Daily Report 230914 2014-09-23
Macro economy
The U.S. stocks closed lower on Monday. The S & P 500 index suffered from its highest daily decrease since August. Latest released real estate data is far lower than expected, which raises concerns on the growth of economy. The China’s finance minister claims that big policy adjustments will not take place merely due to the change of single economic index. The stocks market is then facing pressure. Until the market is closed, the S & P 500 index dropped below 2,000 basis points by 0.8%. The Dow Jones industrial index plunged over 100 basis points. In terms of data, the U.S. real estate data released last night is far lower than expected. The secondhand housing sales decreased by 1.8%, which are 5.05 million houses. It is the first-time decline since May. On the whole, the recovery of the U.S. real estate market may still takes some time. The Euro Zone consumer confidence index is lower than expected and continues a downward trend, which indicates the Europe’s economy is still rather weak.
Domestically, China Beige Book demonstrates that China’s economy growth rate remains low in this Q3. Specifically, the rebound of transportation is offset by the weak retail and real estate data. China’s economy is not in a good condition due to the weak internal demand. The HSBC China Manufacturing PMI will be released today. Although the figure in August was 50.2, higher than 50 for three continuous months, a downward trend also took place. The expected HSBC China Manufacturing PMI is 50, which is believed to influence the market and should be focused on. 
Decrease of gold yesterday was revised slightly in the night market. The domestic gold will be in range bound in the short term. In terms of operations, previous short positions opened higher than RMB 249.5 could be held. Stop-profit should be set at RMB 240 for those short-term short positions. During the intraday trading, defensive moves should be prepared according to five-days moving average at RMB 243.5. Currently, the key element, which influences the gold, turns to be the performance of the U.S. assets. Three major U.S. stocks dropped simultaneously due to the listing of China concept stocks in the U.S. market. The gold is likely to stop dropping if the U.S. stock market remains weak. As for the funds, the gold ETF overnight positions declined by 1.79 tons, indicating the funds are not holding an optimistic view toward the gold. On the whole, the weak trend of gold may remain under the increasingly higher expectation of rate hike. The U.S., Euro Zone and China’s initial PMI in September should be paid attention to.   
After falling limit down 6% yesterday, domestic silver continues dropping in the night market. However, rebound may take place in the short term. In terms of operations, previous short positions opened at RMB 4130 could be held and stop-profit should be set at RMB 3800. During the intraday trading process, observing the trend is recommended. The monthly trend of silver in foreign market indicates the silver has dropped below the triangle convergence region. The weak trend is difficult to change afterwards. However, considering the strong demand of silver spot in the domestic market, the silver may not be able to decrease below RMB 3800 without negative fundamental news. On the whole, Due to special character silver, it may be hard for it get out of the trend independently.
The LME copper closes lower by $ 98 and remains range bound around a low price during the intraday trading after plunge on Monday. China’s weak economy data released previously is believed to be the main reason of the slump of copper. Recently, the Chinese government claimed that big policy adjustment would not take place only for single economic index, which cools down the expectation of outright easing policy. China is currently within the industrial construction adjustment process. The long-term economic prospect is believed to be optimistic, but the demand of copper is likely to remain weak. The initial HSBC China Manufacturing PMI will be released on Tuesday. The market expectation of this figure is lower than 50. In terms of overnight data, the U.S secondhand housing sales dropped for the first time in the past five months by 1.8%. As for the fundamental data, the LME copper spot has a $ 2 premium to $ 50 while the inventory decreases by 675 tons to 154 thousand tons. The domestic copper spot premium dropped RMB 40 to the range between RMB 90 and RMB 250. From the views of spot market, merchants with copper spot are eager to get rid of it. Therefore, the copper spot premium remains a downward trend. Some of the copper from hedging market is released, which increases the supply pressure. Risk aversion sentiment is relatively strong in the copper market. Speculative investors hardly tend to enter the market. The world largest copper mine Escondida is suffering from a 24-hour strike, which is expected to have a limited impact on the copper market. As for the technical analysis, the LME copper is still likely to drop. The target price is set at $ 6,600 and $ 6,300 while the resistance price is set at $ 6,770. Domestic copper’s target price is RMB 47,000 and RMB 43,000 respectively and the resistance price is RMB 48,000.
                                                                                                                    Dong LV (Investment Certificate NO. TZ008452)