During the Chinese New Year holiday, Chinese assets are in full bloom. On February 19, the A-share market will start trading in the the Year of the Loong. Industry insiders say that A-shares are expected to receive a "red envelope" for the opening.
Affected by the expected decrease in interest rate cuts by the Federal Reserve, the three major stock indexes in the United States saw a comprehensive adjustment last week, ending the previous five consecutive weeks of upward trend. This week, the Federal Reserve will release the minutes of its January monetary policy meeting, and multiple Federal Reserve officials will give speeches, from which investors can obtain guidance on Federal Reserve policy.
This week, Nvidia, Wal Mart, Ctrip, Nestle, Mercedes Benz, etc. will release their latest financial reports. Among them, the performance of Nvidia, the leading technology stock market leader in this round, has attracted market attention. Industry insiders say that as a barometer of the artificial intelligence boom, Nvidia's performance directly determines whether this boom can continue.
Institutional expectations
A-shares are expected to have a "good start"
On February 19, the A-share market will start trading in the the Year of the Loong.
During the Chinese Spring Festival holiday, Chinese assets performed well. Among them, the Nasdaq China Golden Dragon Index surged 5.75%; In terms of Hong Kong stocks, the Hang Seng Index rose 2.91%, the Hang Seng China Enterprise Index rose 3.71%, and the Hang Seng Technology Index rose 5.50%; The FTSE China A50 index futures rose 1.82% and reached a new high in over two months.
Industry insiders believe that A-shares have started a continuous rebound before the Spring Festival, with a strong upward atmosphere. During the long holiday, Hong Kong stocks, Chinese concept stocks, and FTSE China A50 index futures have all strengthened comprehensively. Moreover, during the Spring Festival, strong domestic consumption data has strengthened investors' expectations for a better recovery prospect, which will help A-shares continue to rise after the holiday.
Regarding the recent performance of Hong Kong stocks, private equity tycoon Dan Bin said, "Hong Kong stocks have surged, and it is estimated that A-shares will also have a good start on Monday!"
In terms of historical performance, Wind data shows that from the first trading day after the Spring Festival in the past 10 years, the Shanghai Composite Index has risen six times, with a probability of a 60% increase. From the perspective of price fluctuations, except for the first trading day after the 2020 Spring Festival holiday, which saw a significant decline, most other years saw a large increase in price while a smaller decrease.
According to a research report by CICC, based on the performance of major markets, especially the Hong Kong stock market, during the long holiday period, as well as good holiday travel and consumption data, investor sentiment is expected to continue to improve, and A-shares are expected to have a "good start" after the holiday.
In addition, investors are full of expectations for the People's Bank of China to further relax its policies.
On February 20th, the central bank will release the February LPR quotation. On February 18th, the central bank continued to issue 500 billion yuan of MLF at incremental parity. Although the MLF interest rate remained unchanged in February, some analysts still believe that the LPR will decrease.
The Federal Reserve's statement this week received attention
Last week, the US stock market index fell 0.11%, the S&P 500 index fell 0.42%, and the Nasdaq fell 1.34%.
Last week's release of the US CPI and PPI inflation data both showed higher than expected growth rates, indicating that US inflation has not continued to cool as expected by the market. American financial journalist Nick Timiraos pointed out in an article that the higher than expected US CPI has disappointed investors who hope the Federal Reserve will cut interest rates soon.
Industry insiders say that the above two major inflation data indicate that there is still too much uncertainty in the direction of prices, and the Federal Reserve is unlikely to relax monetary policy. The market currently believes that the possibility of the Federal Reserve cutting interest rates at its meetings in March and May is very low, and June is the starting point of the Federal Reserve's rate cutting cycle.
At 3am Beijing time on Thursday, February 22nd, the Federal Reserve will release the minutes of its January monetary policy meeting. On that day, Federal Reserve Director Jefferson will give a speech.
The next day (February 23), Federal Reserve directors Bowman, Lisa Cook, and Waller will also give speeches.
Previously, Federal Reserve Chairman Powell stated that Federal Reserve officials would like to see more evidence that inflation is returning to the target of 2%. Investors can seek more clues about the future policy direction of the Federal Reserve from the public speeches of senior Federal Reserve officials this week.
In addition, on February 19th, the US stock market was closed for one day on President's Day, and the trading of precious metals and US crude oil futures contracts under the Chicago Mercantile Exchange (CME) ended earlier than 03:30 Beijing time on February 20th.
Looking ahead to the future of the US stock market, Jiaxin Wealth Management believes that the biggest highlight of the market in the next week will be Nvidia's financial reports. If Nvidia's performance falls short of market expectations, it will become a catalyst for profit taking in technology stocks, especially in the fields of artificial intelligence and chips. With the further rise in the yield of US treasury bond bonds, it is doubtful whether US stocks can still rise.
Nvidia to release financial report
The US stock market earnings season is nearing its end. This week, Nvidia, Wal Mart, Ctrip, Nestle, Mercedes Benz, etc. will release their latest financial reports.
After the US stock market closes on Wednesday (early Thursday morning Beijing time), AI leader Nvidia, which has attracted market attention, will announce its latest quarterly results.
During the Spring Festival holiday, the Sora, a cultural video model, was stunningly released. Previously benefiting from the AI craze, Nvidia, the "number one chip company", has continued to soar since 2023, soaring 239.02%. As of the close on February 16, it has accumulated a 46.63% increase, with a new total market value of $1793.5 billion, surpassing Amazon (the latest total market value of $176.8 billion) and Google (the latest total market value of $1747.1 billion), becoming the third largest company in the US stock market after Microsoft and Apple. Bank of America, Goldman Sachs, and Morgan Stanley have all raised Nvidia's target price, and Loop Capital has set an all-time high target price of $1200 per share.
Industry insiders believe that the quality of Nvidia's financial performance will determine whether technology stocks will experience profit taking or start a new round of market trends in the future.
February PMI data from multiple countries will be released
In addition to focusing on China's February LPR quotation, the minutes of the Federal Reserve's January monetary policy meeting, and the financial reports of companies such as Nvidia, there are also heavyweight data to be released this week, including the minutes of the European Central Bank's January monetary policy meeting, the final value of the Eurozone's January CPI data, and the PMI data of multiple countries in February.
On Thursday, February 22nd, the minutes of the January monetary policy meeting of the European Central Bank and the final value of the January CPI data for the Eurozone will be released. The European Central Bank kept its benchmark interest rate unchanged at 4.5% in January this year, and the market expects it to start cutting interest rates this year, with the earliest possible date of cut being April.
On February 22nd, the United States will release the initial values of Markit's services, manufacturing, and comprehensive PMI for February. On that day, France, Germany, and the eurozone will also release February manufacturing, service, and comprehensive PMI data.
In addition, on February 22nd, the Bank of Korea will announce its latest interest rate resolution.