Daily Report 180815 2015-08-18
Macro Economy
Yesterday US stock market ended high, S%P 500 index continued last week soar trend. Before there was more clues on Fed interest rate raise issue, home builders leaded to rise; investing and trading momentum was thin. S%P 500 index increased 10.9 point or 0.52% to 2102.44 point. Data revealed that NY Empire State Manufacturing Index decreased to -14.92 in August; August home builders’ confidence index met the expectation, increased to 61 and created record high from the ending of economic recession. Dallas Fed nominated Steven Kaplan, professor of Harvard University and former Goldman executive as the bank president but, Kaplan need wait till 2017 to have voting right which lighter the influence on Fed decisions.
In domestic side, China is planning to publish state-owned enterprises reform framework in this month and the soonest time will be in this week; state-owned enterprises will implement classification regulation according to functional partitioning and will systematically establishes State-owned capital operating company. Goldman and Commerzbank both reduce the next year anticipation on RMB against US dollar, but Bank for International Settlements published both RMB nominal and real effective exchange rate had created record high in July. In addition, National Bureau of Statistics of China will publish July residential sales price of 70 big and medium-sized cities on 9:30 this morning, need to pay attention on it.
 
 
Stock Index
Yesterday stock index IF continued fluctuant; IC raised and financial stocks sluggish; first class industries all soared and performance on concept stock as well flourished. National rescuing policy temporally exits; the market panic mindset as well gradually subsides after stock market crashes. The bullish side currently is 3th Five Year Plan; reform of state-owned enterprises; capital construction in stabilizing growth; further effecting from prior hot concepts, which all increase the market imaginary space. On bearish: overall economy data performance is weak and, most accounts are hard to inject new capitals after prior injure.
Taken together, good news in market is on reforming and transforming, upgrading; it is hard for imaginary space on the old economic pattern. IF is estimated hard to step out volatile pattern although it is in bull trend for a short period. IH is subject to the sluggish economy data and the concern on bank assets, hard to rally. IC is more likely to be strong in the future compare to IF but, is also hard to step out the unilateral market.


Copper
Monday investing and trading momentum was thin in domestic and overseas copper market, price edged down. Though RMB exchange rate clamed, in emerging countries of Asia it still pains; overnight Asian currency devaluates, currency in Southeast Asia undersells, meanwhile, Japan gets into recession again and, situation in Euro Zone in not optimistic; China economy is the focus of market consideration; hammer on macro side is huge under this momentum. Back to copper market, LME spots discount $8; inventories slightly increase 325 tons; domestic spots are flat to premium RMB 50; market trading and investing is still thin. The latest news, copper yield of kazakhstan was 218,000 tons in prior seven months; increased 38.1% on year to year base, which was the crucial source from global copper growth.
Technically, copper market is still volatile low, LME resistance downs to $5240; in domestic is RMB 40000. Copper market will in weaken before raise through above price. We recommend avoiding macro risk as for operation.
 
 
Soybean
Performance of DCE soybean was stronger than overseas market; soybean NO.1 contract in volatile after rising in spots; oil meal tendency was stronger than overseas market. Partial domestic soybean spots edged up; bullish momentum was think in a short time but, be cautious at further increasing scope.
Partial soybean meal spots edged down, market still impacted by the plunged oversea market; forward import cost further decreasing; meals lacked of bullish news in short period and was estimated to further fluctuant in weaken. We recommend observing or in shorten mindset on operation.
 
 
PP
Yesterday PP futures opened up low and went lower, opened at 7900 and ended at 7746; trading volume decreased 140,000 lots to 507,000 lots; holding decreased 22,228 lots to 230,000 lots. On spots side, overall domestic PP market slightly volatile out of stabilize; partial went weaker in the range of RMB 50/ton. PP futures went low which hammer the market investing and trading momentum; merchants shipped in market price for shipment. In downstream, plants insisted on purchasing as demand and, volume was normal.
Current main quotation of wires, north market was RMB 8050-8200/ton, east market was RMB 8300-8400/ton and south market was RMB 8300-8400/ton.
On operation, current price plainly hammered by moving average system and 8000 level; MACD red column shorten; high possibility of entering oscillatory interval. We recommend observing and activist investor may consider operating among interval.
 
 
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