Daily Report 250815 2015-08-25
Macro Economy
Yesterday US stock market continued dropping; S&P 500 index for the first time came into technicality retracement from 2011, price extremely volatile in the middle market with dropped 5% once; market closed at 1893.21 point, dived 77.68 point or 3.94%. In contrast to high point in May, S&P 500 index had dropped 11%; VIX soared to a four-year high level. The Atlanta fed President, Dennis Lockhart persisted in viewpoint that Fed would raise interest rate within this year and, indicated strong us dollar, devaluated yuan and slumped oil price would make prospects even more complex. Instead of which, Fed funds futures stated that first timing of Fed raise interest rate would postpone to next March. We considered recent global financial market, especially volatile US stock market, would caution Fed on interest rate raise timing; the possibility on September had further decreased. In addition, continuously plunging global stock market and, currency competitive devaluation in Asian economies which had started previously was possibly burst to another financial crisis. Though current real economy had not been affected, still need to pay attention on the reaction from national governments to financial market, for judging the impact to economy.
In domestic, yesterday USDCHN swiftly devalued and hit 6.5 once; USDCNY as well broke through 6.4 and created a four-year low point. In addition, yesterday Shanghai Composite slumped over 8% and created a five-month low level, all three futures index downed to the limit. If no other rescuing policy issued, we recommend do not expect for high rally.
Stock Index
Yesterday stock index overall downed to the limit. Prior concepts were totally denied and shattered in current market. The concept from CSF was lacked of trusted; state-owned enterprises reform was discouraged; other military industries also felt overvaluation; bad loans concerns from bank sector were increasing. Current situation was economic data continuously weaken and, prior longed positions which based on CSF and other concepts, would constantly join in the shorten momentum in the future. Global in experiencing panic currently, slumped U.S. and China stock market would interaction effected; none bottom dropping from oil price made even worse. There was no sign of future economy data uptrend and, it already passed half years, which was gloomier. On market rescuing side, in prior is to rescue liquidity, nation concerned on bank asset went wrong; after the bank asset risk in stock market released, we recommend do not wish government would confront whole market to buy in, investors need to undertake own risk. Price may break through 3000 and will stabilize after lots of stocks are cheap. It might be rally in this point diving but, it cannot rally back and trend is in downward.

Monday domestic and overseas market once fell over 4%, partial losses were regained afterwards.  On market, China stock market nearly overall downed to the limit which caused further concerning on China economy and, this concern was expanded to global with global stock market collapse; under which copper price was sharply hammered. On fundamental side, LME spots premium further extending to $10; inventories further increasing 2375 tons. Domestic spots was from flat to premium RMB 40, market participation was weak. The reason of LME spots premium was on China import, recent import window opened, trade premium rallied; import copper was huge on spots market. But domestic consumption was weak, consumers bought in required; hammer on domestic spots premium was huge. Technically, domestic and overseas copper price cannot get rid of weak trend; domestic LME resistance was $5000, crucial resistance was $5340; domestic November copper resistance was RMB 39000. We recommend short positions can be further held but, set stop-loss level.
Grease further dropping in night session; soybean No.1 contract and soybean meal rallied after sluggish; current domestic soybean was as well in systematic falling market. Variation from the supply and demand side of soybean No.1 contract was not huge; spots in northeast slightly weakened out of stabilize. Under the impact of upcoming new grain, hammer on spots further raising was extended in a short time; but decreases range was estimated be limited in short time, the market momentum was still strong.
Soybean meal reduced RMB 30-50/ton in most areas, overseas market dropping made domestic oil plants reduced quotation. Market shown tightened North inventories, huge inventories in south China and East China; oil plants in north plainly supported price and volume was good, most oil plants were mainly executing prior contracts.  Under the circumstance of overseas market downward and commodities in weak trend, it was estimated that meals would continue weaken out of fluctuation. We recommend keeping shorten momentum as for operation.
                                                                   Dong LV (Investment Certificate NO. TZ008452)