Asian stocks fell, with the exception of India, which made gains. It was a quiet night, with Hong Kong closed due to the most rain since 1884. Mainland China was down slightly on an afternoon rally that drove intraday stocks off. Minimum.
Taking a step back, nothing has replaced despite the clamor of negative media attention surrounding Xi’s absence from the G20, Apple’s government worker ban, and Huawei’s phones and chips’ good luck with the Apple news weighing on US stocks. The bigger issue, in my opinion, is the more positive economic news in the United States, which is hurting the chances of a Fed pause as emerging market yields in the United States boost the US dollar. Contacts in China were surprised by the US reaction to the iPhone ban, which has not been officially confirmed. The ban shouldn’t come as a surprise, as many contacts didn’t have the iPhone popular with officials or used for official government business. iPhones are a luxury item in China due to their higher price compared to the competition. Huawei’s new Mate60 Pro is a cell phone that can also use satellite telephony and messaging when out of range of cell service. The launch poses a potential risk to iPhone sales, though it’s worth noting that Apple shares peaked at the end of July.
Despite the roar of negative media news, diplomatic relations between the United States and China have stabilized as the two sides finally board planes and meet. Economic reforms in China continue with a focus on easing housing restrictions across the country. The continental stock market continues as margin funding declines, IPOs slow and share sales are discouraged due to reduced supply. At the same time, dividends and buybacks are encouraged, which will lead to increased demand. The challenge lies in the lack of buyers that, in a negative media context, weighs on Chinese offshore actions, whether in Hong Kong or the United States. The CNY struggled against the US dollar, ending at 7. 35 CNY, consistent with the USD as the US dollar index rose.
The Hang Seng and Hang Seng Tech indices closed due to heavy rains.
Shanghai, Shenzhen and the STAR Board fell by -0. 18%, -0. 07% and 0. 19%, respectively, with volume falling by -0. 46% compared to yesterday, or 87% from the annual average. 2,718 stocks rose while 1,891 fell. Value and expansion points declined as large-cap companies outperformed small-cap companies. In US dollar terms, utilities were the only positive sector, with an increase of 0. 69%. Meanwhile, energy fell by -1. 45%, communications by -1. 44% and tissues by -1%. The subsectors that acted most sensibly were aerospace/defence, telecommunications and electricity. Meanwhile, education, the Internet and cultural media were among the worst performing subsectors. Northbound Stock Connect was closed today. The CNY and Asian Dollar Index fell against the US dollar, ending at -0. 13% and -0. 03%, respectively. The Treasury curve became steeper while copper and metal fell.
Lately we are conducting a survey with our friends at Capvision to get a review of North American and European companies that lately do business in China. Specifically, we are looking to know if those companies plan to increase or minimize their presence in China. . We also seek direct feedback from those corporations so we can share it with our readers and you can hear it directly.
So far, we’ve asked thirteen European and North American auto corporations if they expect their business to grow in China over the next five years, and 10 of them said they expect an increase. We also asked thirteen healthcare companies the same thing. corporations, and 11 of them said they expected an increase.
A medium-sized American healthcare company said, “Our profits in China have grown by at least 10% every year for the past 7 years. We expect this trend to continue in the near future. We do not see any significant replacement in the expansion of healthcare in China and will continue to invest resources in the market.
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