Forget A-shares? US Stocks Hit New Highs
How far is it from heaven to hell? The A-share market tells you, it's just a three-day journey.
The new investors who rushed to open accounts and enter the market before the holiday have been taught a harsh lesson. And the old investors who recently frantically sold off US stocks and rushed into A-shares also have their own hardships, because the US stocks have once again hit historical highs.
On Thursday, the US inflation data for September was unexpectedly strong.
The inflation rate rose 2.4% year-on-year, higher than the expected 2.3%.
Excluding the core CPI data with large fluctuations in food and energy costs, it rose 3.3% year-on-year, also higher than the expected 3.2%.
As of the week of October 5, the number of initial jobless claims in the United States rose to 258,000, higher than the expected 230,000.
Overall, the US economy continues to grow strongly, and the inflation rate cannot fall in the short term, so it cannot achieve the Federal Reserve's inflation target, making it more difficult for the Federal Reserve to lower interest rates.
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The market has discussed the possibility of the US economy being "unable to land", that is, due to the economy maintaining strong growth for a long time, the inflation rate exceeding the target will exist for a long time.
On that day, the three major US stock indexes closed lower, with the Dow Jones Industrial Average down 0.14%, the Nasdaq down 0.05%, and the S&P 500 index down 0.21%.On the same day, the Shanghai Composite Index of A-shares rose by 1.32% under the protection of blue-chip stocks, but the ChiNext Index fell by 2.95%.
On Friday, data released by the U.S. Department of Labor showed that the U.S. final demand Producer Price Index (PPI) for September remained unchanged month-on-month, after a survey indicated that economists expected the index to rise by 0.1%. The data revealed relatively moderate inflation in the United States, which apparently strengthened investors' expectations that the Federal Reserve will continue to cut interest rates in November.
On the other hand, strong quarterly earnings reported by U.S. banks, with Morgan Chase, Wells Fargo, and BlackRock all exceeding analysts' expectations in their quarterly profits.
The S&P 500 Financial Services Index rose by 1.95%, and the S&P 500 Bank Index rose by 4.2%, with the U.S. financial sector seeing a significant increase across the board.
Evan Brown, Portfolio Manager and Head of Multi-Asset Strategy at UBS Asset Management, said: "We have received some good earnings reports from some leading financial companies, which is a good start for the earnings season." He believes that this is a good sign for the U.S. economy.
Evan continued to add, "When the financial industry performs well, this is what a soft landing looks like. This is a positive overall signal for the economy and sets a positive tone for the earnings releases of other industries in the coming weeks."
After this week's data release, the FedWatch tool of the Chicago Mercantile Exchange showed that the market believes there is about an 88% chance that the Federal Reserve will cut interest rates by 25 basis points at the November meeting, and a 12% chance of keeping interest rates unchanged.
It seems that the U.S. stock market bull market is not over.
As of Friday's close, the Dow Jones Industrial Average rose by 0.97%, the S&P 500 rose by 0.61%, and the Nasdaq rose by 0.33%. The Dow and the S&P 500 have once again set new historical highs!Looking back at Friday's A-share market, the Shanghai Composite Index fell by 2.55% with the support of securities stocks, the ChiNext Index fell by 5.06%, and the Shenzhen Component Index fell by 3.92%.
For the whole week, the S&P 500 Index rose by 1.1%, the Dow Jones Index rose by 1.2%, and the Nasdaq Index rose by 1.1%. All three major indices have risen for five consecutive weeks, and the US stock market has indeed shown the characteristics of a slow bull market.
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