On Friday, the US east time, with multiple information stimulation, the three major stock indexes of the US rose sharply, with the S & P 500 up 0.97%, the NASDAQ up 1.13%, and the Dow up 1.11%, among which the S & P 500 and the NASDAQ reached a record high.
Good first: the US non farm report in October was good. On Friday, the U.S. non farm report showed that the number of non farm workers rose 128000 in October, far exceeding the expected 89000, and the number of non farm workers revised to 180000 in September. The U.S. unemployment rate was 3.6% in October, in line with expectations, and remains at a nearly 50-year low.
In the context of weak investment and tight trade, the unexpectedly strong employment report data undoubtedly boosted the confidence of US stock investors, because the increase of employment population can promote consumers to continue spending and economic expansion.
Good second: new progress has been made in trade negotiations, and China and the United States may soon sign some agreements. Last night, the heads of the China US trade negotiations spoke to each other, and the two sides had a serious and constructive discussion on how to properly address their core concerns, and reached a consensus in principle. The two sides discussed the next negotiation arrangement.
Trump also said on twitter that China and the United States are choosing a new location to sign the first phase of the trade agreement, accounting for about 60% of the total agreement. The new location will be announced soon.
Good third: earnings data of several giant companies exceeded expectations. So far, more than 300 S & P 500 companies have reported quarterly results, 75% of which are better than expected.
Apples revenue exceeded analysts expectations, saying it would bet 5g next year and plan to ship 80 million 5giphones in 2020. Apple shares closed 2.84% higher on Friday, hitting a new all-time high with a total market value of more than $1.13 trillion. Food giant Kraft Heinzs adjusted earnings per share and EBITDA are higher than market expectations. The revenue of LYFT and Starbucks also exceeded expectations.
Good fourth: this week, the Federal Reserve cut the federal funds rate for the third time in the year. The Fed cut interest rates by 25 basis points three times in 1975, 1996 and 1998 respectively. According to statistics, the S & P 500 index rose by 10% in the following six months and 20% in one year.
The risk of US stocks rising is increasing
The American Association for supply management pointed out that the chemical manufacturing industry is in a downturn, the demand of many markets around the world has declined, and the price has declined accordingly. 12 of the 18 industries fell into contraction in October, and the customer demand has declined. It is expected that the fourth quarter will be very weak, and the first quarter of next year will not be greatly relieved. The economy is showing slight signs of weakness. Ism, the American Association for supply management, said the data showed the U.S. economy was still in a downward range.
Richard Clarida, vice chairman of the Federal Reserve, suggested on Friday that the threshold for further interest rate cuts is very high, and it will be difficult to cut interest rates again in the short term, which will limit market liquidity to some extent, and is not conducive to us risk assets. Although the survey data are moving in the right direction, the overall situation is still very moderate growth and cautious optimism. There are also concerns that impeachment of the president will have a negative impact on financial markets.
The rise of US stocks has a lot to do with the improvement of trade situation, the Feds interest rate cut and strong employment data. However, after these benefits are digested, with the impact of factors such as higher valuation of US stocks, slower repurchase speed and amount, increasing uncertainty of global economy, and less than expected data of US manufacturing industry, the risk of US stocks rising is increasing.
A share value depression highlights the acceleration of capital inflow in the North
Despite record highs in US equities, US investor confidence fell further in October. With the increasing valuation of US stocks and the pressure of medium and long-term growth that hasnt dissipated, its not good for us risk assets, and hedging assets such as gold and silver havent declined significantly.
Against the background of global risk assets collective improvement and higher valuation, the advantage of value depression of A-share will be highlighted, attracting the attention of foreign institutions funds. This week, capital inflows to the north of China reached 23 billion yuan.
Stock markets in India, Brazil and other countries hit new highs
This week, stock markets across the world rose. This week, the sensex30 index in Mumbai, India, hit a record high, rising 2.83% on a weekly basis; the ibovespa index in Sao Paulo, Brazil, hit a record high on a weekly basis; the RTS index in Russia reached a new high of nearly five years, rising 2.41% on a weekly basis; and the CAC40 index in France reached an 11 year high.
Statement: all information content of data treasure does not constitute investment advice. The stock market is risky and investment should be cautious.