This week’s trading notes: The US August non-farm payrolls report will be released soon, and China’s August official manufacturing, non-manufacturing and composite purchasing managers’ index (PMI), and US ISM reports will be released one after another. At the same time, the consumer price index (CPI) of the euro zone in August will also be announced. In addition, some US companies and Chinese concept stocks will announce their earnings this week, including Hewlett-Packard (HPQ-US), Hewlett Packard Enterprise (HPQ-US) , Broadcom (AVGO-US), Baidu (BIDU-US) (9888-HK), etc., while BYD (002594-CN) announced the first half of the transcript.
This week’s trading notes (0829-0902)
1. US non-farm payrolls report for August
Federal Reserve Chairman Jerome Powell reiterated his hawkish stance in a speech at the annual meeting of global central banks in Jackson Hole on Friday, saying high interest rates will continue for some time and warning against historical experience. Easing policy early, even if short-term inflation data improves, it does not mean that inflation is really showing signs of falling, and the pace of interest rate hikes will not stop until there is a definite signal of decline.
Although inflation has shown signs of cooling recently, the data is still far above the Fed’s target level, and the future outlook is still not too optimistic. At the same time, the US job market is still strong. If the August non-farm payrolls report is still solid, it may increase the confidence of the Fed to raise interest rates aggressively. The market expects non-farm payrolls to increase by 290,000 in August from 528,000 in July.
In addition, the ADP employment report, known as the “small non-agricultural” report for nearly two months, will be released this Thursday (September 1) after adjusting the calculation model. On the same day, the United States received unemployment benefits at the beginning of last week. The number will also be released, the number of people receiving unemployment benefits at the beginning of the previous week has fallen for two consecutive weeks, indicating that the labor market is still quite good.
2. U.S.-China manufacturing boom
China will release the official manufacturing, non-manufacturing and composite PMIs for August, which will provide a glimpse into the reality of China’s economic growth. Previously, in order to boost the domestic weak economy, China spent a lot of money and launched a package of stimulus measures. Chinese technology stocks such as Alibaba (BABA-US), JD.com (JD-US), and Baidu (BIDU-US) are expected to benefit. Shares rose last week, and China’s electric vehicle stocks also saw rain and rain, with NIO (NIO-US), Li-US (LI-US), and Xiaopeng Motors (XPEV-US) rising together.
U.S. business activities are sluggish, and the ISM manufacturing index released in July fell to 52.8. Although higher than the expected 52, it was still lower than the 53 in June. It has declined for two consecutive months and continued to hit a new low since June 2020. , the ISM manufacturing index, which will be released on Thursday, is expected to be slightly lower than the previous value at 52.6.
3. Eurozone CPI
The euro zone will announce the initial value of the consumer price index (CPI) for August on Wednesday (31st), which is expected to be 9% and the previous value of 8.9%. Last week’s data showed that the euro zone’s composite PMI remained below the line of prosperity and decline for two consecutive months, economic sentiment continued to decline, recession fears intensified, and the European Central Bank’s (ECB) future rate hike path will be more difficult. fell to a 20-year low.
On the other hand, preliminary readings of consumer confidence in the euro zone unexpectedly rebounded in August, but remained below levels during the COVID-19 pandemic, as rising living costs weighed on households and energy shortages hit economic activity.