Next week's heavy schedule: China's annual GDP, U.S. December inflation, intensive local two sessions, and the start of the U.S. stock earnings season

Overview of Major Financial Events from January 13 to January 17, all in Beijing Time:

Key focus for next week: China will release several important data, including December import and export figures, economic data, financial data, and annual GDP situation; local two sessions will be held intensively, and government work reports from various provinces will be disclosed successively; U.S. CPI and PPI inflation data, with attention to the impact on the Federal Reserve's interest rate cuts.

In addition, JP Morgan, Citigroup, and Goldman Sachs will kick off the U.S. stock earnings season, and TSMC will also release its earnings report. SpaceX's "Starship" program will conduct its seventh test flight, and the U.S. Supreme Court will announce the debate results on the TikTok ban case.

Several Major Data from China

• On Monday, China will announce December year-on-year import and export figures.

In November 2024, exports in U.S. dollar terms increased by 6.7% year-on-year, while imports decreased by 3.9% year-on-year. The compensatory exports after the typhoon raised the export base in October, while external demand remained stable. The pre-export effect has not yet become a dominant factor. The decline in imports has widened, which is attributed to weak domestic demand, and short-term factors cannot be ruled out.

Looking ahead to December exports, CICC expects a downward adjustment in the base, and while external demand may marginally decline, it remains overall stable, with December exports likely maintaining around 7% year-on-year. For 2025, in addition to a potential slowdown in overseas demand, attention should also be paid to potential trade risks.

• On Friday, China will release December economic data and annual GDP.

On Friday (January 17), the National Bureau of Statistics will announce economic data for December 2024, including industrial added value, fixed asset investment, and total retail sales of consumer goods.

CICC expects that the overall economic operation in December will remain stable, possibly continuing the "hot and cold" differentiation characteristic observed in November. This is mainly reflected in: areas directly related to policies (such as consumer goods replacement, real estate sales, and physical workload of infrastructure investment) still showing good growth momentum under phase-specific policy support; while areas strongly correlated with fundamentals, where current policies are difficult to directly reach (such as non-replacement consumption, prices, and real estate investment) continue to show weak operational trends. With the strengthened policy support since late September, the GDP growth rate in the fourth quarter may be 5.3% (annual GDP growth rate of 5%).

• From the 13th to the 15th, the central bank will intermittently announce December social financing, new RMB loans, and other financial data.

Last month's data showed that China's new social financing and RMB loans both rebounded in November, with a narrowing decline in M1, a slowdown in M2 growth, and a reduction in the negative scissors difference between M1 and M2 growth rates.

Looking ahead to December, Western Macro believes that local debt replacement will drive a stabilization and rebound in social financing growth. At the end of the month, bill rates rose sharply, reflecting a possible rebound in bill demand (Chart 15). However, local governments' replacement of implicit debts may repay part of the loans. It is expected that new loans in December will be 700 billion yuan, down from 1.1 trillion yuan in the same period last year. Driven by local debt replacement, the net issuance of government bonds in December is expected to be 1.5 trillion yuan, significantly higher than the same period last year. It is expected that social financing in December will be 2.2 trillion yuan, higher than 1.9 trillion yuan in the same period last year;The year-on-year growth of social financing stock increased by 8%, rebounding from a growth rate of 7.8% in November; M2 is expected to grow by 7.4% year-on-year, up from a growth rate of 7.1% in November.

Local Two Sessions Intensively Held

Starting from mid to late January, many places will enter the "Two Sessions" period, with local Two Sessions being held intensively. The government work reports of various provinces will be disclosed successively, becoming another important policy observation window following the Central Political Bureau meeting and the Central Economic Work Conference in December.

Among them, the third meeting of the 16th People's Congress of Shanghai will be held from January 15 to 18, and the third meeting of the 14th Committee of the Chinese People's Political Consultative Conference in Shanghai will be held on January 14, closing on January 17. The third meeting of the 14th Beijing Municipal Committee of the Chinese People's Political Consultative Conference will be held from January 13 to 17, and the third meeting of the 16th People's Congress of Beijing will be held on January 14. In addition, many places including Hebei, Fujian, Zhejiang, Hunan, Guangdong, Beijing, Shaanxi, Shanxi, Jiangxi, Henan, Yunnan, Guizhou, Jiangsu, and Ningxia will hold their Two Sessions next week.

Huachuang Securities stated that important information worth noting includes:

1. GDP growth target: Since 2018, the weighted GDP growth targets of various provinces have been about 0.5% higher than the national GDP growth target, which can be inferred based on local targets for the national level. 2) New urban employment: The national government work report will set annual new employment targets. The national target can be inferred by observing local targets.

2. CPI: It is possible to observe whether the CPI targets in provincial government reports have been adjusted. 4) Growth targets for retail sales and fixed asset investment: This year, several provinces have seen negative growth in investment or retail sales, and attention should be paid to the target setting and corresponding deployment for these provinces next year.

3. Stabilizing the real estate market: This year's central economic work deployment involves many aspects related to real estate, including "stabilizing the real estate and stock markets, continuously promoting the stabilization of the real estate market, strengthening the implementation of urban village and dilapidated housing renovation, revitalizing existing land and commercial properties, and advancing the disposal of existing commercial housing." Observing the deployment related to storage and urban village renovation in various places.

4. Industrial policy: Possible key directions include "cultivating future industries," such as low-altitude economy, artificial intelligence, etc.; "reducing carbon emissions and pollution while expanding greenery," including green buildings, new energy bases, zero-carbon parks, solid waste management, etc.; and comprehensive rectification of "involution-style" competition, etc.

U.S. CPI and PPI Inflation Data

Analysts believe that against the backdrop of a strong job market and a robust economy, underlying inflation in the U.S. may only slightly cool by the end of 2024, supporting the Federal Reserve's cautious attitude towards slow interest rate cuts.

Economists expect that the month-on-month growth rate of the U.S. CPI in December last year was 0.3%, and the year-on-year growth rate will rise to 2.9%; the core CPI inflation, excluding volatile factors such as energy and food, is expected to grow by 3.3% year-on-year for four consecutive months, with a month-on-month growth rate slowing to 0.2%.

After the employment data was released, consumer surveys showed a significant rise in long-term inflation expectations. The University of Michigan survey indicated that about 22% of respondents believe that purchasing high-priced goods now can avoid future price increases, the highest level since 1990After the release of the non-farm payroll report, economists at some major U.S. banks have lowered their expectations for interest rate cuts. Federal Reserve officials indicated last December that they would only cut rates twice by 2025, and recent comments suggest that the Fed will be more restrained. Next week's U.S. inflation data will be key in assessing the Fed's interest rate cuts.

U.S. Earnings Season Kicks Off, TSMC Releases Earnings Report

The U.S. Q4 earnings season begins this week, with banks such as JP Morgan, Citigroup, Goldman Sachs, and Bank of America set to report their earnings first. The start of 2025 has been unfavorable for U.S. stocks, with the three major indices recording their worst performance for the same period since 2016, making corporate earnings the next key factor influencing U.S. stock trends.

TSMC will also release its earnings report, with Q4 2024 revenue reaching NT$868.5 billion (approximately USD 26.3 billion), a year-on-year increase of 39%, exceeding analysts' expectations of NT$854.7 billion, and a full-year revenue growth of 33.9% for 2024. The company's sales in December and Q4 exceeded expectations, boosting the AI outlook for 2025.

Other Important Data, Meetings, and Events

• SpaceX's Starship Program to Conduct 7th Test Flight

On January 8, local time, SpaceX announced that its seventh test flight mission (IFT-7) for the Starship is scheduled for January 13. The Starship will deploy 10 simulated satellites in space for the first time, similar in size and weight to the next-generation Starlink satellites.

• U.S. Supreme Court to Weigh in on TikTok Ban

According to China Daily, on January 10, local time, the U.S. Supreme Court held oral arguments regarding the TikTok "ban if not sold" law, with TikTok and the U.S. Department of Justice as the parties involved. The case involves two main issues: freedom of speech and U.S. national security. After approximately 2.5 hours of debate, the Supreme Court is expected to issue an opinion on the TikTok ban next week.

• Yoon Suk-yeol Impeachment Case Officially Begins

The Constitutional Court of South Korea will officially hear the impeachment case of Yoon Suk-yeol on January 14, with five hearing dates confirmed: January 14, 16, 21, 23, and February 4. Yoon's defense attorney, Yoon Gap-geun, stated that Yoon Suk-yeol will personally attend the hearing and defend himself. If he appears, he will be the first sitting South Korean president to attend an impeachment trial. Previously, former presidents Roh Moo-hyun and Park Geun-hye never attended their impeachment hearings.

IPO Opportunities

During the week (January 13-17), there are five new stocks available for subscription in the A-share market. On January 13, ChaoYan Co., Ltd. and XingFu Electronics will open for subscription; on January 14, FuLing Co., Ltd. will open for subscription; on January 16, YaLian Machinery and HaiBo SiChuang will open for subscription. In the Hong Kong stock market, five new stocks will be listed, including Yibin Bank, XinJiao RV, and SaiMu Technology.

A total of 12 new funds (combined statistics for Class A and Class C) were issued during the week.

Subscribe to Weekly Major Events: