Hong Kong stocks fell first and then rose yesterday
The main reason is that China-US trade talks have good news. The Chinese Ministry of Commerce said that China and the United States agreed to phase out the increase of tariffs, stimulate the rise of the RMB and US debt, reflecting investors’ risk appetite. China, Hong Kong and US stocks were further strengthened.
The Hang Seng Index rushed back yesterday morning
seeing low at 27534. Because the United States came out overnight, the first phase agreement was extended to December due to the discussion of the signing location.
However, after 3 pm yesterday, China’s Ministry of Commerce spokesman Gao Feng said that China and the United States have agreed to phase out tariffs imposed on each other. The news stimulated Hong Kong stocks to close 158 points to close, closing at 27,847, with a turnover of 77.8 billion yuan.
Technically, the first day of the Hang Seng Index broke through the mid-term downtrend of the high 30280 extension in April this year. In addition, it has closed above the 27366 points of the high and low neckline for 4 consecutive days, confirming the medium-term turn to the green light, and the mid-line is expected to be 30000.
China’s Ministry of Commerce spokesman Gao Feng said that the leaders of the two sides agreed to follow the progress of the agreement and cancel the tariff increase in stages, which is conducive to stabilizing market expectations. The trade war should start with the addition of tariffs, and should also be abolished by the elimination of tariffs. As for the number of cancellations in the first phase, it can be agreed according to the content of the first phase agreement.
After the announcement of the news, the RMB slammed and the onshore RMB surged to 6.97 level (Figure 2), hitting a three-month high. China Merchants Bank analysts pointed out that the market gradually reflects the expectation of the first phase agreement between China and the United States. If the US is willing to return the tariff status to the June level, the RMB will have the opportunity to return to 6.8. My estimate is that the onshore RMB has a chance to rebound to between 6.83 and 6.94, floating around the 6.90 level.
The financial industry is open to foreign investment
In addition to the good news released by the Ministry of Commerce, the State Council also announced the loosening of foreign investment yesterday, including the full elimination of restrictions on the business scope of foreign banks, brokerages, funds and other financial institutions, allowing foreign insurance companies to set up companies in China, and canceling foreign investment in brokerage and life insurance industries next year. Shareholding restrictions. In response to the US appeal, the State Council also announced that the staff of the administrative organs must not force foreign-invested enterprises to transfer technology through administrative licensing.
China continues to release goodwill to the US and hopes to sign the first phase agreement as soon as possible. Although there is a slight delay in December, the signing opportunities are still quite large. Investors should follow up on the contents of the agreement, including the mutual cancellation of the tariffs already imposed. It is a major positive, reflecting that the situation of trade negotiations has been controlled. The tariffs of both sides are expected to be phased out. The long-term economic prospects of China and the United States will help China, Hong Kong and the US stocks continue to rise.
In fact, the US-China trade talks sent good news. After the Federal Reserve reduced the interest rate three times, the US long-term debt suffocation continued to rise. Last night, the US market rose to 1.888%. More importantly, the US Treasury yield curve (Figure 3) has been reversed from the original, and officially turned into a normal normal yesterday, that is, the longer the long-term bills or debt, the higher the yield, not only reflects the investment avoidance The risk sentiment has cooled down, and the risk appetite has rebounded. It also shows that the US economy will have an opportunity to turn from the originally predicted recession to expansion.
In this context, it is no wonder that the three major indexes of the US stock market all hit new highs. Among them, the S&P 500 index (Figure 4) has confirmed the breakthrough, the middle line turns to the green light, and the measurement increase target is 3222 points.