A list of major financial events in the week from April 22nd to April 26th, the following are Beijing time:
This week's highlights: China's April LPR quotes, the United States' first-quarter GDP, March PCE data, the Eurozone, France, Germany and the United States, including PMI data, in addition, the Bank of Japan will announce interest rate decisions and economic outlook forecasts, the US stock technology giants are coming, Tesla, Meta, Microsoft, Google and other companies accounting for 40% of the S&P 500 market capitalization, four of the seven giants will report earnings.
China's April LPR was announced
- April 22 (Monday) 09:15 China 1-year/5-year loan prime rate (LPR) in April
On April 22, the People's Bank of China (PBOC) will announce the one-year and five-year loan prime rates (LPRs).
The MLF interest rate remained unchanged in April, and many institutions expect the LPR to remain stable this month, with the current 1-year LPR at 3.45% and the LPR over 5 years at 3.95%.
Dong Ximiao, chief researcher of Zhaolian, pointed out that the loan market prime rate is added to the 1-year MLF basis, the MLF interest rate remains unchanged, and the probability of LPR changes is small, and it is expected that this month's LPR will be the same as last month. According to data released by the central bank a few days ago, the weighted average interest rate of new corporate loans in March was 3.75%, 22 basis points lower than the same period last year. The interest rate on new personal housing loans was 3.71%, 46 basis points lower than the same period last year and at a historical low. If the LPR remains unchanged this month, it will help alleviate the downward pressure on banks' interest margins and maintain the sustainability and robustness of the development of the real economy.
Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, believes that because the data since the beginning of the year show that the economic recovery and physical financing situation are generally ideal, the five-year LPR was lowered by 25 basis points more than expected in February, and the policy effect is expected to be gradually released, the net interest margin of some banks is under great pressure, and the MLF interest rate remains stable this month, and other factors, it is expected that the LPR interest rate will remain stable this month. Looking ahead, Zhou Maohua believes that RRR cuts, interest rate cuts, and directional tools are still in the toolbox, but the specific implementation needs to depend on the pace of macroeconomic recovery, price recovery and real estate recovery.
U.S. GDP for the first quarter and PCE data for March
- April 25 (Thursday) 20:30 U.S. real GDP in the first quarter annualized quarter-on-quarter preliminary value
On Thursday, the U.S. Department of Commerce will release data on U.S. GDP for the first quarter and core personal consumption expenditures (PCE) annualized quarter-on-quarter for the first quarter.
The market expects that the annualized preliminary value of real GDP in the first quarter of the United States will increase by 2% year-on-year, a sharp slowdown from the previous value of 3.4%, indicating that the US economy has cooled down under high interest rates.
However, the U.S. economy has been resilient throughout last year, and the annualized QoQ final value of U.S. GDP in the fourth quarter was unexpectedly revised upward to 3.4% compared with 3.2% in the previous year, affected by the growth of consumer spending and local government spending. The U.S. economy grew by 2.5% in 2023 as a whole, compared to 1.9% in 2022.
Economists polled by the media reduced the probability of a recession in the next 12 months to 30%, the smallest probability since June 2022 and down from 35% in the previous month, expecting GDp to increase by an average of 2.4% for the whole of 2024.
- On Friday, April 26, the US personal consumption expenditures (PCE) in March were month-on-month
The US March CPI data beat market expectations, and investors lowered bets on the Federal Reserve to cut interest rates, while the Fed's favorite inflation gauge, the March PCE price index, which will be released on Friday, is likely to remain high, and further rate cuts need to be patiently expected.
The market is widely expected to accelerate slightly to 2.6% year-on-year in March as energy costs rise. Core PCE, which excludes energy and food, is expected to remain unchanged at 0.3% month-on-month, in line with the previous reading, indicating that inflation is no longer cooling.
At the same time, data on personal spending and income for March will also be released, and against the backdrop of a solid job market, economists expect household spending on goods and services to grow sharply again, and income growth is also expected to accelerate.
It is worth mentioning that the PCE data shows that inflation may be moderated than the CPI, because the weight of OER in the CPI index is as high as 34%, while the proportion of OER in the PCE inflation indicator is much lower, only 13% weight, and the lack of attention to OER makes PCE provide a more accurate inflation profile.
The analysis noted that Fed officials are on the verge of further confirmation that progress in the fight against inflation has stalled, supporting a shift in the tone of the policy outlook to keep interest rates at bay for longer than previously expected.
The Bank of Japan announced its new interest rate decision
- April 26 (Friday) 11:00 The Bank of Japan will announce its interest rate decision and outlook report
More than a month after the first interest rate hike since 2007, the Bank of Japan will release its latest interest rate decision and economic outlook report.
The Bank of Japan is widely expected to remain on hold. On 20 April, Bank of Japan Governor Kazuo Ueda said that Japan's monetary policy will remain accommodative for some time and that policymakers will continue to buy government bonds.
Meanwhile, economists and investors will scrutinize the BoJ's forecast for inflation risks as the BoJ is widely expected to leave policy unchanged after shelving its massive easing program, looking for any hints at the pace of future rate hikes.
Earlier this month, Kazuo Ueda highlighted the possibility of an improvement in the inflation trend in an interview, hinting at the possibility of a rate hike in the second half of the year. Economists believe that the recent acceleration in the depreciation of the yen may bring this timetable forward.
- April 26 (Friday) 07:30 April CPI data in Tokyo, Japan
Tokyo's April CPI data is also worth paying attention to, with the market generally believing that Tokyo's April CPI will fall further, with CPI expected to slow from 2.6% to 2.5% year-on-year, and core CPI growth expected to slow from 2.9% to 2.8% year-on-year.
Japan's core CPI index for March rose 2.9% year-on-year on Friday, less than expectations of 3% and down from 3.2% in February, and the core CPI has fallen for seven consecutive months, falling below 3% for the first time since November 2022. The Bank of Japan has said that a virtuous cycle of sustained and stable achievement of the 2% price target and strong wage growth is essential for monetary policy.
The tech giants are on the payoff wave
The sell-off in the U.S. "Seven Sisters" comes as Wall Street prepares for this week's earnings wave of tech giants.
According to the media think tank, the "seven sisters" — Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla — are on track to soar 38% in first-quarter profits. Excluding these seven companies, the rest of the S&P 500 is expected to see a 3.9% decline in profits.
Tesla will report its earnings for the first quarter of 2024 on Tuesday, which ends March 31, kicking off the earnings season of the tech giant.
Barclays analyst Dan Levy expects Tesla to experience negative free cash flow for the first time since the first quarter of 2020, and gross margin after deducting regulatory credit could fall to 14.6%, down 2.6 percentage points from the previous quarter — meaning Tesla's car profitability will return to the level shortly after the launch of the Model 3 in 2017.
In terms of deliveries, Levy predicts that Tesla's deliveries in 2024 will be flat, mainly considering that Tesla is still facing an inventory backlog: about 100,000 unsold cars at the beginning of the year, and another 45,000 to 50,000 in the first quarter.
Meta Platforms将于周四凌晨公布新一季度财报。
Benefiting from AI's more accurate advertising, Meta's stock price has risen nearly 40% this year, and Dan Niles, founder of Niles Investment Management, believes that Meta's valuation is still not high, with a future price-to-earnings ratio of more than 20 times and revenue growth in the mid-10% range. At the same time, Meta is still benefiting from its "Year of Efficiency" plan in 2023, which has prompted it to lay off more than 20% of its workforce, but the increase in AI engineers with annual seven-figure salaries and high spending on AI hardware will squeeze profit margins.
Microsoft will report earnings in the early hours of Friday morning. Morgan Stanley believes that AI could help Microsoft double its earnings per share by fiscal 2029.
The use of AI Copilot software, which costs $30 per user per month, will be the biggest highlight of Microsoft's quarterly report. Analysts believe that Microsoft may not provide too many details, but expects a positive tone. Another point of interest is the Azure cloud business, whose revenue is expected to grow by 28%, which is the same as in the fourth quarter of last year.
Google will also report earnings on Friday.
There are concerns about whether Google's web searches will be hit by chatbots, including its own Gemini, which currently has no ads. But like Meta, Google should have strong ad demand this year as the Olympics and the election approach.
Other important data, meetings and events
The A-share earnings season has entered a super-intensive period
According to Wind data, 2,231 listed companies in the A-share market will disclose their 2023 annual reports this week. Among them, it is worth paying attention to Mindray Medical, Sany Heavy Industry, Great Wall Motor, Kweichow Moutai, Muyuan Co., Ltd., Huadian International, Luzhou Laojiao, Haitian Flavor Industry, etc.
The 18th Beijing International Automobile Exhibition
The 18th Beijing International Automobile Exhibition will be held in Beijing from April 25 to May 4. New models such as BYD Ocean, Formula Leopard, Denza, Huawei Smart Car, Ideal, Leap, and Zeekr may be unveiled at the 2024 Beijing Auto Show.
Models expected to be unveiled at the auto show: Geely Galaxy E5, Beijing new BJ30, Audi Q6 e-tron, Magotan B9, Buick new GL8 PHEV version, Xiangjie S9, Xpeng new brand, Lynk & Co 07 EM-P, ID.UNYX Hezhong, Jietu Shanhai T2, ZEEKR MIX, Zhiji L6, Ford Horse, Star Era ET, Li L6, etc.
2024 Zhongguancun Forum Annual Conference
The 2024 Zhongguancun Forum Annual Conference will be held in Beijing from April 25 to 29, and the parallel forums will be an important part of the forum's conference section, and this year will focus on artificial intelligence, space science, life and health, carbon peak and carbon neutrality, future industries and other scientific and technological frontiers and hot topics, by national ministries and commissions, international organizations, Beijing-Tianjin-Hebei and other provinces and cities to hold 60 forums.
Tesla may announce plans to build a factory in India
According to media reports, Tesla CEO Elon Musk will visit New Delhi next week to meet with Indian Prime Minister Narendra Modi, when he will announce an investment of $2 billion to $3 billion in India, mainly to build a new factory there. Musk has confirmed on social media platforms that he will meet with Modi in India, but has not mentioned investment-related matters. In March, the Indian government unveiled a new electric vehicle policy that would reduce import taxes from 100 percent to 15 percent on certain models if automakers invest at least $500 million and set up factories.
The 10 billion reverse repurchase expires
Wind data shows that 10 billion yuan of reverse repos will expire in the open market of the central bank this week, of which 2 billion yuan will mature every day from Monday to Friday. In addition, 70 billion yuan of treasury cash fixed deposits expired on Tuesday (April 23), and 5 billion yuan of central bank bill swaps expired on Thursday (April 25).
Hit new opportunities
In the same week (April 22-April 26), there will be 3 new stocks listed on the Hong Kong stock market, namely Chabaidao, Mobvoi, and Tianjin C&D.
Chabaidao will become the second new tea beverage company to be listed on the Hong Kong stock market after Nai Xue's tea. According to the data, the total number of tea Baidao stores reached 7,927. In 2023, the total retail sales of Chabaidao stores will reach about 16.9 billion yuan, and the gross profit margin of Chabaidao from 2021 to 2023 will be 35.7%, 34.4% and 34.4%.
Mobvoi is an AI company with generative AI and voice interaction technology as its core business, and will become the first AIGC stock in Hong Kong. According to the CIC Industry Report, Mobvoi is one of the few AI companies in Asia with the ability to build general-purpose large models. In terms of AIGC solution revenue in 2022, Mobvoi is the earliest AI company focusing on AIGC technology in China with the highest revenue.
According to the latest shareholding structure, before the IPO, SIG Haina Asia held a 17.03% stake in Mobvoi, making it the largest institutional investor, while Google, Sequoia China and Goertek also held more than 10% of Mobvoi's shares.
In addition, next week, another new stock will be subscribed, which is Ole New Materials, which will be listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange.
A total of 15 new funds (Class A and Class C combined) were issued during the week.
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