Daily Report 181114 2014-11-18
Macro Economy

The U.S. stocks closed flat on Monday. The S & P 500 index rose to its historic high again. Concerns raised by weak Japan’s economy and the drop of small caps offset the positive impact resulting from corporate mergers to large caps. The Dow Jones index advanced 0.07%. Dragging down by public utilities, mining and automobile manufacturing industry, the U.S. industrial output in October surprisingly shrank by 0.1%. This figure is lower than expected and indicates the weak economy at the beginning of Q4. However, the U.S. industrial data fluctuates frequently in recent months. Therefore, the drop in this term is not likely to change the upward trend of the U.S. economy.


During the night session, the price of domestic gold main futures rushed up high then fell back. After the dramatic increasing on Monday, it is expected to adjust slightly. In terms of operation, for middle term the gold price will remain weak but for short term it may rally. Currently, the short term long positions which set up at RMB 230 above 5-day moving average are mainly quite profitable. The resistance is great above RMB 236; intraday there may be a risk of rally. However, the funds appears that gold ETF has the first time increased the holdings of 2.39 tons since the continuous decreased holdings from the beginning of Nov. around 20.58 tons in total. This suggest that the funds may become more active in gold investing; pay attention to if the cash inflow will continue.


Overnight the price of domestic silver main contract has a narrow adjustment; in short term it may lack of momentum to rise up continually. In terms of operation, recently silver price waved a lot; in the middle term it remains weak in the big picture but it could be fixed lately. Long orders set up at RMB 3350 while the short line broke through 5-day moving average should be closed at RMB 3450; intraday pay attention to the risk of rally. In general, silver price still followed with the gold trend, it may hardly get rid of independent situation. From the funds perspective, silver ETF remains the same level for 3 straight days.


On Monday, LME 3-month aluminum waved; it closed at RMB 2029 per ton, up 0.1%. China-Australia Free Trade Area Agreement gets substantial progress; Shanghai-Hong Kong stock program was authorized yesterday; the market has a strong reaction towards it. From the industry perspective, bureau of statistics released that electrolytic aluminum output increased 208 tons on October, which increased 6.4% year-on-year. Non-ferrous industry association announced for previous 9-month, non-ferrous metals industry accomplished the fixed asset investment of accumulated 509.4 billion RMB, grew by 5.3%. Views on SHFE aluminum remain the same.


Contracts related to soybean in Dalian Commodity Exchange dropped slightly. As the farmers are more willing to sell the soybean, soybean spot tends to decrease further, which will bring pressure to the market. Soybean meal spot in many regions slipped from RMB 20 to RMB 60 / ton. However, the U.S. soybean will arrive at the harbor at the end of this month, which brings pressure to soybean afterwards. The amount of imported soybean is expected to be as much as 12.5 million tons. In terms of operations, considering the soybean fluctuates strongly in foreign market, short-term moves could be taken for soybean meal in Dalian Commodity Exchange. As for the No.1 soybean, the trend is relatively weak. Therefore, short positions are recommended for this term.
                                                                             Dong LV (Investment Certificate NO. TZ008452)