Market Review
Market Focus
Chinese Market
1. Easing of Purchase Costs in First-Tier Real Estate Markets
Shenzhen Satellite TV has learned from the city's Housing Construction Bureau, the People's Bank of China Shenzhen branch, and the Financial Regulatory Authority Shenzhen bureau that Shenzhen has adjusted and optimized the lower bound of personal housing loan interest rates effective from September 29. The lower limit for the first set of commercial personal housing loan interest rates is adjusted to not less than the corresponding term loan market quoted rate (LPR) minus 10 basis points, and the lower limit for the second set of commercial personal housing loan interest rates is adjusted to not less than the corresponding term loan market quoted rate (LPR) plus 30 basis points.
2. Rare Losses in the Social Security Fund
The National Social Security Fund Council (referred to as “Social Security Fund”) released the "Social Security Fund Annual Report (2022)," which shows that by the end of 2022, the total assets of the national social security fund were 28,835.21 billion yuan, with investment income of -1380.90 billion yuan, and an investment return rate of -5.07% (the investment return rate excluding non-recurring gains and losses was -4.53%).
3. Hong Kong Stock Exchange Includes Saudi Stock Exchange in its Recognized Exchanges List
Hong Kong Exchanges and Clearing Limited (HKEX), the wholly-owned subsidiary of The Stock Exchange of Hong Kong Limited (SEHK), announced on the 28th that it has included the Saudi Stock Exchange in its list of recognized securities exchanges. Companies listed on the main market of the Saudi Stock Exchange can now apply for a secondary listing in Hong Kong.
4. Hui Ka Yan Taken into Custody for Alleged Legal Violations
China Evergrande stated that the company was informed by relevant departments that Mr. Hui Ka Yan, the company's executive director and chairman of the board, has been taken into custody for alleged legal violations. China Evergrande, along with Evergrande Auto and Evergrande Property, three Evergrande Group companies, announced that their stocks would continue to be suspended from trading. Notably, all three Evergrande Group companies had only recently resumed trading.
Overseas Market
1. Powell States Fed's Impact on Economy Depends on Public Understanding
Federal Reserve Chairman Jerome Powell emphasized the importance of education at a recent event, stating that public understanding is key to the Fed's impact on the economy. During an online dialogue with school teachers and economic educators, Powell noted that the Fed's ability to affect the economy depends on whether people understand their communications. Only when people grasp what is being said and its implications for their personal finances will Fed and its policies have a normal impact on the economy.
2. U.S. Official Savings Estimate Revised Down by $1.1 Trillion Over Six Years
Due to a revision of U.S. official data, American households’ savings decreased by a trillion dollars over the past six years. The U.S. Department of Commerce's Bureau of Economic Analysis (BEA) published a baseline update for the first time covering GDP, relevant sectors, and national statistics simultaneously. The revised data show that from 2017 to 2022, the annual savings ratio of U.S. households to disposable income averaged 8.3%, lower than the previously estimated ratio of 9.4%.
3. U.S. Long-Term Loan Interest Rates Soar to New Highs Since 2000
According to data published by Freddie Mac, the interest rate for a 30-year fixed mortgage in the United States rose to 7.31%, reaching a new high since 2000. The continuing surge in mortgage interest rates and factors such as economic outlook have dragged down the U.S. existing home sales contract index more than expected, reaching its lowest point since the COVID-19 outbreak in April 2020, which is near historical lows. Limited inventory and soaring home prices have kept potential buyers in a wait-and-see position. The existing home sales contract index is a leading indicator of existing home sales.
4. Germany's CPI in September Plunges to Lowest in Two Years
Data released by the Federal Statistical Office of Germany shows that the preliminary value of Germany's CPI in September fell sharply to 4.5% from 6.1% in August, showing a higher-than-expected cooling; the month-on-month preliminary value was 0.3%, consistent with previous and expected values. Germany's September inflation dropped to the lowest level since the Russia-Ukraine conflict, indicating the high inflation era is nearing its end, further solidifying expectations for the European Central Bank to halt interest rate hikes.
Key Focus Today
Today, investors should pay attention to key data including UK GDP for the second quarter, German retail sales and employment report, Eurozone harmonized CPI, U.S. PCE price index, personal spending, and the University of Michigan consumer sentiment index, among other important data. Additionally, investors should also be aware of potential risk events such as speeches by the President of the European Central Bank, Lagarde.
