Market Review
Market Focus
Chinese Market
A-share valuations have fallen below the levels seen in 2008 when the index was at 1664 points
Amid continuous policy support, the Shanghai Composite Index has once again failed to hold the 3100 point level this week, with market sentiment falling to a nadir, making investors overlook management's protective policies. Statistical data shows that the current price-to-earnings ratio (P/E ratio) of the Shanghai Composite Index is 11 times, compared to 13 times on October 28, 2008, when the index was at 1664 points; the current P/E ratio of the CSI 300 is 10.8 times, compared to 12.8 times when the Shanghai Composite Index was at 1664 points.
The decline in profits of major industrial enterprises narrowed in July
With the stable recovery of industrial production and the marginal improvement of corporate revenue, the level of industrial production and sales connection improved, the decline in factory prices of industrial products narrowed, jointly promoting the improvement of industrial enterprise revenue. Data shows that in July, the operating income of major industrial enterprises in China decreased by 6.7% year-on-year, with the decline narrowing by 1.6 percentage points compared to June, marking the fifth consecutive month of narrowing. From January to July, the total profits of major industrial enterprises nationwide reached 3.94398 trillion yuan, a year-on-year decrease of 15.5%, with the decline narrowing by 1.3 percentage points compared to the first six months.
Significant progress in the new generation "artificial sun"
The new generation "China Fusion Experiment Advanced Tokamak" has made significant scientific progress, achieving high-confinement mode operation under 1 million ampere plasma current for the first time, marking China's entry into the international forefront of magnetic confinement fusion device operation, and a significant milestone in the development of China's nuclear fusion energy.
Overseas Markets
The largest American crude oil ETF is causing another stir
The largest American crude oil ETF—USO has attracted regulatory scrutiny with an investment strategy that, starting in September, will see most of its positions reallocated to near-term crude oil futures contracts, instead of across the entire futures curve. In April 2020, USO restructured its holdings of crude oil futures contracts several times within a week, leading to May oil futures falling into negative value for the first time, closing at an unprecedented -$37.63 per barrel.
Bank of Japan Governor sticks to loose monetary policy
The Governor of the Bank of Japan, Kazuo Ueda, attending the Jackson Hole symposium, stated that Japan's inflation rate is still below the central bank's target, and the Bank of Japan will continue to implement its current ultra-loose monetary policy. As the only developed country not to have raised interest rates in the past eighteen months, the cheap and liquid yen is central to carry trade, with potential policy shifts by the Bank of Japan also being one of the reasons for the global rise in government bond yields.
Institutions predict US corn and soybean production in 2023 to be below USDA expectations
Due to recent hot and dry weather pressuring crops that benefit from summer rain, Pro Farmer, under the umbrella of Farm Journal, indicates that US corn and soybean production for 2023 will fall below the USDA's latest predictions. Pro Farmer anticipates, based on an average yield of 172.0 bushels per acre, US corn production will be 14.96 billion bushels (the third highest in history). After surveying seven major producing states, Pro Farmer estimates the US soybean production in 2023 will be 4.11 billion bushels, with an average yield of 49.7 bushels per acre.
