Next week's heavy schedule: All eyes on A-shares opening, everyone eagerly awaits Chinese policies

A summary of major financial events from October 7th to October 13th, all in Beijing time:

Key points to focus on this week: A-share market opens after the National Day holiday, the State Council Information Office holds a press conference, China's September CPI, PPI, financial, and forex data, as well as the US September CPI and PPI data.

In addition, JP Morgan leads the banking sector in releasing Q3 financial reports, Tesla will officially launch Robotaxi, and Israel may launch an attack to escalate the situation in the Middle East.

A-share Market Welcomes a "Good Start" After the National Day Holiday?

Boosted by a combination of policies, Chinese assets have been "snapped up" recently, and the A-share market will open for trading on Tuesday (October 8th) after the National Day holiday.

During the National Day holiday when the A-share market was closed, Chinese assets continued to perform well, opening up room for imagination for the A-share market after the holiday.

As of October 4th, the Hong Kong stock market had a total turnover of 41.963 billion Hong Kong dollars over three trading days. On the 4th, the Hang Seng Index turned upwards during the trading session, sharply rose towards the end of the day, breaking through the high of 22,700 at the beginning of last year, refreshing a two-and-a-half-year high. The Nasdaq China Golden Dragon Index has risen by 11.85% this week, recording gains for the fourth consecutive week.

CITIC Securities believes that with the introduction of a combination of financial policies, the A-share market has staged a "miracle in 5 days", and market sentiment quickly moved out of the panic zone, entering the excitement zone in just 5 trading days. Currently, the market sentiment has returned to a high level after 3 years and an excited state after 4 years. The heightened investor sentiment indicates that the A-share market has entered a new stage.

According to reports, the Shanghai and Shenzhen stock exchanges conducted routine network-wide testing today after the holiday.

State Council Information Office Holds Press Conference, NDRC Explains Economic Hotspots

The State Council Information Office announced today that on October 8, 2024 (Tuesday) at 10:00 am, a press conference will be held to introduce the "systematic implementation of a package of incremental policies, solidly promote the improvement of economic structure and development momentum, and continue to improve the situation." Director Zheng Zhajie and Deputy Directors Liu Sushe, Zhao Chenxin, Li Chunlin, and Zheng Bei will explain the relevant situation and answer questions from reporters.

China's September Financial, Inflation, and Forex Data

From October 9th to 15th, the National Bureau of Statistics, the People's Bank of China, and the State Administration of Foreign Exchange will successively release September inflation, financial, and forex data.

China's September CPI, PPI Data

Inflation data released last month showed that China's CPI in August rose by 0.6% year-on-year, hitting a new high for the year, with the previous value at 0.5%. On a month-on-month basis, it rose by 0.4%, slightly lower than the previous 0.5% increaseCompared year-on-year, prices of the seven major categories saw five increases, one stabilization, and one decrease, with vegetable prices rising by 21.8% and pork prices rising by 16.1%.

The national PPI fell by 1.8% year-on-year, with a deeper decline compared to the previous value of -0.8%, and a month-on-month decrease of 0.7%, compared to the previous value of -0.2%. The National Bureau of Statistics interpreted that the decline in prices of energy-intensive industries was the main reason for the month-on-month decline in PPI.

Galaxy Macro Analysis pointed out that in the second half of the year, overall pork prices will trend upwards, but the probability of a significant increase is small. At the same time, insufficient release of consumption momentum and the low PPI will exert certain pressure on the moderate upward trend of core CPI. The lack of upward momentum in PPI throughout the year is expected to push the year-on-year central value of PPI down to below -2% in the fourth quarter, while CPI is expected to maintain a moderate upward trend throughout the year, mainly due to the improvement in base effects, with the year-on-year central value of CPI expected to rise to around 1% in the fourth quarter.

China's financial data for September, including new RMB loans and social financing

Supported by government credit, China's new RMB loans and new social financing in August both saw significant rebounds. The "squeezing water out of the financial system" effect continues, M1 money supply continues to decline, and the negative scissor difference between M1 and M2 growth rates further widens.

Guojun Macro Analysis stated that the data characteristics of credit structure in August did not show significant changes compared to July, and the pattern of private sector "balance sheet contraction" transmission remains unchanged.

Guojun Macro Analysis indicated that the trend of residents repaying loans ahead of schedule is showing a "downgrade" trend, reflected in a significant decrease in the early repayment rate of personal housing loans, while the early repayment rate of car loans remains high. The motivation of residents to repair their balance sheets has not weakened; the relationship between the motivation and ability of residents to contract their balance sheets needs to be reasonably distinguished.

China's foreign exchange reserve data for September

Affected by factors such as exchange rate conversion and changes in asset prices, China's foreign exchange reserves continued to rise in August, marking the second consecutive month of increase, although the month-on-month growth rate has slightly declined. The People's Bank of China has suspended increasing its gold holdings for the fourth consecutive month.

On the evening of September 6th, the World Gold Council released a report stating that in August, global gold ETFs saw inflows for the fourth consecutive month. In the Asian region, the Chinese market's gold ETFs experienced net outflows, ending its eight-month streak of net inflows.

The World Gold Council stated that overall, the global gold market trading remains active, with the daily average trading volume in the global gold market reaching $241 billion, a slight month-on-month decrease of 3.2%.

US CPI inflation data for September

On Thursday (October 10th), the US Bureau of Labor Statistics released the September CPI data.

The data released last month showed that in August, CPI rose by 2.5% year-on-year, and the core CPI unexpectedly increased to 0.3% month-on-month, marking the largest increase in four monthsDue to the September non-farm data greatly exceeding expectations, more signals of an economic "soft landing" have been released, causing market expectations for interest rate cuts within the year to significantly converge. CPI data will reveal the latest effectiveness of the Federal Reserve's anti-inflation efforts.

After the non-farm data was released, traders canceled their bets on a 50 basis point rate cut in November, with expectations for the Fed's rate cuts over the next four meetings falling to less than 100 basis points; Bank of America and J.P. Morgan also revised down their expected rate cut in November from 50 basis points to 25 basis points.

Ian Lyngen, head of U.S. rate strategy at BMO Capital Markets, pointed out that if inflation is proven to still be sticky while October non-farm data is relatively strong, the Federal Reserve may temporarily pause rate cuts.

Further Escalation in the Middle East Tension?

On the evening of October 1st, Iran launched over 180 ballistic missiles from its territory towards Israel, triggering alarms in Jerusalem and prompting Israel's air defense system to be fully activated.

According to Global Times, on October 4th local time, a senior U.S. State Department official stated that Israel did not assure the Biden administration that it would not launch retaliatory strikes against Iran's nuclear facilities. The official added that it is difficult to determine whether Israel will launch retaliatory strikes on October 7th, the one-year anniversary of the Palestinian Islamic Resistance Movement (Hamas) launching a large-scale attack on Israel.

As the situation in the Middle East escalates, multiple countries have announced temporary closures of their airspace. During a briefing on the 4th, U.S. President Biden mentioned that if he were in Israel's position, he would consider alternative options to attacking oil fields. Biden also stated that Israel "will not make an immediate decision."

Tesla Officially Launches Robotaxi

On Thursday (October 10th), Tesla plans to officially launch Robotaxi.

Historically, significant new product events by Tesla have led to substantial stock price fluctuations. In the days following the debut of the Model 3 in March 2016, Tesla's stock price rose by 12%; however, after the humanoid robot Optimus was officially unveiled at AI Day in 2022, Tesla's stock price dropped by 16% in a few days.

It can be said that Tesla's stock price performance thereafter will depend on Elon Musk's performance on Robotaxi Day on October 10th.

To meet market expectations, Tesla needs to ensure that physical Robotaxis are deployed and plan to introduce unsupervised services by at least 2026, while also explaining to investors how Tesla will commercialize autonomous driving taxi services.

Some analysts point out that while Robotaxi Day may seem like a technology launch event, Musk needs to convince investors during this event that Tesla is a "tech company" rather than just an "automaker."Apart from Robotaxi itself, investors are also concerned about whether Tesla will launch a more affordable new model, Model 2, in this event.

Other Important Data, Meetings, and Events

A new round of domestic refined oil price adjustments will start at 12:00 on the night of October 10th.

The market expects that due to the rise in international oil prices, domestic refined oil prices in October may face upward pressure.

Since the beginning of this year, China's refined oil prices have experienced 18 price adjustment windows, including 7 increases, 8 decreases, and 4 suspensions. After offsetting the increases and decreases, the prices of gasoline and diesel in China have been reduced by 215 yuan and 205 yuan per ton respectively compared to the end of last year, equivalent to an increase of 0.17 yuan, 0.18 yuan, and 0.17 yuan per liter for 92 octane gasoline, 95 octane gasoline, and 0 diesel.

On Friday (October 11th), the largest U.S. bank, JP Morgan, will be the first to release its latest Q3 financial report.

The previous quarter's financial report showed that JP Morgan set a record for the highest quarterly profit in the history of the U.S. banking industry in Q2, with a net profit of $13.1 billion, or $4.26 per share, after excluding income related to the Visa transaction. Analysts had expected $4.26 per share. The Visa transaction contributed about $8 billion to the bank's profit in Q2.

On the same day, the largest U.S. asset management company, BlackRock, will also announce its latest performance. Boosted by ETF inflows and stock market gains in the previous quarter, BlackRock's AUM reached a record $10.65 trillion, a 13% year-on-year increase, higher than the expected $10.2 trillion.

In terms of earnings, BlackRock's adjusted earnings per share increased by 12% year-on-year to $10.36, exceeding the market's general expectation of $9.96; revenue increased by 8% year-on-year to $4.8 billion.

IPO Opportunities

There is 1 new stock available for subscription in the A-share market this week (October 7th to October 11th).

A total of 27 new funds (combined statistics for A-class and C-class) were issued this week, including 6 bond funds, 4 hybrid funds, 0 stock funds, 14 index funds, and 3 REITs.