Market Review
Key News
China Market
1. Real Estate Investment Drags Down Further
From January to October, the national real estate development investment continued to decline, with both the construction area and the area of commercial housing sales experiencing an increased rate of decline. The real estate development prosperity index dropped for the sixth consecutive month in October. According to data released by the National Bureau of Statistics, from January to October, the national real estate development investment amounted to 959.22 billion yuan, a year-on-year decrease of 9.3% (calculated on a comparable basis), with the decline expanding from January to September. Within this, residential investment was 727.99 billion yuan, down 8.8%, with the rate of decline similarly expanding. From January to October, the area of commercial housing sales was 925.79 million square meters, a year-on-year decrease of 7.8%, including a 6.8% decrease in residential sales area. The sales volume of commercial housing was 971.61 billion yuan, down 4.9%, with residential sales volume decreasing by 3.7%.
2. SAFE Promotes Equity Investment Fund Cross-border Investment Pilot Prudently
The Capital Account Management Department of the State Administration of Foreign Exchange (SAFE) published an article pointing out that it will continue to steadily expand the systemic opening in the foreign exchange field. Focusing on improving the quality of opening up in capital projects, the next steps include promoting overseas listings, overseas institutional investors investing in domestic securities markets, revising regulations, and prudently advancing the pilot program for cross-border investment of equity investment funds, in order to attract more foreign financial institutions and long-term capital to develop and thrive in China.
3. SSE Chairman Qiu Yong Says A-share Market is in a Valuation Trough
The 2023 Shanghai Stock Exchange (SSE) International Investors Conference, themed "Building a New Development Pattern, Promoting High-quality Development," was held. Qiu Yong, Chairman of the SSE, stated in his speech that the investment value of the capital market is increasingly prominent. As of the end of October 2023, the rolling price-to-earnings ratio of the SSE Composite Index was 12.6 times. Compared with overseas markets, the A-share market is in a valuation trough and has attractiveness on a global scale.
Overseas Market
1. US October PPI Increase Slows Beyond Expectations
Following the cooler-than-expected US CPI, the increase in the US PPI also slowed down more than expected, further confirming that the Federal Reserve's cycle of interest rate hikes has ended. According to data from the US Department of Labor, influenced by falling gasoline prices, the US PPI in October significantly slowed year-on-year to 1.3%, far below the expected 1.9%; the month-on-month PPI turned to a decrease of 0.5%, marking the largest decline since April 2020, far less than the expected month-on-month increase of 0.1%. Excluding the more volatile food and energy, the core PPI in the US also significantly slowed from 2.7% last month to 2.4% in October, the smallest rise since early 2021, against expectations of 2.7%.
2. US October Retail Sales Stronger Than Expected
The decline in retail spending in October could be an early sign of an economic slowdown, with US consumers being squeezed by rising borrowing costs, but last month's retail performance was better than economists' general expectations. According to data from the US Department of Commerce, US retail sales in October fell 0.1% month-on-month, the first decline since March this year, significantly decelerating from the revised value of 0.9%, but the decrease was smaller than economists had expected of 0.3%. Institutions stated that a strong labor market, positive income trends, and eased price pressures should temporarily maintain positive spending and economic growth.
3. UK October CPI Hits a Two-Year Low
Due to easing energy prices, the UK's inflation level in October slowed down more than expected, with Prime Minister Sunak achieving the "halving inflation" goal. Data released by the UK's National Statistics Office showed that the UK's inflation level in October significantly dropped to 4.6%, the lowest since November 2021. Aside from the significant slowing of energy prices, the inflation level of food and non-alcoholic beverages also fell to the lowest since June 2022. Excluding the more volatile food, energy, etc., the core CPI dropped from 6.1% last month to 5.7% in October, with CPI for housing and household services experiencing the largest year-on-year decrease, marking the lowest since January 1950.
4. Soros' Ally Druckenmiller Leads in Cutting Nvidia Holdings
Billionaire, legendary investor, and Soros' former comrade, Stanley Druckenmiller's family office, Duquesne Family Office, reduced its Nvidia holdings in the third quarter ending September 30. Specifically, Druckenmiller sold about 75,000 shares of Nvidia, worth approximately $37.2 million. As of September 30, Nvidia remained the largest holding of Druckenmiller's family office, with a market value of $380.5 million. Meanwhile, Soros Fund Management exited its investment in Nvidia during the third quarter, selling stocks worth $4.9 million.
Today's Focus
Today, investors need to pay attention to Japan's trade balance, Australia's labor market report, the US initial jobless claims and industrial output, among other economic data. Besides, investors should also closely monitor the Israel-Palestine situation, China's residential sales price monthly report for 70 major cities, speeches by the President of the European Central Bank Lagarde, and Federal Reserve officials Williams and Barr, among other risk events.
