The HSI rebounded more than 200 points yesterday, but it still has to pass the three levels this week. Today, the US Federal Reserve ’s interest rate decision will take the lead
Tomorrow will depend on the results of the British election. tariff. In a series of major events, the stock market should be more volatile, and the ups and downs should be surprising.
Reserve Bureau or set currency policy next year
The Fed announced the results of its last interest rate discussion this morning. The Fed funds rate should not change. The market’s most concerned is the views of the Fed on its monetary policy next year. The US employment market is exceptionally strong. Brokers generally expect a mild recovery in the global economy next year, but the interest rate futures market still reflects the possibility that the Federal Reserve may cut interest rates once before the end of next year.
The Fed ’s open market committee ’s September interest rate document shows that the members ’median interest rate forecasts for next year are unchanged from this year. In other words, there will be no further interest rate cuts. The interest rate futures market has a chance of reducing interest rates by 0.25% by the end of next year. Only 38.2%, if the Fed’s bitmap after raising interest rates today raises interest rate expectations for next year, it may cause some market shocks. The US economy is stronger than Hong Kong, and there is no problem not to cut interest rates next year. Even if interest rates are raised due to rising inflation, it will be fine. However, Hong Kong is in trouble. This year, the United States reduced the short-term interest rate three times. Hong Kong banks have only reduced the best interest rate by 12.5 basis points. The Hong Kong dollar interest rate (HIBOR) has continued to rise during the economic slowdown of the past two years. To the recession, the interest rate reversed. The one-month interest rate 200 antenna continued to rise [Figure 1]. Although it was occasionally pulled down due to large-scale new stock offerings, the overall trend was still upward.
Hong Kong dollar interest rates are rising
Hong Kong has experienced riots not seen for half a century, and its economy has been severely impacted. The one-month Hong Kong dollar interest rate was almost 2.5% yesterday, plus a premium of 1.3%. The mortgage interest rate was up to 3.8%. Even if the 200 antenna was 1.95%, the interest rate was 3.25%. At the current rate of return on rent for buying a property, only 2 In fact, it is not cost-effective. In case the Federal Reserve is biased towards the monetary policy of next year, the adjustment of property prices will deepen and it will be able to attract investors.
The British elections were closed at 6 am Hong Kong time on Friday. Polling polls conducted during the polls can be announced immediately, so the general election results before the opening of Hong Kong may be very eye-catching. The key is whether the Conservative Party led by Prime Minister Johnson can get most of the seats; if it fails, it will return to the previous suspension. In the state of parliament, the pound ’s potential has fallen back to its pre-election level, and the Brexit situation is even more uncertain.
As for whether President Trump will postpone the date of imposing tariffs on Chinese goods, the market has basically assumed that they will do so. The Wall Street Journal reported that the two parties would instead discuss whether to withdraw the previous tariffs and focus on negotiating the extent of tariff reductions. If the global economy can recover next year as generally expected, Laotian may have no worries and drag on for a while to intimidate whether he can win the best conditions. Postponing the settlement on behalf of the representative, I believe the market will not be too excited, but may worry about how long the negotiations will be fruitful.
The Hang Seng Index rebounded 208 points yesterday to close at 26645 points and began to approach the significant resistance level of 27000 points. In the second half of this year, the trend of the Hang Seng Index is still lower than one, but the funds are speculatively sold in individual sectors, such as domestic housing, domestic demand, 5G concepts, and science and technology stocks. method. Yesterday’s best performing blue chips were AAC Technologies (02018) and MTR (00066). After the latter issued a profit warning, the words of Daxing Zhongkou said that the impact of social turmoil was limited. However, MTR is an out-of-the-box real estate stock, and sales of properties, shopping malls, and office buildings are the main sources of profit. Other real estate stocks are still weak, and MTR can hardly survive on its own.
5G immature Xiaomi should only be short fried
In addition, Xiaomi (01810) launched its first 5G mobile phone, and its stock price rose 8.5% yesterday. After the listing, Xiaomi, whose stock price performance has been low, is exulting. Brokers predict that Xiaomi’s earnings per share growth will reach 20% in the next 2 to 3 years, which is not expensive at 16 times 2020 PER. However, in the first half of next year, the mobile phone market may be out of date, because 5G machines are still not fully available, and consumers will stay on the line until the 5G machine market is more mature. According to Morgan Stanley’s forecast, there will be 49 million shipments of the 5G mobile phone market in the mainland next year, of which Xiaomi will account for 4 million. By the second half of the year, the penetration rate of 5G mobile phones will have a strong growth, with shipments reaching 194 million units. However, the biggest beneficiaries were not mainland mobile phone manufacturers, but Apple and Samsung, which together accounted for 100 million units.
Another challenge for mobile phone manufacturers is that the cost of 5G mobile phone parts is higher than that of 4G phones. Mobile phone manufacturers must balance the price and sales volume. If they want to occupy a larger market share, they may have to sacrifice profit margins. In a fiercely competitive environment, taking volume first may be a priority strategy. With a large market share, you can reduce prices to component suppliers to reduce the impact on their own profit margins. The 5G mobile phone market is still in an aspirational stage. When it is buried next year, the variables can be many. Xiaomi’s short fry is okay, but the results in the first half of next year may be disappointing.
The market outlook of the HSI also depends on emerging markets. This year’s emerging market bond market has performed very well. The interest rate differential between Motocom’s emerging market bonds and U.S. Treasury bonds narrowed to 300 pips, a low point in early 2018. The past bond and stock markets have always caught up. Great lag [Figure 2], if we can catch up, China and Hong Kong stock market can be said to be worthwhile next year.