Market Insights: March 1st, 2024

Stock Market Update:

• Indices saw fluctuations and then moved higher after the opening on Friday, with more stocks rising than falling. The Shanghai index increased by 0.06%, closing at 3017.00 points; the Shenzhen Component Index rose by 0.53%, to 9379.87 points; and the ChiNext Index went up by 0.14%, to 1809.51 points.
• Sectors such as consumer electronics, liquid cooling servers, CPO, and automotive chips were among the leaders, while artificial meat, diversified finance, diet drugs, and civil airports sectors faced setbacks. More than 3000 stocks rose in both markets, with the transaction volume reaching 345.5 billion yuan in just half an hour.

International Financial Markets:

• Ray Dalio, founder of Bridgewater Associates, noted that US stocks are at relatively reasonable valuation levels, without excessive bubbles. However, he warned that stock prices could undergo a significant pullback if AI technology doesn't meet expectations.
• US Treasury yields spiked following the release of the PCE (Personal Consumption Expenditures Price Index), leading to yields erasing their gains and turning downward, especially the two-year yield which hit a new one-week low, despite having shown a rise of over 40 basis points in February.
• Bitcoin's price fell by more than $3000 during the session, breaking through the critical support level of $61,000, ending a high trend lasting more than two years. Nonetheless, February saw a cumulative increase of over 40%, marking the largest monthly rise in over three years.
• Last Wednesday, Coinbase, the largest cryptocurrency exchange in the US, experienced an outage, causing severe fluctuations in the price of Bitcoin, which briefly surged to $64,000 before dropping by $5000.
• Two senior executives of Binance, the world's largest cryptocurrency exchange, were detained in Nigeria.

Chinese Market:

• The Shanghai index rose nearly 2%, breaking back above the 3000 point mark, with the semiconductor industry chain making gains across the board and Northbound funds recording a net purchase amount, hitting a seven-month high.
• Chinese concept stocks listed in the US generally fell, but still saw an overall increase of more than 10% in February. NetEase's shares fell nearly 4% following its financial report, while XPeng and NIO showed strong performance.
• In February, the manufacturing PMI was 49.1%, a decrease of 0.1 percentage points from the previous month; the non-manufacturing business activity index was 51.4%, up 0.7 percentage points from the previous month; the comprehensive PMI output index was 50.9%, remaining unchanged from the previous month, indicating the overall economy continues its expansion.

Global Economic Policy:

• Federal Reserve officials expressed no rush to cut interest rates, suggesting it may be appropriate to begin easing this summer.
• Reports indicate that Federal Reserve Governor Waller is likely to become the next Chair of the Federal Reserve.
• Bank of Japan officials signaled a potential rate hike, stating that achieving the inflation target is in sight and considering exiting current flexible monetary policy measures.

Corporate Updates:

• Alibaba Cloud announced significant price cuts, reducing the official website prices of cloud products across the board, with an average reduction exceeding 20%.
• Dell's financial report highlighted outstanding performance in its high-performance server business amid a continued slump in the PC market, driving the company's fourth-quarter financial results.
• Citigroup will lay off 286 people in New York, as the bank undergoes its largest reform in decades.

Legal and Regulatory:

• A-share listed company *ST Hongxiang is suspected of financial fraud and other illegal activities, facing fines of more than 20 million yuan;
• SinoWealth is under investigation for suspected illegal information disclosure violations.