Under the interweaving of multiple positive factors, major global markets, including A-shares, have performed well this week, with many indices reaching historical or stage highs. Although Federal Reserve officials have once again issued hawkish signals this week, the dovish signals released by measures such as the Swedish central bank's interest rate cut and the Bank of England's continued inaction have also received widespread attention in the market.
Looking ahead to next week, multiple important economies including the United States, Germany, and the European Union will release the latest inflation data. Especially in the United States, whether it can experience a "cooling" in the context of sustained rebound in inflation data in 2024 has attracted much attention. According to some institutions, the Federal Reserve needs longer data confirmation on when to cut interest rates. In the absence of unexpected cooling in the job market, the inflation data for April and May will receive market attention.
Global major markets are facing a general upward trend
Looking back at the trend of overseas markets this week, several important global markets such as the US stock market, European stock market, and Hong Kong stock market have seen a general upward trend, with many indices reaching historical or stage high during the week, indicating a significant profit making effect in the market.
According to Wind data, in the US stock market, the Dow Jones, Nasdaq, and S&P 500 indices rose 2.16%, 1.14%, and 1.85% respectively this week. In terms of European stock markets, the Bank of England's dovish signal helped push the FTSE 100 index to continue rising. On May 10th local time, the index hit a historic high, rising 2.68% for the week; The French CAC40 index and the German DAX index both reached historic highs on May 10th local time, rising 3.29% and 4.20% respectively throughout the week.
The overall upward trend of Hong Kong stocks this week has attracted the attention of investors from all walks of life. According to Wind data, as of Friday's close, the Hang Seng Index and Hang Seng China Enterprise Index have risen by 2.64% and 2.62% respectively for the entire week, with the two major indices reaching new highs in their respective stages; Although the Hang Seng Technology Index fell slightly by 0.23% this week, the index has rebounded by over 21% in the previous two weeks, showing strong performance. The news that Hong Kong stock dividend income tax may be reduced this Friday further increased investors' positive expectations.
Regarding the reasons for the rise of the Hong Kong stock market, Guolian Securities believes that from a macro perspective, both domestic and foreign markets are in a new round of recovery cycle, with positive economic expectations and significant policy catalysis; From a micro perspective, the performance of Hong Kong stocks has rebounded, and the proportion of corporate dividends has increased. Looking ahead to the future, considering that the mid - and long-term Hong Kong stock valuation is still at a low level, the Federal Reserve's interest rate cut may catalyze the further rise of Hong Kong stocks. It is suggested to focus on the technology Internet leaders with high dividends and expanding dividends.
As for the US stock market, CITIC Securities believes that under the influence of uncertain factors such as delayed interest rate cuts and the US general election, there are currently macro factors that suppress the US stock market. The US stock market may undergo phased adjustments in the second and third quarters.
The release of US April inflation data is imminent
What are the focus points for investors next week? According to Wind data, several important economies around the world will release their latest inflation data next week, with the most closely watched being the US April CPI and PPI data, which will directly affect investor expectations.
Specifically, on May 14th Beijing time, Germany will be the first to release its April CPI data, followed by the US April PPI data; On May 15th, the United States will release April CPI data; On May 17th, the EU's April CPI data and the Eurozone's April CPI data will be released on the same day.
Since 2024, the year-on-year increase in US CPI has continued to expand, and the GDP growth rate in the first quarter was lower than market expectations. The combination of lower than expected economic growth and higher inflation has raised market concerns about the risk of US stagflation. As a result, the current market expectation for the Federal Reserve to initiate multiple interest rate cuts within the year continues to cool, with many institutions leaning towards the United States starting interest rate cuts in the third quarter or even later, and reducing the number of rate cuts to one.
Regarding when the Federal Reserve will start cutting interest rates, Bank of China Securities predicts that it will require further data confirmation. In the absence of unexpected cooling in the job market, the inflation data for April and May has attracted much attention. Secondly, September is also another important time point. Considering factors such as the unlikely slowdown of inflation starting from April, the urgency of the Federal Reserve's direct interest rate cut in September is not significant on an economic level.
Unlike the inflationary pressure faced by the Federal Reserve, just this week, the latest interest rate decisions from the Bank of Sweden and the Bank of England have sent a clear dovish signal to the market.
Following Switzerland's unexpected interest rate cut on March 31st, the Swedish central bank announced on May 8th local time that due to economic weakness, it would lower its benchmark interest rate by 25 basis points to 3.75%, marking the second shot of interest rate cuts in developed countries; Although the Bank of England continues to maintain its benchmark interest rate unchanged, according to the vote of the Monetary Policy Committee, compared to the previous vote, the number of members supporting interest rate cuts has increased by one, and the number of members supporting "staying put" has decreased by one. A hot topic in current market discussions is whether Europe will initiate interest rate cuts ahead of the Federal Reserve, and whether rate cuts by Switzerland and Sweden will affect more European central bank decisions remains to be further observed.