Last week, US economic data was relatively strong, with CPI and PPI both strengthening. The market was initially hesitant about the impact of the data, but ultimately still believes that the trend of "core" inflation remains unchanged, and the trend of the yield curve steepening also continues. The US stock market hit a new all-time high, high beta stocks and foreign exchange further broke through, and the market still expects the probability of a 25-basis-point rate cut in December to exceed 85%. Citi's macro strategy analyst said they are "extremely bullish on stocks", and Goldman Sachs has been raising the target prices of US and Chinese stocks in the past few weeks.
On the Chinese side, the much-anticipated press conference by the Ministry of Finance over the weekend was a mixed bag, with no clear mention of the specific scale of stimulus policies, a lack of implementation details overall, and no announcement of measures to stimulate retail consumption. Although iron ore, crude oil and the A-share market fell in early trading on Monday, prices rebounded strongly before the lunch break, and retail investors in China are likely to maintain a strong "buy on dips" momentum in the short term.
In the US stock market, JPM kicked off the third-quarter earnings season with a very strong performance. The banking giant's stock price rose 5% after reporting an unexpected increase in interest income and raising its revenue forecast. The overall KBW Bank Index also reached its highest level since April 2022, and the trend of the yield curve steepening is expected to further drive revenue growth in the banking industry in the coming quarters.
In the cryptocurrency sector, although the SPX has been hitting new highs, the performance of cryptocurrencies has been the opposite, with prices still struggling to break out of the range. The US stock market is making its best efforts to push up cryptocurrency prices, but we still believe that the path to price appreciation will be long before a more exciting narrative emerges. While prices have been stuck in a range for a long time, traders are still inclined to sell volatility and generate returns.
As the Chinese stock market rebounds from the disappointment over the weekend, BTC prices have indeed jumped above $64,000 this morning, and risk sentiment may still remain in a "buy everything" mode until the situation changes. With the final weeks of the election campaign approaching, the strong BTC ETF inflows last Friday may be a positive signal, but patience may still be needed before prices reach new highs.
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