This morning, A-shares are still relatively strong. As of 11 a.m., a total of more than 4,000 stocks rose, the ChiNext index soared more than 3.8%, the Shanghai Composite Index stood above 3,100 points, and sectors such as automobile dismantling, real estate development, and wind power equipment led the gains.
On the market, there are three major news in the market:
First, the real estate sector rose sharply, with real estate ETFs soaring nearly 5% in early trading today. The easing policy in core second-tier cities has increased, which has led to a sharp inflow of foreign capital in early trading.
Second, treasury bond futures dived at the beginning of the session, with the 30-year main contract falling by more than 0.8%, the 10-year main contract falling by nearly 0.4%, and the 5-year main contract falling by nearly 0.3%. At the same time, the dividend index also fell sharply. This means that the whole market has come out of the risk-off phase.
Third, the exchange rate of emerging markets in Asia fell sharply again. The dollar briefly broke through 160 against the yen, and the dollar also rose sharply against the South Korean won.
The May Day holiday is coming soon, how will A-shares perform? Let's take a look at the news that affects the market this week.
01 Real estate expectations are strengthening
This past weekend, local housing-related policies have been intensively introduced, such as Shenzhen and Nanjing, which have successively announced the implementation of the "old for new" policy for commercial housing, aiming to stimulate the activity of the local property market. At the same time, Chengdu announced the lifting of purchase restrictions to promote the stable and healthy development of the real estate market.
Kaiyuan Securities believes that the current signal of stabilizing real estate is clear, and it is expected that the future real estate policy will continue to be loose, and there is still room for the release of housing demand. Megacities are actively and steadily promoting the transformation of urban villages, and more measures are expected to be accelerated.
02 Corporate financial reports have been released one after another
At the end of April, the first quarter report of 2024 and the annual report of 2023 of A-share listed companies will be disclosed. As of April 29, a total of 4,829 A-share listed companies have disclosed their 2023 annual reports, of which 3,925 are profitable and 904 are loss-making, with a total revenue of 67.45 trillion yuan, a year-on-year increase of 1.65%, and a total net profit of 5.1 trillion yuan, a year-on-year decrease of 2.42%. At present, more than 3,300 listed companies have released dividend plans for 2023, and hundreds of companies plan to distribute cash dividends of more than 10 yuan (before tax) for every 10 shares.
In addition, among the "Big Seven of Technology Stocks", Apple and Amazon will release earnings reports this week. "AI concept stocks" Qualcomm, AMD, and Supermicro Computer will also disclose the latest revenue status, which may affect Nvidia.
03 Industrial economic data will be released
On April 30, the National Bureau of Statistics will release a monthly report on the economic benefits of industry. Previous data show that from January to February this year, the total profit of industrial enterprises above designated size in the country was 914.06 billion yuan, a year-on-year increase of 10.2%. April PMI data will also be released. On April 30, the National Bureau of Statistics will also release the operation of China's purchasing managers' index (PMI) for April. In March, China's manufacturing purchasing managers' index (PMI), non-manufacturing business activity index, and composite PMI output index were 50.8%, 53.0%, and 52.7% respectively, all of which increased from the previous month and were higher than the critical point.
04 The Beijing-Shanghai-Shenzhen Stock Exchange announced the May Day market closure arrangement
May 1 to May 5 is the May Day holiday, and the Beijing, Shanghai and Shenzhen stock exchanges have announced the May Day holiday arrangements for 2024.
According to the arrangement, the market will be closed from May 1 (Wednesday) to May 5 (Sunday), and the market will be open as usual from May 6 (Monday). The market will be closed on Sunday, April 28 and Saturday, May 11. In addition, the liquidation will be conducted in accordance with the arrangements of China Securities Depository and Clearing Corporation.
It is also understood that Hong Kong stocks will be closed for one day on May 1 (Wednesday), and Southbound Hong Kong Stock Connect and Northbound Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect will not provide services from May 1 (Wednesday) to May 5 (Sunday). On 6 May, Stock Connect will be launched as usual.
05 The Federal Reserve will announce its interest rate decision
The Federal Reserve will announce its latest interest rate decision for May in the early morning of May 2, Beijing time. Given the risk of stagflation in the U.S. economy and the resilience of inflation data, the Fed is widely expected to remain on hold and keep interest rates unchanged at 5.25%-5.5%.
Guotai Junan Securities believes that the following aspects of this interest rate meeting are worth paying attention to: First, whether to announce a slowdown in the pace of balance sheet reduction. It is expected that the Fed may announce a slowdown in the pace of balance sheet reduction at the May interest rate meeting and start implementing it in June, and the overall balance sheet reduction ceiling may be reduced from the current $95 billion per month to $65 billion per month, or even lower. The second is the perception of inflation. In January 2024, the Fed's monetary policy statement added the phrase "employment and inflation are achieving a better rebalancing", and after inflation exceeded expectations for three consecutive months in the first quarter, it is necessary to pay attention to whether the monetary policy statement will revise the statement, and pay attention to Fed Chairman Powell's statement on the balance of risks of "employment and inflation" at the press conference. The third is the perception of growth and employment. The Fed's monetary policy statement and Powell's speech are expected to remain broadly unchanged on growth and employment, i.e., the economy is still expanding steadily and employment remains strong.
06 The foreign exchange market is still not calm
While the equity market continues to strengthen, the Asian currency market is not calm. In early trading today, the dollar reached above 160 yuan against the yen, the won also fell sharply, and the Thai baht also fell sharply.
The Bank of Japan will release the minutes of its March monetary policy meeting on May 2. Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities in Singapore, said: "There is little indication that the BOJ is considering raising interest rates in the near term. "Last Friday, the Bank of Japan's latest interest rate decision kept the benchmark interest rate at 0-0.1%. The BOJ also said it expects the current accommodative financial conditions to continue, saying that "financial conditions have been accommodative."
Although Japanese authorities have yet to make a move, forex traders may assume that USDJPY's reach of 160 is enough for them to start reducing some of their exposure to the yen, especially as it soars above that level on Monday.
From the perspective of A-shares, the current foreign exchange market has not yet reached a risk level sufficient to affect equity. The recent trading levels have also been quite good, and the market may have started to expect some positive news from the upcoming high-level meeting. However, on the eve of the May Day holiday, it is also worth paying attention to whether there will be a change in expectations due to some variables, or whether the time will be delayed.
China Business Daily is synthesized from China Securities Journal, China Fund News, China Business News, and Shanghai Securities News