Asian stocks had a day, with Indonesia up more than 2%, while Japan, Pakistan, South Korea, Taiwan and Thailand rose more than 1%.
In early trading, the foreign-traded CNH renminbi fell against the U. S. dollar, ending at 7. 29 and hitting an intraday low of 7. 31 since yesterday’s close of 7. 28. US Treasury yields fell overnight, so the move appears to be driven by interest rate differentials as the likelihood of a 0. 25% easing from the Federal Reserve’s basis point in December remains high.
President Trump’s recent peak risk of price lists one hundred percent opposed to BRICS countries preventing the U. S. dollar would have possibly existed (isn’t Bitcoin anti-U. S. dollar?). The main likely culprits are the consequences of the euro’s poor functionality. against the US dollar yesterday, due to a likely maximum rate cut by the ECB and the recent appreciation of the yen against the US dollar.
Mainland China and Hong Kong recovered in the morning industry before the China Economic Work Conference (CEWC) dates were shown for December 11-12. They are expected to reaffirm that the GDP target for 2025 is “around” 5%, with a maximum estimate of a change of 4. 5% to 5% and an increase in the budget deficit of between 3. 5% and 4%.
Foreign investors’ concentration on “domestic consumption” fails to realize past housing stimulus/support measures, and local governments are implicitly consumption-driven. There is no date for the Politburo meeting, some say a position will be taken this weekend.
China’s Citigroup Economic Surprise Index continues to rise, and primary indices in Hong Kong and mainland China rose after the post-stimulus pullback. Hong Kong-listed web stocks had a bright day, with the exception of Meiutan, which fell -1. 14% after recording some profit-taking following a strong year-to-date rally. JD. com also fell -1. 36% despite the luck of subsidies for the purchase of household appliances. Baidu gained +1. 51% as Hong Kong approved its robotaxis, while Tencent gained +1. 15% and Alibaba gained +0. 54% as both companies’ buyback systems continued.
Mainland China-listed semiconductor and growth stocks were hit with profit taking while value sectors outperformed in Hong Kong in a “revenge of the nerds” (slow growth/value sectors outperformed growth stocks and sectors), though Hong Kong-listed internet stocks had a decent day. The outgoing Biden Administration’s Department of Commerce added 136 Chinese firms to the Entity List, which restricts US technology exports. The Chinese government retaliated by banning the export of gallium, germanium, antimony, and super hard materials, which are predominantly used in the manufacturing of semiconductors, according to Reuters. The China Semiconductor Industry Association, China Internet Association, China Association of Automobile Manufacturers, and the China Communications Enterprise Association released statements that their members should be “prudent” or “cautious” when buying US-made semiconductors due to the potential unreliability of further shipments.
The US government has added more than 130 corporations to its “entity list” of foreign corporations subject to additional licensing requirements. Many of the China-based corporations that were added indicated that adding to the entity list was not due to their domestic concentration. about China. I haven’t seen any studies on how or if this might affect US semiconductor corporations whose revenues have a higher exposure to China. I don’t need to emphasize this too much because, in theory, it would be easy to remove the new regulations as an art of the deal. 22 The provinces have announced a total of RMB 1. 673 trillion in hidden debt refinancing.
The Hang Seng and Hang Seng Tech indexes gained +1.00% and +0.27%, respectively, on volume down -13% from yesterday, which is 98% of the 1-year average. 324 stocks advanced, while 159 declined. Main Board short turnover decreased by -41% from yesterday, which is 87% of the 1-year average, as 14% of turnover was short turnover (Hong Kong short turnover includes ETF short volume, which is driven by market makers’ ETF hedging). Value and small capitalization stocks outperformed growth and large capitalization stocks. The top sectors were energy, up +2.05%, financials, up +2.01%, and utilities, up +2%, while consumer staples fell -0.18%. The top sub-sectors were petroleum, banks, and utilities, while electrical equipment, semiconductors, and industry conglomerates were the worst. Southbound Stock Connect volumes were back to pre-stimulus levels as Mainland investors bought $37 million of Hong Kong stocks and ETFs with Alibaba’s moderate net buy, Hong Kong Tracker ETF a moderate/large net sell, Meituan a moderate/small net sell, Tencent and CNOOC were small net sells, and Xiaomi a very small net sell.
Shanghai, Shenzhen, and the STAR Board diverged to close +0.44%, -0.14%, and -1.04%, respectively, on volume the declined -3.94% from yesterday, which is 174% of the 1-year average. 2,315 stocks advanced, while 2,593 declined. Value and large capitalization stocks outperformed growth and small capitalization stocks. The top sectors were utilities, up +1.26%, energy, up +0.95%, and financials, up +0.78%, while technology fell -1.32%, healthcare fell -0.58%, and real estate fell -0.44%. The top sub-sectors were land transportation, banking, and marine, while office supplies, computer hardware, and catering/tourism were the worst. Northbound Stock Connect volumes were above average. CNY fell while the Asia dollar index made a small gain versus the US dollar. Treasury bond prices fell. Copper and steel gained.
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CNY consistent with $7. 28 to $7. 27 yesterday
CNY consistent with EUR 7. 66 7. 65 yesterday
10-year bond yield 1. 99% vs. 1. 98% yesterday
Chinese Development Bank 10-year bond yield was 2. 07% to 2. 07% yesterday
Copper value +0. 47%
Steel 0. 51%
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