Understanding the Market | Non-ferrous Stocks Strengthened, Powell's Dovish Speech Reinforces Rate Cut Expectations, Metals Expected to Welcome a New Cycle of Prosperity
Non-ferrous stocks strengthened today, with Ganfeng Lithium up 8.12%, Jiangxi Copper up 4.88%, and ZHAOJIN MINING up 4.23%. Federal Reserve Chairman Powell's dovish speech has reinforced market expectations of a rate cut, with metals poised for a new round of economic cycle. Institutions predict that US June CPI will fall to 3.1%, supporting the rise in precious metal prices. Zhongtai Securities believes that the global manufacturing recovery cycle will continue, and basic metals will enter an economic cycle. Copper and aluminum are favored investment targets
According to the Wise Finance app, non-ferrous metal stocks strengthened today. As of the time of publication, Ganfeng Lithium (01772) rose by 8.12% to HKD 17.04; Jiangxi Copper (00358) rose by 4.88% to HKD 16.34; Zhaojin Mining (01818) rose by 4.23% to HKD 15.28; Luoyang Molybdenum (03993) rose by 3.46% to HKD 7.77; and China Hongqiao (01378) rose by 1.4% to HKD 11.6.
On the news front, Federal Reserve Chairman Powell once again took a dovish stance. Powell testified before Congress, mentioning that the Fed does not need to wait for inflation to drop below 2% to cut interest rates. This is the most explicit statement he has made about rate cuts, fueling market expectations for a rate cut in September. In addition, institutions predict that the overall CPI year-on-year rate in the U.S. will fall from 3.3% to 3.1% in June, with a slight increase in the monthly rate to 0.1%; core CPI year-on-year and monthly rates are expected to remain at 3.4% and 0.2% respectively.
Zhongtai Securities pointed out that the overall U.S. economic data is declining, reigniting expectations for a rate cut and supporting the rise in precious metal prices. In terms of bulk metals, the off-season effect continues this week, downstream new orders remain weak, social inventory digestion fluctuates, but in the long-term tight balance situation, the recovery of financial attributes drives the overall sector prices higher. In the medium term, the global manufacturing recovery cycle is expected to continue, and under supply constraints, basic metals will usher in a new cycle of prosperity, especially copper and aluminum. The bank is optimistic about the investment performance of bulk sectors in 2024