Market Review
Top News
Chinese Market
1. Four trillion-yuan cities cancel purchase restrictions
Several cities continue to relax real estate market policies, with two provincial capitals announcing new housing policies. Wuhan cancelled the purchase restriction policy within the Second Ring Road, Xi'an cancelled purchase restrictions in areas outside the Second Ring Road, Wuxi removed purchase restrictions across the whole city, and Qingdao implemented a “property-not-loan” policy. The GDP of these four cities exceeded one trillion yuan in 2022. Previously, Hefei, Zhengzhou, Nanjing, Zhengzhou, and Dalian had already announced the complete lifting of purchase and sale restrictions.
2. Shanghai accelerates the layout of key infrastructure
The Shanghai Municipal Finance and Economics Committee pointed out the need to take vigorous measures to stabilize growth, focusing on maintaining the scale and optimizing the structure of foreign trade, promoting the development of emerging trade markets and new types of trade entities, increasing promotion of the Import Expo, expanding imports of high-quality goods and services, and supporting companies to explore global markets. The role of new infrastructure in leading investment will be leveraged, with accelerated planning in areas such as blockchain, the industrial internet, computing power, robotics, and vehicle networking, which are crucial for the future.
3. Bank executives increase holdings of their own stocks
Entering September, listed banks have intensively released information about shareholders and executives increasing their holdings. In less than 20 days, in addition to Xi'an Bank, Jiangsu Bank, Qilu Bank, and Shanghai Bank also released news of executives or shareholders increasing their holdings. Market participants believe that with a series of recent stimulus policies aimed at stabilizing growth being introduced and gradually implemented, market expectations and credit demand are expected to be boosted, marginally improved, and the economic recovery momentum will gradually strengthen, showing a positive foundation for the banking sector.
4. Sunac China files for bankruptcy protection in the US
The recent succession of policy benefits is gradually pushing the real estate market towards stable repair, accelerating the debt resolution process for housing companies. Sunac China has applied for Chapter 15 recognition in a US court for its USD bond restructuring, to gain US court approval for the company's reorganization agreement in Hong Kong courts. According to incomplete statistics, previously, several real estate companies, including Kaisa Group, Modern Land, Rongsheng Development, as well as companies from other industries such as Luckin Coffee, Huachen Electric Power, and GCL New Energy, have received Chapter 15 recognition during their USD bond restructuring process.
Overseas Market
1. US debt surpasses $33 trillion for the first time
According to data from the US Treasury Department, the total US debt has surpassed $33 trillion for the first time, with an increase of $56 billion in just one day and an increase of $1 trillion over the past three months. According to data from the Federal Reserve Bank of St. Louis, the US federal government's interest payments have exceeded $900 billion for the first time in history in the second quarter of this year, possibly reaching more than $1 trillion in a quarter. However, US Treasury Secretary Yellen stated that the US debt remains at a "manageable level".
2. Yellen says Japan's intervention in the yen is "understandable"
Earlier this month, Japanese authorities issued their strongest warnings in weeks about the sharp fluctuations in exchange rates, signaling a stronger intent to intervene if the yen continues to weaken. The Japanese Finance Ministry's Vice Minister Masato Kanda stated that excessive fluctuations in the yen are undesirable, and Japan would not rule out any options if necessary. US Treasury Secretary Yellen stated that if Japan's intervention in the yen is aimed at stabilizing exchange rate fluctuations rather than influencing exchange rate levels, then such actions are understandable.
3. OECD lowers global GDP forecast for next year
The OECD noted that due to the stronger than expected US economy, it has revised the global GDP forecast for 2023 from 2.7% to 3.0%, with Germany expected to be the only major economy to fall into recession this year. The OECD stated that despite the general inflation in many countries continuing to decline in the first half of 2023, driven by the drop in food and energy prices, it is "too early to declare victory".
4. Hedge funds massively short semiconductor stocks
As the hype around artificial intelligence (AI) continues to wane, the attractiveness of AI-related stocks has steadily declined, with retail investors' net purchases of AI-related stocks decreasing. According to Goldman Sachs PE data, in the recent weak stock price environment, hedge funds have significantly sold semiconductor industry stocks. Specifically, since reaching this year's high in early July, the ratio of long to short positions in the semiconductor and semiconductor equipment stocks recorded in Goldman Sachs PE's book has fallen to 1.12, a record low ratio of 0.75 at the beginning of the year.
Focus Today
Today, investors should pay attention to Japan's August trade balance, China's one-year and five-year loan market quote rates, the UK's August CPI and core CPI, and the US EIA crude oil inventory among other important economic data. In addition, investors should also look out for the State Council policy routine press conference held by China's State Council Information Office, and the speech by ECB Executive Board Member Elderson among other risk events.
