Two weeks ago, the Bank of Japan and the US Treasury jointly intervened in the USD/JPY exchange rate, but the yen bulls failed to hold their ground. The non-farm payroll data released last Friday showed an unexpected decline in US employment for July, with the previous two months' job growth figures also being significantly revised downward, weakening financial market expectations for a Fed rate hike next month.
Additionally, Fed Chairman John Williams insisted that the 2% inflation target is non-negotiable, and federal funds futures indicate a slightly above 50% probability of a rate hike in September. Against this backdrop, the CPI data released tonight is particularly crucial. The trading desk at JPMorgan Chase stated that the CPI data could cause the S&P 500 to fluctuate by as much as 2% on the day. The just-released data is as follows: The US unadjusted CPI annual rate for July came in at 3.4%, the smallest increase since March, fully in line with market expectations. The US seasonally adjusted CPI monthly rate for July recorded 0.1%, returning to positive territory and meeting market expectations. The US unadjusted core CPI annual rate for July registered 2.5%, the smallest increase since February, matching market expectations. The US seasonally adjusted core CPI monthly rate for July was 0.2%, also in line with market expectations. Source: Jin Shi Data.
While the in-line CPI data remains above the Fed's target, it is moving in the "right direction." The relatively modest 0.2% month-on-month increase in core inflation provides the Fed with some greater flexibility when discussing whether to raise rates in September. This report may not be a "all-clear" signal. While commodity prices are indeed falling and housing costs are also declining, services inflation excluding housing remains stubborn. Job growth is slowing, yet inflation remains elevated. The uncertainty surrounding a rate hike at the September meeting remains significant. Key events to watch next include the Jackson Hole central bank symposium and the August employment report.
///The primary catalyst for the recent gold rally has been the shift in expectations for US monetary policy. The rare weakness in the US labor market data, with the unexpected negative growth in July non-farm payrolls and the significant downward revisions to the previous two months, has led the market to sharply reduce the probability of a Fed rate hike in September. The US dollar came under pressure, US bond yields retreated from highs, and gold prices received a strong boost. Concurrently, the phased progress in US-Iran talks regarding the Strait of Hormuz triggered a sharp drop in oil prices, alleviating energy inflation concerns and opening up space for further cooling of rate hike expectations.
Furthermore, gold's recent upward break above the $3,900-$4,200 range also represents a concentrated release of accumulated bullish momentum. As of before the CPI data release, spot gold in London had risen to near $4,400 per ounce. In the short term, gold may still experience some volatility influenced by economic data, geopolitical disturbances, and US bond yields. From a current perspective, however, gold may have gradually formed a cyclical bottom, and the likelihood of starting a new round of upward movement is increasing. Global central bank gold purchases remain a structural support for gold: The People's Bank of China increased its gold reserves to 76.08 million ounces in July, adding 640,000 ounces (approximately 19.9 tons) in the month, the highest single-month increase since November 2023 and the 21st consecutive month of accumulation since resuming purchases in November 2024. After a 13-year hiatus, the Bank of Korea has resumed physical gold purchases. The Bank of Korea announced plans to increase gold's share in foreign exchange reserves over the medium to long term, introduce a new channel for purchasing gold from domestic producers for export, and begin buying US-listed gold-backed exchange-traded funds (ETFs).
Looking at the medium to long term, factors such as fiscal deficits, geopolitical tensions, and currency concerns continue to support gold demand. Investors may consider paying attention to the Gold ETF (518800) to capture gold's medium to long-term allocation value.
///Returning to the A-share market, all three major indices closed higher today. By the close, the Shanghai Composite Index stood at 3946.68 points, up 0.32%; the Shenzhen Component Index rose 1.09%; the ChiNext Index gained 1.49%; the STAR 50 increased by 1.61%; and the ChiNext 50 rose by about 1.73%. Over 4,100 stocks advanced across the market. The total A-share market turnover for the day was 2.17 trillion yuan, compared to 2.34 trillion yuan the previous day. At the sector level, communication equipment and optical modules led the gains; energy cyclical sectors like oil and gas exploration and coal were relatively weak. Source: Wind.
After the overseas risk appetite declined yesterday and growth and resource sectors corrected together, funds today showed a greater inclination to flow back into the main themes of AI computing hardware and independent technology, resulting in a repair structure for the indices. The market bottom has likely already formed. As previous market concerns have eased significantly and valuation and positioning pressures have been digested, a recovery rally is gradually unfolding. Small and mid-cap stocks, benefiting from improved liquidity, have seen relatively larger gains in this rebound. Looking ahead, the phase of "taking the easiest path" may have passed. The pace of the uptrend is slowing, and the oversold rebound may be entering its latter half. Many low-valuation sectors have already shown performance, while the technology sector still needs more narratives and catalysts at this stage. As we approach the interim report allocation period, market drivers may gradually shift from valuation repair to fundamental performance verification.
///Today, "optical" once again led the day's gains, with the communication sector leading the way. The Communication ETF (515880) closed up 2.94%. The optical communication boom is high, and market concerns about the FCC have weakened again. Lumentum released its earnings report early this morning, with results exceeding expectations, reflecting the high prosperity of the optical communication field. More important than the financial figures, as a leader in the CPO field, Lumentum management signaled several points: Lumentum's clients are currently choosing NPO as a transitional solution. As is well known, the leading force in NPO is in mainland China, indirectly confirming the core position of the domestic optical industry chain. Due to surging demand, Lumentum signed an indium phosphide supply agreement with AXT this quarter, and the company stated that if demand continues to grow rapidly, the current tight balance of indium phosphide could be broken again. We know that China holds the initiative in indium phosphide. Therefore, if the FCC's previous ban on Chinese optical modules were implemented and China tightened indium phosphide exports, it could hinder the construction of data centers in the US. Furthermore, amidst concerns about the FCC's impact, foreign capital is aggressively buying A-share optical module-related assets in Hong Kong stocks.
Looking ahead, referencing the recently released earnings reports of US cloud computing companies, we believe that global AI capex could reach $1.5 trillion next year, a year-on-year increase of 73%, and market growth could accelerate further. Within specific sub-sectors like PCBs and optical modules, the current overall market scale's second derivative remains positive. After the pullback in July, the optical communication sector is currently at a relatively low level. The valuation of leading optical communication companies relative to next year's earnings is only around 10x, presenting a clear value trap. Interested investors can continue to monitor the low-position allocation opportunities in the Communication ETF (515880).
///Funds are actively seizing opportunities in the securities sector. The Securities ETF (512880) has recently seen continuous capital inflows, with net inflows exceeding 26 billion yuan over the past 20 trading days. As of 2026/8/11, the total asset size of this ETF has reached 63.561 billion yuan. Source: Wind. As a "barometer" of the capital market, the prosperity of the securities sector is closely linked to market activity, policy direction, and the depth of reforms. With the continuous advancement of capital market reforms and the growing demand for wealth management from investors, the securities industry is poised to embrace new development opportunities, and its long-term allocation value is also becoming more prominent. In recent years, various combinations of policies aimed at invigorating the capital market have been implemented, continuously benefiting multiple business lines of securities firms. The Science and Technology Innovation Board reforms have relaxed the listing thresholds for hard-tech companies, benefiting investment banking and equity investments. The supporting rules for public funds have been intensively rolled out, guiding residents' long-term equity funds in the medium to long term and boosting wealth management income for securities firms. Regulators continue to promote the creation of mega-securities firms. The trend of industry concentration is likely inevitable. Securities firm mergers can reduce back-office costs, achieve business complementarities, and expand capital base.
To date, over 20 securities firms have released positive performance forecasts, with the industry as a whole achieving significant profit growth, though performance divergence among different tiers of securities firms is evident. Leading securities firms, relying on their scale advantages, have seen several with half-year net profits attributable to parent company exceeding ten billion yuan. Small and medium-sized securities firms have shown greater performance elasticity, with some institutions, benefiting from improved proprietary investment income, achieving net profit growth of several times year-on-year. The disclosed performance forecasts reflect positive signals of substantial profit improvement in the industry. Realizing these performance gains is expected to become a core driver for sector trends. As securities firms are about to enter the concentrated disclosure period for semi-annual reports, the interim report allocation window is worth attention. As of 2026/8/12, the price-to-earnings (PE) ratio of the CSI All-Share Securities Company Index is 15.01 times, at the 2.94% percentile level of its valuation range over the past decade, suggesting that the current index valuation is at a relatively low position, offering a good margin of safety and allocation window. In summary, the securities sector has solid fundamental support, an interim report allocation window, low valuations, and the removal of previous capital suppression, leaving ample room for incremental capital to return. The current market is in a long-term bullish environment. The core logic for the securities sector is medium to long-term allocation, rather than short-term swing trading. The Securities ETF (512880) is the largest and most liquid bull market bellwether in the current market. Interested investors can keep an eye on it. Source: Wind.
Risk Disclaimer: Investors should fully understand the difference between regular fixed-amount investment in funds and savings methods like installment savings. Fixed-amount regular investment is a simple and easy way to guide investors towards long-term investment and average investment costs. However, regular fixed-amount investment cannot avoid the inherent risks of fund investment, cannot guarantee investors a profit, and is not a substitute for an equivalent savings financial management method. Stock ETFs/LOFs/structured funds are all types of securities investment funds with relatively high expected risk and expected return. Their expected return and expected risk levels are higher than those of hybrid funds, bond funds, and money market funds. Fund assets invested in the STAR Market and ChiNext Board face specific risks arising from differences in investment targets, market systems, and trading rules. Investors are advised to take note. The short-term rise and fall of sectors/funds listed in the article are only used as auxiliary materials for the analysis viewpoint of the article and are for reference only, not constituting a guarantee of fund performance. The short-term performance of individual stocks mentioned in the text is for reference only, not constituting a stock recommendation, nor a prediction or guarantee of fund performance. The above views are for reference only and do not constitute investment advice or promises. If you need to purchase related fund products, please pay attention to the relevant regulations on investor suitability, conduct risk assessment in advance, and purchase fund products with a risk level matching your own risk tolerance. Funds are risky, invest with caution. MACD golden cross signal formed, these stocks are performing well!
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