Rate Cut Missed, State Buys Boost Stocks, WuXi Surges Over 11%

• Article
• 2024-08-09
• 19 Comments

Here is the translation of the provided text into English: "Every day we hear about 'increasing macroeconomic efforts,' 'a batch of incremental measures being introduced in due time,' and 'reducing the cost of loans for residents.'

However, the expected interest rate cut that has been circulating for a week turned out to be a letdown.

The central bank still has its resolve.

Previously, there was an excuse to protect the exchange rate, but now that the Federal Reserve has cut rates, we are still holding back on a big move.

The market is definitely disappointed.

So, despite the Hong Kong stock market's five consecutive days of gains, the A-share market rose for one day yesterday and then stalled today.

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There was a plunge during the midday session, but the national team bought from two o'clock until the market closed.

This is the most determined day I've seen the national team buying recently; they were relentless until the market turned red.

Speaking of the exchange rate, I can't help but laugh.

Because the central bank did not cut rates today, the offshore yuan directly broke through 7.05.

However, too much appreciation of the yuan is not good either, as it is detrimental to exports.

Let's look at today's big news: The US economy still has resilience.

The Fed's rate cut of 50 basis points this time is more of a compensation for not cutting rates in July, reducing the possibility of a recession.

As mentioned before, the core of the US dollar, US stocks, and the US economy is AI.

Modern credit is an expectation of future income.

If AI can indeed bring about a new industrial revolution and help the US improve total factor productivity, the US's credit will naturally be significantly strengthened.

Money printing and deficits will not be an issue.

As long as the AI narrative continues, capital will keep flowing (the White House has already established an artificial intelligence data center infrastructure working group), making it difficult for the US economy to fall into a recession, and the US stock market bull market will be hard to end.

However, there is no need to be disheartened, as it has been announced that a rate cut will eventually come.

Moreover, although there was no rate cut, the A-share market today did not reach a point of despair, indicating that it is really hard to fall further, and what is missing is the momentum to rise.

Stimulated by this news, the A-share communication equipment sector soared directly, with Hytera Communications opening at its upper limit and achieving two consecutive boards.

Coincidentally, Hytera Communications was banned by the US as early as April this year.

Is this an obvious intention?

It was reported that on September 19th, the official website of the US Senate Armed Services Committee announced that the Senate version of the NDAA included 93 amendments, none of which included a biosafety proposal.

The absence of the biosafety bill in the NDAA means that the legislative expressway has failed.

Since the House version of the NDAA did not include a biosafety proposal, and now the Senate version also does not include it, it means that the path for the FY2025 NDAA to carry the biosafety proposal is not viable.

Finally, let's take a brief look at the market.

As of the close, the Shanghai Composite Index rose slightly by 0.03%, the ChiNext Index fell by 0.64%, the Hong Kong Hang Seng Index rose by 1.36%, and the Hang Seng Technology Index rose by 1.43%.

The turnover of the two markets shrank to 0.57 trillion, with over 3,400 stocks falling.

Looking at industries, real estate, computers, non-ferrous metals, home appliances, and banking industries led the gains."