Market Review
Focus News
Chinese Market
1. The Ministry of Finance Pre-allocates Some of the Additional Local Government Debt Quota for 2024
Since the beginning of this year, under complex domestic and international circumstances, the Ministry of Finance has intensified and enhanced the implementation of a proactive fiscal policy. The budget execution status was relatively good for the first three quarters, robustly supporting key expenditures, thereby providing strong backing for the sustained recovery and high-quality development of the economy.
2. More International Institutions Opt for “Abandoning Japan for A-Shares”
With global economic policy adjustments, investment trends are shifting, and an increasing number of international institutions are starting to “Abandon Japan for A-shares.” Media reports highlighted that Japanese stocks, facing a growing number of adverse factors such as a worsening global economic growth and concerns over the Bank of Japan facing pressure to tighten monetary policies, may see the end of the era of a weak yen bolstering exporters' profits. Conversely, it is increasingly believed that China’s efforts to boost the economy and A-shares will help end the sluggish market trend of A-shares this year, and historically low valuations will attract bottom-fishers.
3. The China Securities Regulatory Commission Seeks Public Opinions on Amendment of “Risk Control Index Calculation Standards for Securities Companies”
To implement the spirit of the Central Financial Work Conference, comprehensively strengthen institutional regulation, further improve the risk control index system for securities companies, promote the implementation of comprehensive risk management requirements, enhance investment banking service capabilities, improve the quality of services to the real economy, and promote high-quality development of industry institutions, the CSRC has revised the “Risk Control Index Calculation Standards for Securities Companies” (hereinafter referred to as “The Calculation Standards”) based on the relevant provisions of the “Risk Control Indices Management Measures for Securities Companies” (CSRC Order No. 166), and is now seeking public opinions.
Overseas Markets
1. Israel Completely Surrounds Gaza
Israel carried out a “significant and expanded” operation in the Hamas-led Gaza Strip, said Navy spokesperson Rear Admiral Daniel Hagari, completely surrounding Gaza City and attacking targets above and below ground. Hagari also noted that humanitarian corridors remain open to allow residents to flee. Photographs from the Hamas-controlled coastal strip show people walking south, their belongings piled high and pulled by donkey carts.
2. U.S. Job Market Cools More Than Expected
Affected by the automobile industry strike, the increase in U.S. non-farm employment in October cooled more than expected, and the unemployment rate rose to its highest point since January 2022, signaling the job market is beginning to cool. According to the latest data from the U.S. Department of Labor, non-farm employment increased by 150,000 in October, only half of September’s job growth, marking the second lowest job growth since the beginning of 2022. Additionally, job growth in August was revised down from 227,000 to 165,000, and job growth in September was adjusted from 336,000 to 297,000.
3. South Korea to Temporarily Ban Short Selling Until June 2024
According to Korea International Broadcasting Station (KBS), the South Korean government will completely ban short selling in the stock market until the first half of next year and push for an improvement in related systems. The report pointed out that the Korea Financial Commission believes that due to the recent slowdown in global economic growth momentum among others, the uncertainty in the South Korean economy is increasing. However, concerns over the fair pricing of the domestic stock market due to foreign illegal, unleveraged short selling are growing. Short selling is an investment behavior in which stocks or bonds are borrowed and sold without ownership, and then repaid by buying back the stocks or bonds, aiming for profit from expected price declines.
4. The United States Expands Sanctions on Iranian Oil
In early October, at the onset of the latest Israel-Gaza conflict, although Iran denied involvement, former House Speaker McCarthy still stated that the United States should impose stricter sanctions on Iranian oil. According to The Hill, the U.S. House of Representatives passed a bill by 342 votes to 69, aimed at punishing entities involved in Iranian oil trade.
Today's Focus
This week, investors need to pay attention to Germany's industrial output, CPI, the Eurozone Sentix investor confidence index, retail sales, trade balances of China, the United States, France, and Canada, U.S. API and EIA crude oil inventories, initial jobless claims, the University of Michigan's consumer sentiment index, and other economic data. In addition, investors should also closely monitor the Israel-Gaza situation, speeches by Federal Reserve officials Williams and Logan, and the Reserve Bank of Australia's interest rate meeting among other risk events.
