Last week in the US, the three major indexes continued to rebound strongly, mainly due to the market see the sign of disinflation in the Consumer Price Index (CPI), Producer Price Index (PPI), and Import-Export Price Index reports for July. Total CPI was unchanged month-over-month and core CPI, which excludes food and energy, was up a smaller-than-expected 0.3%. Importantly, the annual pace of total CPI moderated to 8.5% from 9.1% while the annual pace of core CPI held steady at 5.9%, meaning it did not move higher as had been feared. This understanding triggered a huge upswing in the major indices, as investors relished the idea that inflation might have peaked, that the Fed might be able to temper the pace of its rate hikes, and that the U.S. economy, which learned last week that 528,000 positions had been added to nonfarm payrolls in July, might be able to enjoy a soft landing. For the week, The Dow rose 2.92%, the Nasdaq rose 3.08%, and the S&P 500 rose 3.26%. Technically speaking, coal, department store retail, automobiles, insurance, tourism, electrical equipment, etc. performed strongly, while a few sectors such as precious metals, software, and semiconductors were weak.
Last week, BTIG technical analyst, Jonathan Krinsky, informedCNBCthat "Since 1950 there has never been a bear market rally that exceeded the 50% retracement and then gone on to make new cycle lows." That doesn't mean it is off to the races from here nor does it mean the market is immune from another selloff of some size, but it does resonate for some as a beacon of identifiable downside risk and a reassuring historical precedent.
In the coming week, we will pay attention to the number of initial jobless claims in the United States, the Philadelphia Fed manufacturing index, and the minutes of the Fed's FOMC July monetary policy meeting.
In terms of A shares, the three major indexes rebounded. The Shanghai Composite Index rose 1.55% week-on-week, the Shenzhen Component Index rose 1.22% week-on-week, and the ChiNext Index rose 0.27% week-on-week. Oil and gas energy, aviation, coal, precious metals, games, finance and other sectors continued to strengthen, and sectors such as military industry, electronics, semiconductors, home appliances, photovoltaic equipment, batteries, and other sectors are volitale.
In terms of Hong Kong stocks, last week, Hong Kong stocks fell first and then rebounded gradually. The Hang Seng Index fell slightly by 0.13% on a weekly basis, the HSCEI fell by 0.65% on a weekly basis, and the Hang Seng Technology Index fell by 1.49% on a weekly basis. Credit, real estate, oil and gas equipment, non-ferrous metals, tourism and other sectors rose significantly, while concepts such as semiconductors, healthcare, processed food, and retail performed weakly. The accumulated net purchase of southbound funds was HK$2.439 billion. Li Ning, Sunny Optical, Xiaomi Group, Tencent, and Ideal Auto were the top pick.
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