China Fund News Taylor
Brothers and sisters, tonight's U.S. stocks, witness history, the Dow broke through the 40,000-point mark! But don't worry, we have a big announcement on Friday!
The Dow crossed the 40,000-point mark for the first time
U.S. stocks rose slightly in early trading on Thursday, with the Dow breaking through the 40,000-point integer mark for the first time in history, and all three major stock indexes hitting new intraday all-time highs.
In the last session, the U.S. Department of Labor reported that the U.S. consumer price index (CPI) rose 0.3% month-on-month in April, slightly below the Dow Jones' estimate of 0.4%. The index rose 3.4% year-on-year from a year ago. The CPI index is a measure of the cost price of goods and services. U.S. CPI inflation data strengthened market bets that the Federal Reserve will start cutting interest rates this year. Investors' appetite for risky assets improved after the release of the data, and concerns about persistently high inflation eased.
John Lynch, chief investment officer at Unicredit Wealth Management, said the achievement was a testament to the power of capital formation, innovation, profit growth and economic resilience. Recent technical momentum and fundamental strengths, including earnings and interest rates, suggest that the market is set to rise further.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said the combination of slower growth and softer inflation was a big gift for the stock market. For investors, there is nothing more enticing than the taste of a future decline in interest rates.
JPMorgan said the April CPI data was a relief that inflation is back on a downward trajectory and still believes the Fed will cut rates for the first time in July, but this may need to see further cooling of labor market activity to materialize.
Morgan Stanley said that they expect inflation to cool more in the future, especially in the second half of the year, believing that the Fed will cut interest rates for the first time in September this year.
Behind the Dow's breakthrough of 40,000 points, Walmart's latest earnings report exceeded expectations, and its stock price soared 6%.
Walmart's revenue in the first quarter rose 6% year-on-year to $161.5 billion, beating market expectations by $3.36 billion. Non-GAAP earnings per share (EPS) were $0.6, up 22.4% year over year. Looking ahead, Walmart expects second-quarter revenue growth of 3.5% to 4.5%, operating profit growth of 3% to 4.5%, and adjusted EPS of $0.62 to $0.65. For full-year results, Walmart now expects 2025 adjusted EPS to be at or slightly above the top of its previous guidance (previously guidance ranged from $2.23 to $2.37), above the consensus of $2.37, and also expects revenue growth in 2025 to be at or slightly above the top of its previous guidance (3% to 4% previously), with a consensus of 4.31%.
As the Dow Jones headed for 40,000 points, expectations of a rate cut and enthusiasm for artificial intelligence boosted investor sentiment. According to CME Group's FedWatch tool, the Fed's first rate cut was priced in September.
Another big deal on Friday?
In terms of Chinese concept stocks, the Nasdaq China Golden Dragon Index rose 1.3%.
On the news side, there are two good things for us in the evening.
The first positive is that Marco Polo's IPO has been postponed.
On May 16, 2024, the Listing Committee of the Shenzhen Stock Exchange held a meeting to consider Marco Polo's initial listing application and made a decision to suspend the review.
Regarding the suspension of the review of Marco Polo's issuance and listing, the relevant person in charge of the Shenzhen Stock Exchange said that this is a normal situation in the review, and in terms of the provisions of the review system and the actual implementation, the listing committee's review results of the issuance and listing application include three types: approval, rejection, and suspension of review. According to a relevant person from the Shenzhen Stock Exchange, the listing committee suspended the review of Marco Polo's listing application, mainly considering the actual situation of the company's operating income and profit during the reporting period, such as a certain decline, and it is necessary to further confirm whether the uncertain factors affecting the performance are eliminated on the existing basis. Some market participants believe that the issuer's main business is architectural ceramics, combined with the company's industry and its own operating conditions, made a decision to suspend the review, and further assess the stability of the issuer's operating performance in the subsequent period, which not only reflects the pragmatic attitude of seeking truth from facts and objectively treating the application for corporate issuance, but also shows the firm determination to conscientiously implement the "New National Nine Articles", strictly control the issuance of access in accordance with the law, improve the quality of listed companies from the source, and better protect the legitimate rights and interests of investors.
The second positive is that the State Council Information Office held a press conference on Friday afternoon, at which the Ministry of Housing and Urban-Rural Development, the Central Bank and other departments introduced the relevant policies for guaranteeing the delivery of housing.
According to the website of the Information Office of the State Council on May 16, the Information Office of the State Council will hold a regular briefing on the policies of the State Council at 4 p.m. on May 17, 2024 (Friday), at which the responsible persons of the Ministry of Housing and Urban-Rural Development and the Ministry of Natural Resources, the People's Bank of China, and the State Administration of Financial Supervision and Administration will introduce the relevant policies for effectively ensuring the delivery of housing.
The market expects that a "major move" in real estate may be launched at that time!
Blessings to Friday's A shares!