $77.29 per barrel. The December Brent oil contract rose 3.82%,报价 at $81.03 per barrel. International precious metal futures generally closed lower, with COMEX gold futures down 0.22% to $2661.9 per ounce, and COMEX silver futures down 1.4% to $31.94 per ounce.
Foreign capital is bullish on Chinese assets. Goldman Sachs upgraded Chinese stocks to "overweight," expecting a further increase of 15-20%; Morgan Stanley: Under the impetus of fiscal measures, Chinese stocks may rise by another 15%.
Due to the strong U.S. non-farm employment data in September, the yield on the 10-year U.S. Treasury bond broke through 4%, suppressing stock market performance. The three major U.S. stock indexes closed lower collectively, with the Dow Jones down 0.94%, the Nasdaq down 1.18%, and the S&P 500 down 0.96%. Advanced Micro Devices closed up 16%, marking the largest single-day gain since May 15. Chinese concept stocks reversed the market with a deep V, and the NASDAQ Golden Dragon China Index closed up 0.07%.
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Industry:
Recently, many securities firms such as CITIC Securities, Huatai Securities, CITIC Construction Investment, and Northeast Securities have issued notices to customers regarding the third-party transfer arrangements on October 8. Some cooperative banks can advance the third-party transfer time, with specific advance times varying.
The wealth effect brought by the stock market surge before the holiday has been preliminarily transformed into consumption momentum. According to data from the Ministry of Transport, from October 1-4, the cross-regional personnel flow in society was 1.18 billion person-times, up 2.9% compared to 23 years ago, and up 20.1% compared to 19 years ago. Among them: 1) Railway passenger volume was 74.84 million person-times, up 7.0% compared to 23 years ago, and up 27.2% compared to 19 years ago; 2) Road personnel flow was 1.09 billion person-times, up 2.5% compared to 23 years ago, and up 22.1% compared to 19 years ago; 3) Waterway passenger volume was 6.1 million person-times, up 25.4% compared to 23 years ago, and down 29.6% compared to 19 years ago; 4) Civil aviation passenger volume was 9.09 million person-times, up 13.0% compared to 23 years ago, and up 22.6% compared to 19 years ago.According to Meituan data, during the "Eleventh" holiday, the national scale of consumption for life services at physical stores increased by 41.2% year-on-year, with Shanghai, Beijing, Chengdu, Shenzhen, and Chongqing ranking in the top five in terms of consumption scale nationwide. Among them, the average daily consumption scale of tourists increased by 69.6% compared to the previous year's holiday. The average daily consumption of dine-in catering during the first five days of the "Eleventh" holiday increased by 33.4% compared to the 2023 National Day holiday. Looking at the consumption periods, nighttime consumption increased by 44.8 percentage points compared to the 2023 holiday.
China's gold reserves in September were reported at 72.8 million ounces (approximately 22,643.3 tons), unchanged from August, and have remained constant for five consecutive months.
Companies:
NVIDIA CEO Huang Renxun recently stated that the demand for the company's next-generation AI chip, BlacKweLL, is "insane."
II. Forward-looking
10.9 - China's August financial data
10.10 - U.S. September CPI, U.S. initial jobless claims for the week ending October 5
10.11 - U.S. September PPI
III. Public opinion hotspots
① Data elements/Cybersecurity: Data elements and security receive another important policy signal, as the Premier of the State Council announces the "Regulations on Network Data Security Management," which will come into effect on January 1, 2025.② Major Finance - The Shanghai Stock Exchange adjusts the designated trading declaration instruction time. Private equity insiders: To avoid trading congestion and reduce the pressure of instantaneous data reception. Pan Gongsheng, the first phase of mutual convenience for securities, funds, and insurance companies is 500 billion, and the funds obtained can only be used for investment in the stock market.
③ Real Estate Chain - The pre-holiday Politburo meeting pointed out that it is necessary to promote the real estate market to stop falling and stabilize. For the construction of commercial housing, it is necessary to strictly control the increase, optimize the stock, and improve the quality. During the holiday, first-tier cities such as Shanghai and Guangzhou have further relaxed and optimized the purchase restriction conditions.
④ Semiconductors - During the holiday, the semiconductor sector of the Hong Kong stock market soared.
⑤ Huawei HarmonyOS - The native HarmonyOS system started public testing on October 8th; the first batch of compatible Mate 60 / X5 series phones, MatePad Pro 13.2-inch series tablets; Huawei HarmonyOS NEXT system supports the application cloning feature. After actual testing, the system can open up to 6 identical applications, each of which can be used separately.
⑥ Autonomous Driving/Tesla - Tesla will release a taxi without drivers after the holiday on October 10th, with wireless charging being the biggest highlight; Guotai Junan: Tesla FSD is expected to enter China, accelerating the development of the intelligent driving industry.
IV. Hotspot Research Reports and Minutes
1. Chen Guo of CITIC Construction Investment - "The Future I Look Toward: The 'Three-Step Argument' of Confidence Reassessment Bull"
I believe that the bull market in the capital market is actually a reflection of the economic endeavors of the entire country.
Recently, when I was observing the evolution of the bull market in various places, there were similar "lifting - consolidation - summiting" three stages, which made me involuntarily think about the summary of the Qing Dynasty scholar Wang Guowei, that those who have achieved great undertakings and great learning in ancient and modern times must go through a clear realm. (Once again, I sigh that Chinese culture has many evergreen essences)
In my view, this bull market reflects our determination to break deflation and end the expectation of a decline in the balance sheet, and I expect this bull market to go through these three stages similarly:"Confidence Reassessment Bull" First Paragraph: "Last night the west wind withered the green trees, alone I ascended the high building, gazing to the end is the road to the horizon." This roughly refers to the problems that the Chinese economy is currently facing, which have been accumulated over decades of development, and future challenges such as demographic cycles are also on the horizon. At this stage, deflation makes many people feel inescapable, even leading to despair and loss of ambition, and this low confidence itself affects economic activities. The pricing in the capital market is also a reflection to some extent. Deflation and locked expectations may be the first step. Therefore, the recent act of looking far into the distance with high aspirations and clear goals to boost morale is a very critical first step. Once the market is inspired by this, the first phase of the bull market will unfold, which is often the easiest part of the bull market to make money, almost like picking up money in the stock market, essentially a universal rise in the index level. Expectations and situational thinking are formed quickly, thus the first phase often does not last long. Overall, we have already proposed the second half of this first phase.
"Confidence Reassessment Bull" Second Paragraph: "The belt gradually widens but never regrets, for her sake one becomes haggard." Having lofty goals is relatively easy, but truly great endeavors inevitably go through hardships and difficulties. It's not about ending debt deflation quickly and seeing results, there will be continuous difficulties and resistance points in between. So the first phase is just an expectation, and by the second phase, some people will give up, believing that success will not be achieved in the end. After all, whether the fundamentals can really improve, whether they can really overcome and reduce, these dreamlike visions cannot be confirmed, only by steadfastly and comprehensively advancing the work. This second phase is often a stage of fluctuation in the bull market, generally the index will no longer rise rapidly, showing a tendency to fluctuate, and it is also a difficult phase to make money. It is a stage where investors' performance soars, some investors may incur losses, and it is also a stage that is prone to wavering and观望 emotions.
Third Paragraph: "Searching for him among the crowd for thousands of times, suddenly looking back, that person is in the dimly lit place." This period is one of continuous effort, suddenly seeing the dawn, meditating and confirming the path to success, a success that is even dizzying: really succeeded! So many difficulties and challenges have been overcome by us! I think, once the victory in this battle against deflationary compression is really confirmed, it will make the world take a fresh look, the Chinese people will be more confident in the great rejuvenation of the nation, and the country's economic development will enter a new stage. Against this backdrop, the "Confidence Reassessment Bull" will truly achieve success, and we look forward to meeting again at that time.
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