RGTI
Rigetti Computing
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Tesla
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NVIDIA
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SEALSQ Corp
-- 9.080 PLTR
Palantir
-- 79.080 
Iron ore Market and A-share Market Weekly Report and Global Capital Market Weekly Report 20240122
Overall, looking at it
In the later period, the domestic port resources further decreased, while steel companies continued to resume production, both of which jointly led to the marginal improvement in the fundamentals of iron ore, helping the iron ore price stabilize after continuous decline. At the same time, imported ore inventories accelerated flow to the ports and steel mills, paying attention to the price pressure brought by the increase in port ore inventories.
On the supply side
Global shipments amounted to 26.936 million tons, an increase of 0.031 million tons compared to the previous period. Among them, Australia shipped 15.739 million tons, a decrease of 1.237 million tons from the previous week, Brazil shipped 7.131 million tons, an increase of 2.955 million tons compared to the previous period, and non-mainstream shipments totaled 4.07 million tons, a decrease of 1.69 million tons compared to the previous period.
Global ore shipments remained relatively low, but looking ahead, the impact of the FMG train derailment incident has ended. It is expected that FMG deliveries will significantly increase, while some non-mainstream mines are expected to maintain high shipments, leading to an overall increase in ore shipments. The ore arrivals last week approached 30 million tons, the second-highest level in recent years. In the later period, with the decline in Australian shipments since the beginning of the year, the arrival level is expected to show a top reversal trend.
On the demand side
247 steel mills had a blast furnace capacity utilization rate of 76.23%, an increase of 0.15% compared to the previous week, and an increase of 0.26% compared to last year; the blast furnace iron production capacity utilization rate was 82.98%, an increase of 0.42% compared to the previous period, and a decrease of 0.12% year-on-year; the steel mill profitability rate was 26.41%, a decrease of 0.43% compared to the previous period, and a decrease of 0.86% year-on-year; the average daily pig iron production was 2.2191 million tons, an increase of 0.0112 million tons compared to the previous period, and a decrease of 0.0183 million tons year-on-year.
This week, steel companies further resumed production, but the increase in pig iron production was less than expected. Considering the resumption of production by large steel companies in Central China and South China this week, it is expected that pig iron output will further increase next week. According to the maintenance and resumption plans of steel companies, the production changes in other regions are expected to be less significant.
As for inventory
• The total inventory of imported iron ore in national steel plants is 102.4388 million tons; the inventory of imported iron ore at 45 ports is 126.419 million tons, an increase of 0.2079 million tons compared to the previous period; the daily average volume of clearing ports is 3.1921 million tons, an increase of 0.064 million tons. $SSIF DCE Iron Ore Futures Index ETF (03047.HK)$
A-share weekly report for this week:
The pressure on the microstructure of the chips is the core reason for the adjustment of this round of indexes. On January 18, the market experienced a significant adjustment. Under the pressure of the risk of knocking in snowball products and the large-scale hedging, the SSE Composite Index temporarily fell to 2760.98 points. The basis difference of the four major stock index futures once widened to an extreme level of 3%-4%.
The market lacks trading heat (the daily trading volume of the whole market is hovering around 600 billion, previously 800-100 billion), exacerbating emotional diffusion. Recently, incremental funds continue to buy CSI 300 and other broad-based index ETFs, with significant stabilizing effects. Looking ahead in the market:
1) Currently, the liquidity pressure in the stock market is temporarily easing. In the future, the pace may refer to 2015, and the easing of liquidity pressure in the stock market may also be a series of ups and downs, not necessarily immediate.
2) The medium-term market is not pessimistic. The domestic economy is more stable than last year, the global liquidity environment is significantly better than the past two years, and the cost-effectiveness of domestic assets is currently in a historically favorable range.
3) Signals to watch for in the future: Sino-US communication and easing tensions, the sustainability and changes in incremental funds, and the potential easing of domestic monetary policy. In terms of allocation, it is worth investing in growth stocks in the medium term. Due to institutional chip pressure, short-term performance concerns, and a decline in market risk appetite, the growth industries such as TMT, pharmaceuticals, machinery, and military industry that investors unanimously bullish on at the end of last year are currently at the bottom of the rankings in all industries, with a pessimism level and asset valuation similar to the end of 2018.
Looking at the whole year, a large number of high-quality growth stocks, even if their valuations further contract (e.g., by 10%) and only earn profit growth income (e.g., by 20%), the current implied income (calculated to be around 10%) is considerable. The opportunities for high-profit/growth stocks in the medium term are already quite evident, making them worthy of long-term positioning. $BABA-W (09988.HK)$
Global capital market weekly report:
The performance of software stocks within our SMID upper limit (applications/verticals) coverage in 2023 slightly outperformed the S&P 500 index, with an average performance of +28%, while the S&P 500 index was +24%. In other words, the key performance in 2023 was significantly diversified, including top performers (VERX +84%, ALKT +61%) and underperformers (ETWO -27%, MODN -34%), with different execution narratives and end-market exposures. In summary, 2023 will reward special, narrative-driven investments, and we expect 2024 to largely reflect this trend. $Vertex (VERX.US)$ $Model N (MODN.US)$
The dispersion phenomenon will continue in 2024, and we expect stock performance to remain diversified for the following reasons:
1) Product cycle stories lead to investor expectations of facing upward risks.
The resilience of high-quality companies facing cyclical or business model headwinds in 2023, investor sentiment has remained low this year.
We believe that as the macroeconomic impact on growth continues until the end of the year, most companies are expected to adopt a conservative strategy for the initial guidance of 2024, which will enhance this and bring more outperformance opportunities throughout the year. Conversely, we believe that many potential defensive themes that have been embedded in stock prices to a large extent, which support fundamental elasticity and the stock prices of selected companies in 2023 (basic product features, flexible value realization timeline, countercyclical revenue retention). Although we are positive about these business models, the favorability towards these stocks is decreasing.
In the later period, the domestic port resources further decreased, while steel companies continued to resume production, both of which jointly led to the marginal improvement in the fundamentals of iron ore, helping the iron ore price stabilize after continuous decline. At the same time, imported ore inventories accelerated flow to the ports and steel mills, paying attention to the price pressure brought by the increase in port ore inventories.
On the supply side
Global shipments amounted to 26.936 million tons, an increase of 0.031 million tons compared to the previous period. Among them, Australia shipped 15.739 million tons, a decrease of 1.237 million tons from the previous week, Brazil shipped 7.131 million tons, an increase of 2.955 million tons compared to the previous period, and non-mainstream shipments totaled 4.07 million tons, a decrease of 1.69 million tons compared to the previous period.
Global ore shipments remained relatively low, but looking ahead, the impact of the FMG train derailment incident has ended. It is expected that FMG deliveries will significantly increase, while some non-mainstream mines are expected to maintain high shipments, leading to an overall increase in ore shipments. The ore arrivals last week approached 30 million tons, the second-highest level in recent years. In the later period, with the decline in Australian shipments since the beginning of the year, the arrival level is expected to show a top reversal trend.
On the demand side
247 steel mills had a blast furnace capacity utilization rate of 76.23%, an increase of 0.15% compared to the previous week, and an increase of 0.26% compared to last year; the blast furnace iron production capacity utilization rate was 82.98%, an increase of 0.42% compared to the previous period, and a decrease of 0.12% year-on-year; the steel mill profitability rate was 26.41%, a decrease of 0.43% compared to the previous period, and a decrease of 0.86% year-on-year; the average daily pig iron production was 2.2191 million tons, an increase of 0.0112 million tons compared to the previous period, and a decrease of 0.0183 million tons year-on-year.
This week, steel companies further resumed production, but the increase in pig iron production was less than expected. Considering the resumption of production by large steel companies in Central China and South China this week, it is expected that pig iron output will further increase next week. According to the maintenance and resumption plans of steel companies, the production changes in other regions are expected to be less significant.
As for inventory
• The total inventory of imported iron ore in national steel plants is 102.4388 million tons; the inventory of imported iron ore at 45 ports is 126.419 million tons, an increase of 0.2079 million tons compared to the previous period; the daily average volume of clearing ports is 3.1921 million tons, an increase of 0.064 million tons. $SSIF DCE Iron Ore Futures Index ETF (03047.HK)$
A-share weekly report for this week:
The pressure on the microstructure of the chips is the core reason for the adjustment of this round of indexes. On January 18, the market experienced a significant adjustment. Under the pressure of the risk of knocking in snowball products and the large-scale hedging, the SSE Composite Index temporarily fell to 2760.98 points. The basis difference of the four major stock index futures once widened to an extreme level of 3%-4%.
The market lacks trading heat (the daily trading volume of the whole market is hovering around 600 billion, previously 800-100 billion), exacerbating emotional diffusion. Recently, incremental funds continue to buy CSI 300 and other broad-based index ETFs, with significant stabilizing effects. Looking ahead in the market:
1) Currently, the liquidity pressure in the stock market is temporarily easing. In the future, the pace may refer to 2015, and the easing of liquidity pressure in the stock market may also be a series of ups and downs, not necessarily immediate.
2) The medium-term market is not pessimistic. The domestic economy is more stable than last year, the global liquidity environment is significantly better than the past two years, and the cost-effectiveness of domestic assets is currently in a historically favorable range.
3) Signals to watch for in the future: Sino-US communication and easing tensions, the sustainability and changes in incremental funds, and the potential easing of domestic monetary policy. In terms of allocation, it is worth investing in growth stocks in the medium term. Due to institutional chip pressure, short-term performance concerns, and a decline in market risk appetite, the growth industries such as TMT, pharmaceuticals, machinery, and military industry that investors unanimously bullish on at the end of last year are currently at the bottom of the rankings in all industries, with a pessimism level and asset valuation similar to the end of 2018.
Looking at the whole year, a large number of high-quality growth stocks, even if their valuations further contract (e.g., by 10%) and only earn profit growth income (e.g., by 20%), the current implied income (calculated to be around 10%) is considerable. The opportunities for high-profit/growth stocks in the medium term are already quite evident, making them worthy of long-term positioning. $BABA-W (09988.HK)$
Global capital market weekly report:
The performance of software stocks within our SMID upper limit (applications/verticals) coverage in 2023 slightly outperformed the S&P 500 index, with an average performance of +28%, while the S&P 500 index was +24%. In other words, the key performance in 2023 was significantly diversified, including top performers (VERX +84%, ALKT +61%) and underperformers (ETWO -27%, MODN -34%), with different execution narratives and end-market exposures. In summary, 2023 will reward special, narrative-driven investments, and we expect 2024 to largely reflect this trend. $Vertex (VERX.US)$ $Model N (MODN.US)$
The dispersion phenomenon will continue in 2024, and we expect stock performance to remain diversified for the following reasons:
1) Product cycle stories lead to investor expectations of facing upward risks.
The resilience of high-quality companies facing cyclical or business model headwinds in 2023, investor sentiment has remained low this year.
We believe that as the macroeconomic impact on growth continues until the end of the year, most companies are expected to adopt a conservative strategy for the initial guidance of 2024, which will enhance this and bring more outperformance opportunities throughout the year. Conversely, we believe that many potential defensive themes that have been embedded in stock prices to a large extent, which support fundamental elasticity and the stock prices of selected companies in 2023 (basic product features, flexible value realization timeline, countercyclical revenue retention). Although we are positive about these business models, the favorability towards these stocks is decreasing.
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3047 is a team specializing in the research of commodities and smart beta. We like to exchange investment strategies.
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