Market Insights: May 11th, 2024

Economic Data and Policy:

• CPI and PPI Data: In April, China's CPI shifted from a decline to an increase, with the year-on-year growth rate expanding, mainly boosted by the continuous recovery of consumer spending; although the year-on-year decrease narrowed compared to the previous month, due to the temporary drop in demand in some industries, PPI continued to slip.
• U.S. Policy towards China: The U.S. government continues to intensify its efforts to suppress China's leading industries and cutting-edge technologies, planning to impose new tariffs on China, mainly targeting key strategic sectors such as electric vehicles and solar energy equipment. In addition, the U.S. Department of Commerce has added 37 Chinese entities to its trade blacklist, citing "national security" reasons. These measures indicate the Biden administration's trend towards a tough stance on China.
• Global Central Banks' Gold-Buying Historical Data Analysis: Although global central banks' gold purchases have risen in recent years, from a long-term cycle perspective, gold's proportion of global reserves remains at a historical low. Even if central banks continue to increase gold reserves, returning to the levels of 1990 could take more than a decade.
• Adjustments in PBOC Policy: The People's Bank of China's report indicates that it will utilize the reform of the loan market quoted rates and the adjustment mechanism for the marketization of deposit rates to promote a steady reduction in financing and credit costs for enterprises and residents. Several banks have agreed to lower deposit rates, leading to the gradual disappearance of high-interest deposit products.

International Politics:

• US Presidential Election Forecast: With about 6 months left until the November U.S. presidential election, polling institutions are trying to accurately analyze support for former President Trump. Trump's unexpected victory over Hillary Clinton in 2016 has attracted significant attention, and his supporters have consistently avoided opinion polls, adding uncertainty to the forecasts.

Commodity Markets:

• Commodity Price Fluctuations: Prices of commodities such as crude oil, gold, London copper, London tin, and Bitcoin have been volatile. Gold prices reached a three-week high, while Bitcoin prices experienced short-term fluctuations.
• Performance of Chinese Concept Stocks: During the U.S. stock market session, Chinese concept stocks saw a decline, but some individual stocks showed gains. In the Chinese stock market, the Shanghai Composite Index closed slightly higher, while the offshore Renminbi fell.

Consumer Confidence and Economic Outlook:

• Michigan Consumer Sentiment Index Decline: The May Michigan Consumer Sentiment Index in the U.S. unexpectedly plummeted, setting a record low. Consumer short-term inflation expectations rose sharply, and long-term inflation expectations also showed an upward trend, causing market concerns that inflation might rebound.

Financial Markets:

• Performance of U.S. Stocks: The Dow Jones Industrial Average rose for 8 consecutive days, achieving its best performance since December last year. The S&P 500 Index and the Nasdaq Composite Index showed relatively stable performances.
• Performance of European Stock Markets: The Stoxx Europe 600 Index rose again, reaching an all-time high, with a cumulative increase of 3%. The UK's FTSE 100 Index, France's CAC 40 Index, and Germany's DAX Index also reached record highs, with significant gains.

Financial Markets:

• Futures Concept Sector: The futures concept sector rose by 0.63% compared to the previous trading day. Regarding the flow of funds, the net inflow from main funds was 895.87 million yuan, from speculative funds was 2843.76 million yuan, while retail funds saw a net outflow of 3739.63 million yuan.