Market Analysis on February 20th

The US stock market was closed last night. Pan-European indexes hit a two-year high in recent trades, despite temporary pauses in the German and French stock markets. The German stock market fell from its closing record high, while the French stock market, which hit historical highs for two consecutive days, closed roughly flat. novo-nordisk a/s hit historical highs for five consecutive days, helping the Danish stock market set new record highs for four consecutive days. In terms of sector performance, the medical sector led the European stock market, while the mining sector fell by 1% leading the market down. Technology stocks also saw a decline, with ASML falling by 1.7%.

In the USA, Morgan Stanley's bearish analyst Wilson pointed out that the balance of the Federal Reserve's overnight reverse repurchase tool continues to shrink, implying that Biden's fiscal stimulus measures are coming to an end. The current economic situation is not optimistic for ordinary companies and consumers in the USA. Meanwhile, BlackRock stated that with market expectations of the Bank of Japan possibly raising interest rates soon, Japanese stocks will be the big winners, as overseas investors currently have a low allocation to Japanese stocks, expecting more funds to flow in to support further upside in Japanese stocks.

In terms of geopolitics, tensions in the Red Sea have escalated, with the Houthi armed forces claiming to have hit two US ships accurately with missile attacks. Meanwhile, the attacked British "Ruby" cargo ship has completely sunk, an incident that could affect regional security and related market sentiment. Crude oil prices hit a three-month high in a row, despite Brent crude initially falling by over 1% during trading before turning positive and closing higher for three consecutive days.

In China, A-shares welcomed a good start on the first trading day of the Year of the Dragon, with the Shanghai index rising by over 1%, surpassing 2900 points. AI concept stocks surged, the 'Three Oil Giants' strengthened, and small and micro-cap stocks continued to rebound. The offshore renminbi to US dollar exchange rate rose above 7.21 during trading, hitting over a week's high. Despite later dropping by over a hundred points briefly, it eventually achieved a slight increase. These market dynamics reflect various factors, including policy expectations, geopolitical tensions, and industry development trends, all of which have an impact on investor sentiment and market trends.

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Youdao February business sharing meeting