Market analysis on August 26th

The US stock market once again experienced typical sector rotation, with the Dow Jones Industrial Average reaching a historic high, while the S&P 500 Index and Nasdaq Index both experienced a decline due to the fall of technology stocks. The energy sector performed well in this rotation, with an increase of over 1%.

In the technology sector, Tesla and Nvidia fell by more than 3% and 2% respectively. As for Chinese concept stocks, pdd holdings' stock price plummeted nearly 29% after the release of its quarterly financial report, marking its largest single-day decline since its US IPO. However, Xpeng's stock price rebounded over 7% on the same day due to the news of CEO's shareholding increase.

In the bond market, US Treasury yields rose slightly. In the money market, the USD index rebounded after hitting a new low for the year, while the yen turned downward after reaching a three-week high. Offshore RMB rose above 7.11 for the first time in three weeks, but later fell by over 100 points. In the digital currency market, Bitcoin briefly touched a high of $0.065 million before falling back by about $2000.

Pdd holdings' financial report shows a year-on-year revenue growth of 86% and a net income growth of 144% in the second quarter, but CEO Chen Lei stated that he is willing to sacrifice short-term profits to improve the company's ecosystem. The company's conference call also emphasized a strategy of no dividend and no share buybacks in the coming years, which may be a significant factor in its significant stock price decline.

Goldman Sachs' fund flow experts pointed out that despite hedge funds selling stocks at the fastest pace in over two years, it is expected that the S&P 500 Index will still reach a new high this week due to the strong inflow of funds from corporate buybacks and systematic funds, which may trigger a "FOMO" (fear of missing out) phenomenon in the market.

In terms of geopolitical affairs, the uncertainty of the Middle East situation and the "double storm" caused by the suspension of oil exports from Libya have pushed oil prices up by more than 3%, and if the conflict between Iraq and Iran further escalates, about 4% of global oil supply will face risks.

In the Asian market, A-shares closed mixed, with strong performance in the real estate inspection concept stocks, and many stocks reached the limit. The Hang Seng Index in Hong Kong closed up 1.06%, hitting a new high in the session, and most technology stocks performed well.

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