August 18 Market Analysis

A number of Federal Reserve officials recently indicated that interest rate cuts may be imminent. Among them, hawkish figure and Minneapolis Federal Reserve Chairman Kashkari pointed out that the weakness of the job market may open the door to the September interest rate cut decision. Affected by this, the US stock market reacted positively, and all major indices closed higher each day. The Nasdaq and Russell small-cap stock indices rose more than 1%, and the S&P 500 index rose about 1%, driving 11 sectors to rise sharply. It is worth mentioning that the S&P 500 and NASDAQ indices achieved eight consecutive days of gains for the first time in the year. The cumulative increase during this period was nearly 8%, the best performance since March 2003.

The chip stock index rose nearly 2%, and the China General Stock Index rose 1.4%. Nvidia rose more than 4%, with a cumulative increase of more than 24% over the past six days. Tesla also performed strongly, rising more than 3%. Berkshire Hathaway's stock price hit a new high. Meanwhile, as the Philippines reported its first case of monkeypox this year, monkeypox concept stocks rose sharply in early trading, although most of the gains narrowed by the close.

At the macro level, investment heavyweights such as Buffett and Soros are reducing their positions. Among them, Soros also established hedging by buying put options. On the political stage, Trump proposed being willing to give Musk a cabinet position and criticized Google and preferential policies for electric vehicles. Vice President Harris proposed raising the corporate tax rate to 28% to return more capital to workers.

The market is now closely watching Federal Reserve Chairman Powell's upcoming speech at the Jackson Hole annual meeting this Friday. Under this outlook, medium- to long-term US bond yields declined slightly by more than 2 basis points, and the US dollar index fell below 102, hitting a seven-month low. Both the yen and the euro appreciated, while the offshore renminbi also rose significantly against the US dollar, breaking through 7.13 yuan at one point.

In the commodity market, the price of US oil fell nearly 3%, falling below the $75 mark due to concerns about global demand prospects. Meanwhile, gas prices in New York rose by more than 5%. Despite a slight drop in the price of spot gold, it remained stable above $2,500, while the London metal market generally rose, with aluminum rising close to 3.4%.

In the Asian market, A-share performance was divided, with the stock prices of the four major banks reaching record highs, while the three major indices of Hong Kong stocks closed higher across the board.

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