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Nvidia crushes estimates again, but the alarm has been sounded?
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Iron ore and A-share market weekly report and global capital market weekly report 20240226

Overall, looking at it.
After the holiday, the high supply of ore and the slower-than-expected demand recovery are the core drivers of the price pressure on ore. Looking ahead, the high delivery volume of ore is expected to show a trend of initial suppression and subsequent rise, but due to the impact of high transportation, the absolute level of arrivals at the port still remains high compared to the same period. Some steel companies have delayed resuming production, leading to an increase in the expected output of molten iron in March, but the continued poor profitability of steel companies has also laid the groundwork for uncertainty in the later resumption of production by steel companies. In summary, it is expected that ore prices will remain volatile against a backdrop of high supply. $SSIF DCE Iron Ore Futures Index ETF (03047.HK)$
On the supply side
Global total shipping volume is 30.47 million tons, with a weekly increase of 4.58 million tons, Australian shipping volume increased by 2.43 million tons weekly; 45 ports received a total of 25.29 million tons, a decrease of 0.01 million tons compared to last week.
After the holiday, Fortescue Metals Group's shipping has returned to normal levels, and the current ore prices have not significantly affected the production and shipping of non-mainstream mines. Therefore, global ore shipping has once again risen and reached a new high for the year. The four major mines' shipping is expected to remain at a high level compared to the same period, while the shipping of non-mainstream mines lags behind the changes in ore prices, with short-term shipping expected to maintain high levels for the year and the same period.
On the demand side
247 steel mills have a blast furnace operating rate of 75.63%, a decrease of 0.74% compared to last week, and a decrease of 5.35% from the same period last year; blast furnace iron production capacity utilization rate is 83.59%, a decrease of 0.38% compared to the previous period, and a decrease of 3.38% from the same period last year; steel mill profit rate is 24.68%, a decrease of 0.86% compared to the previous period, and a decrease of 14.28% from the same period last year; average daily pig iron production is 2.2352 million tons, a decrease of 0.0104 million tons compared to the previous period, and a decrease of 0.0729 million tons from the same period last year.
The pace of steel company resumptions is falling short of expectations, and this week, due to the delayed resumption plans of some steel companies, iron water production for the week did not increase but instead decreased. This action has, on one hand, raised market expectations for the increase in iron water in March, while on the other hand, the poor profitability of steel companies will continue to pose challenges to the resumption of steel production.
On the inventory side.
• A total of 136.0339 million tons of imported iron ore inventory at 45 ports nationwide, an increase of 4.555 million tons month-on-month; a total of 140.8739 million tons of iron ore inventory at 47 ports, an increase of 3.6455 million tons month-on-month.
 
A-share weekly report for this week:
 
1. The market has entered a rebound stage, with previously strong resource stocks leading the rebound this week (February 19, 2024 - February 23, 2024) after the first trading week following the Lunar New Year holiday. The market saw five consecutive rises, with the SSE Composite Index fluctuating by 4.8% during the week. Considering the continuous rebound before the holiday, the SSE Composite Index has risen by about 14% from its low on February 5. The market performance during this round of rebound shows resilience in stable dividend assets. This week, the main broad-based index performance remains strong, with energy-related assets showing more resilience. The petroleum extraction index and the coal index rose by 16.6% and 17.4%, respectively, significantly outperforming "high dividend" assets. Year-to-date, coal, banks, petroleum petrochemicals, and other dividend-type assets are still leading, to some extent challenging the common perception among many investors that "as the market rebounds, styles will change." $CNOOC (00883.HK)$
 
2. What truly needs attention is the switch in the medium to long-term main trends after a major market decline. We emphasize that the common investor advice of "during a market oversold rebound, avoiding previously strong-performing varieties and buying some relatively weaker sectors" is based on a market environment where the fundamental aspects of various sectors and styles have not significantly changed in the medium to long term. However, once long-term fundamentals change, market downturns often mark the moment when the medium to long-term main trends shift. A typical example is since 2016 when small-cap stocks, once favored by the market, began to face challenges such as goodwill impairments, struggling to outperform large-cap style assets. At that time, the not-so-popular leading stocks gradually cleared the supply side, improved demand, and gradually became mainstream in the next 2-3 years. Currently, a fundamental change centred on "de-financialization" is occurring, and the market itself is at a time to break new ground again. The recent sharp fall has precisely provided investors with an opportunity to reconsider whether the current environment is indeed different.
 
Global capital market weekly report:
 
Goldman Sachs: Hedge funds sold technology stocks at the fastest pace in seven months.
Goldman Sachs stated in a report that after buying technology stocks for six consecutive weeks, hedge funds sold technology stocks last week at the fastest pace in over seven months. Following Nvidia's earnings announcement, the company's trading department indicated net selling in the industry for four consecutive trading days, including Thursday. The report mentioned that the U.S. stock market experienced the largest net sell-off in five weeks, mainly impacted by macro products and individual stocks. The capital trend indicates that investors are withdrawing from technology, medical care, and industrial stocks, while all other industry sectors recorded net inflows. Despite the largest tech benchmark stocks hitting historical highs, the call-put skewness (investor fear indicator) has not rebounded and is actually decreasing. $NVIDIA (NVDA.US)$
Iron ore and A-share market weekly report and global capital market weekly report 20240226
Iron ore and A-share market weekly report and global capital market weekly report 20240226
Iron ore and A-share market weekly report and global capital market weekly report 20240226
Iron ore and A-share market weekly report and global capital market weekly report 20240226
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