On the morning of September 28, the Shanghai and Shenzhen stock indices fell sharply. The Shanghai Composite Index dropped 1.74%, the Shenzhen Component Index fell 3.37%, the ChiNext Index declined 4.32%, and the CSI 300 was down 2.15%.
What are the main developments currently? First, China and the United States reached an eight-point consensus on outcomes. This includes both heads of state recognizing the positive role of the China-US economic and trade consultation mechanism and the results of negotiations between the two sides' economic and trade teams, including establishing and advancing mechanisms such as a trade council, reaching a "US$30 billion" reciprocal tariff reduction arrangement, extending the outcomes of the Kuala Lumpur economic and trade consultations, and instructing that these be implemented.
Second, the so-called "US-Europe super data week" has arrived. US August PCE, September nonfarm payrolls, eurozone CPI, and PMI will be released successively. The possibility of further US rate hikes has increased. US Treasury Secretary Bessent called on the Federal Reserve to maintain an "open mind" on interest rate issues.
Third, the US 10-year Treasury yield stands at 5.15%, and the ICE BofA MOVE Index, known as the "fear gauge" of the US Treasury market, surged about 29% last week.
Fourth, the US and Iran will hold negotiations. Both sides have stated they are prepared for either talks or conflict.
Fifth, China released the profit situation of industrial enterprises above designated size for January to August. Total profits reached 5,271.98 billion yuan, up 15.7% year-on-year. Among them, state-controlled enterprises achieved total profits of 1,675.99 billion yuan, up 10.3% year-on-year; shareholding enterprises achieved total profits of 4,071.46 billion yuan, up 20.4%; foreign-funded and Hong Kong, Macao, and Taiwan-invested enterprises achieved total profits of 1,179.47 billion yuan, up 2.3%; private enterprises achieved total profits of 1,321.32 billion yuan, up 10.4%.
Sixth, in the US stock market, Micron Technology will release its quarterly earnings, serving as a window to observe the prosperity of the DRAM, HBM, and the entire AI data center industry chain. [Comment: Observing global AI investment trends through this is reasonable, but there is no need to panic.]
Seventh, the South Korean stock market will shift from being "dominated by retail investors and leveraged funds" to a phase of "watching foreign capital's mood."
Eighth, the Federal Reserve plans to raise the asset size threshold that triggers stricter supervision of large banks, re-indexing the highest tier threshold to nearly US$1 trillion, and raising the lower threshold that triggers certain regulatory requirements to nearly US$150 billion.
Ninth, on September 28, the WeChat public account "National Security Department" published an article reminding that virtual currency is not a lawless zone, its so-called "anonymity" is merely an appearance, and the risks it brings cannot be ignored.
Among these developments, the first and fourth will affect the global economic landscape and are both somewhat positive. The second, third, and sixth have a direct impact on global financial market sentiment, but mainly affect US stocks and should not drag down the Chinese stock market. The fifth is an important footnote to China's stable economic recovery and upward momentum, which is positive for the Chinese stock market. The seventh is South Korea's domestic affair and has little impact on China. The eighth is a measure by the US to release financial risks, which is worth China learning from. The ninth is a general reminder and does not mean that Chinese financial regulators have made new adjustments to their policies on virtual currency.
Overall, most of the information is neutral for the Chinese stock market and carries no打击力 (punitive force), but the US internal economic factors are clearly unfavorable to US stocks. Many international investment banks expect US stocks to fall and oil prices to continue running at high levels, which will affect global financial market trends. However, the Chinese stock market has remained at a low level for a long time and is still in a restorative upward phase. Such a sharp reaction is difficult to understand.
Nevertheless, market sentiment deserves attention. We should focus more on the internal market supply-demand contradiction and improve investors' overall expectations. On the one hand, stabilize the IPO pace, take measures to limit excessive pricing, and allocate more new share quotas to retail investors. On the other hand, pilot the issuance of old shares, improve the reduction system, and optimize the overall supply-demand structure.
The supply-demand structure is the master key to capital entering the market. The People's Bank of China should further emancipate the mind and allow a larger proportion of savings to flow into the stock market. On the basis of strict supervision, ample stock market funds mean serving the real economy. At the same time, financial coordination with the Hong Kong Special Administrative Region should be strengthened to crack down on market manipulation and curb the "sentiment backflow" and "valuation backflow" from Hong Kong stock speculation into the mainland market.
I just saw that Yuanji Dumplings is going to list in Hong Kong. What is this all about?
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