Market Insights: Jan 19th, 2024

Chinese Stock Market and Economic Data

1. A-share market performance: The Shenzhen Component Index and the ChiNext Index turned green, with gains leading in the gaming, media, and semiconductor sectors, while finance, coal, and shipping sectors showed the biggest declines.
2. National Bureau of Statistics releases 2023 data: China's gross domestic product grew by 5.2%, with the primary industry increasing by 4.1%, secondary industry by 4.7%, and tertiary industry by 5.8%.
3. Growth in premiums for the top five A-share insurers: Last year’s premiums increased by 5.2% year-over-year, with optimism for this year’s "start-of-year" performance.
4. Broad-based ETF share growth: Multiple broad-based ETFs show continuous high volume transactions, indicating signs of major funds entering the market.
5. Export tax rebates support foreign trade companies: In 2023, the total amount of export tax refunds (exemptions) in Yiwu reached 12.071 billion yuan, up 14.78% year-over-year.
6. Guangdong's foreign trade accounts for 19.9% of the national total: In 2023, the total value of foreign trade imports and exports reached 8.3 trillion yuan, up 0.3% year-over-year, maintaining its position as China's largest foreign trade province.

Global Economy and Stock Market Dynamics

1. Bank of Japan's negative interest rate policy: Japan’s CPI inflation slowed down in December largely as expected, and analysis suggests that the Bank of Japan will maintain its negative interest rate policy next week.
2. European Central Bank monetary policy: Officials are concerned that easing policy too soon might undermine anti-inflation efforts, hence they prefer to maintain higher interest rates for a while longer.
3. Stock market performance: The S&P 500 Index rose 0.9%, the Nasdaq Composite Index climbed more than 1.3%, and the Dow Jones Industrial Average increased approximately 0.5%.

Technology and Industry Dynamics

1. TSMC Q4 earnings report: TSMC anticipates continued revenue growth in its Q4 report, with AI-driven high demand for chips pushing AMD and Nvidia shares to new highs.
2. Pilot applications for intelligent network-connected vehicles: The Ministry of Industry and Information Technology and other departments issued a notice focusing on "vehicle-road-cloud integration" collaborative development, promoting the construction of a series of city-level application pilot projects.
3. Apple's stock price rises: Apple's shares gained nearly 3% following an upgrade from Bank of America.
4. Plug Power stock falls: After announcing a possible $1 billion stock offering plan, stock prices sharply declined.

Specific Stock Market Events

1. New stock listings: Yongxing Shares on the Shanghai Stock Exchange's mainboard and Kangnong Seeds on the Beijing Stock Exchange went public. Yongxing Shares focuses on waste incineration power generation, while Kangnong Seeds specializes in the research, production, and sale of hybrid corn seeds.
2. Restricted shares unlocked: A total of 13 companies will lift restrictions on restricted shares, with a total of 1.455 billion shares being unlocked, valued at approximately 29.896 billion yuan.
3. Central bank reverse repo expires: The 27 billion yuan 7-day reverse repo operation conducted on January 11th will expire today.

Other Economic Indicators

1. Nikkei 225 index fluctuations: Recently, the Nikkei 225 index experienced significant volatility, causing large premiums in the trading prices of some cross-border ETFs managed by public funds.
2. In December of last year, the yuan's share of international payments was 4.14%, ranking fourth in the world; in trade finance, it accounted for 5.07%, ranking third. During the same period, the value of yuan payments decreased by nearly 12% month-over-month.

Market Analysis and Forecast

1. Goldman Sachs' forecast for small-cap stocks: Goldman Sachs predicts that the small-cap stock index will rise by 15% over the next 12 months.
2. Mortgage interest rates decline: The average rate for a 30-year loan dropped to its lowest in seven months, which may encourage homebuyers to re-enter the market.