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The US June "terror data" was better than expected, but the three major indexes of US stocks closed down collectively. "Dr. Copper" is bowing his head and the bull market is coming to an end?
Jul 17,2020 08:32CST
translation
Source:Futures daily
The content below was translated by Tencent automatically for reference.

SMM: on the evening of July 16 in Beijing, the monthly rate of retail sales in the United States, known as "terrorist data," was announced at a monthly rate of 7.5%, which was better than the 5% expected by the market. At the same time, the number of initial claims for unemployment benefits in the United States in the week to July 11 was 1.3 million, higher than the market estimate of 1.25 million. The United States recorded another million first-time claims for unemployment benefits last week, and the number of unemployed people has exceeded 50 million since the outbreak of Xinguan pneumonia.

Some agencies commented that US retail sales grew faster than expected in June, but the increase in new confirmed cases and high unemployment are threatening the nascent economic recovery.

Some analysts said that the sustained rebound in the US "terrorist data" in June was mainly driven by clothing consumption, which increased by 105% from the previous month, but also reminded investors that the monthly rate of retail sales in the United States in June may be better than the actual situation: first, there was a significant rebound in the epidemic in late June, and second, the negative impact of the rebound in the epidemic on retail sales may not be reflected in the data released this time. The June figures are likely to be revised significantly when the monthly rate of US retail sales for July is released next month.

In terms of US stocks, the three major indexes of US stocks closed lower, the S & P 500 index initially closed down 0.34%, and the Dow fell more than 130 points. The dollar index came out of a five-week low and the euro fell for the first time in a week. Gold fell from a nearly nine-year high. International crude oil rose in a row at the end of two days, falling to a four-month high. Lun Copper rebounded to the end, falling for two days in a row.

Some data on the CDC website have been deleted after the Trump administration decided to "take over" data on the new crown pneumonia epidemic on July 16, local time, CNN reported. The New York Times previously reported that the US government has asked hospitals across the United States not to send information about the epidemic to the Centers for Disease Control and Prevention from July 15. Many experts are worried about the decline in the transparency of epidemic data and aggravating the problem of "politicalization" of the epidemic in the United States.

In terms of the epidemic, more than 13.9 million cases have been confirmed worldwide, with more than 591000 deaths, and more than 3.67 million cases have been reported in the United States. The United States added more than 62000 a day, Brazil more than 45000, and India more than 35000.

On Thursday, the domestic market changed dramatically, with the three major A-share indexes recording their biggest one-day decline in more than five months. The decline in market risk sentiment also put "great pressure" on the industrial product market, especially the early surge in non-ferrous metals market driven by macro sentiment also closed green across the board on Thursday, and copper and aluminum futures fell further from their highs.

In terms of capital flow, there was a serious blood loss in the domestic commodity futures market on Thursday, with an outflow of nearly 3.5 billion yuan from the Mandarin Commodity Index. The non-ferrous plate bears the brunt, with a capital outflow of 2.388 billion yuan in the day.

The high position of the non-ferrous plate falls back, and the copper "cow" is hard to end.

Under the pressure of market sentiment, the domestic commodity market, especially the non-ferrous metals sector, fell sharply on Thursday. Shanghai Copper and Shanghai Aluminum entered the adjustment in the past two days after hitting a high at the beginning of the week. By the day's close yesterday, Shanghai Aluminum was down 3.52% and Shanghai Copper was down 3.24%. However, yesterday's night trading, Shanghai copper, Shanghai zinc, Shanghai tin and other non-ferrous varieties received a small red.

It can be seen that the Shanghai Composite Index has risen more than 20 per cent since the end of March this year, symbolizing that A shares have entered a technical bull market. In the field of futures, the price of copper, also a barometer of the Chinese economy, has also risen by nearly 50% and has already stepped into a bull market. " South China Futures Consulting Service Zheng Jingyang said. However, copper prices have adjusted for three consecutive days, along with A shares, after hitting a nearly two-year high on Monday, and copper in Shanghai fell more than 3 per cent on Thursday. To investigate the reason, he believes that it is mainly the settlement of profit trading. The recent rapid rise in copper prices has led to the need for concentrated release of selling pressure on bulls in profit trading, but from the weekly point of view, copper prices are still on an upward trend.

In his view, the current core factor affecting copper prices is still financial attributes. The unprecedented "release of water" by the Fed has led to unusually abundant liquidity in the market, so it is hard to say that the "bull market" in copper is over until the Fed explicitly tightens monetary policy. And the South American epidemic continues to ferment, resulting in a significant loss of copper supply. But copper demand is still doing well thanks to the recovery in Chinese demand, especially driven by infrastructure and real estate, so LME inventories are still falling despite recent small increases in domestic inventories. Therefore, he expects the copper price adjustment space is limited, continue to maintain a strong judgment.

"on Thursday, the market suffered the release of short forces, coupled with the completion of Shanghai Aluminum contract delivery in July, the spot shortage and warehouse receipt low pressure released sharply, resulting in a sharp fall in aluminum prices." Yu Feifei, a non-ferrous researcher at Jianxin Futures, said.

On the same day, the main 2008 contract of Shanghai Aluminum closed at 13975 yuan / ton, a decrease of 3.52%, reducing its position by 8419 to 129363, while the contract in October increased its position significantly. In terms of price difference, back has continued to narrow in recent months, with the closing price difference between 2008 and 2009 contracts reporting-180 yuan / ton. In terms of inventory, on July 16, the situation of slow de-stocking of electrolytic aluminum continued, and the weekly inventory of domestic electrolytic aluminum decreased slightly by 4000 tons to 708000 tons.

Yu Feifei believes that the overall outflow of funds from the non-ferrous futures plate, the aluminum market is also difficult to escape. "from a future point of view, domestic aluminum ingot social inventory continues to decline slightly, low spot water rises to maintain, need to pay attention to the late inventory changes and demand market conditions, the market is still facing risks in the downstream demand side can maintain bright performance. Due to the weakening marginal utility of demand growth, aluminum prices are obviously afraid of heights after continuing to climb the 15000 mark, both sides of the long and short sides do not love war, and there are more capital outflows. " She said that aluminum prices are facing technical repair after rising continuously, and after breaking the Wanshui mark in a short period of time, the lower support looks toward 13500 yuan / ton.

The equity market is likely to maintain an upward trend.

Thanks to the improvement of the domestic epidemic prevention and control situation, enterprises continue to resume work and production, and both ends of the market supply and demand have significantly improved. In June, domestic economic data continued to move forward on the track of repair, and contributed to the higher-than-expected economic growth in the second quarter. On Thursday, the National Bureau of Statistics announced the performance of the national economy in the first half of the year. China's (GDP) in the first half of the year was 45.6614 trillion yuan, down 1.6 percent from the same period On a quarterly basis, it fell 6.8% in the first quarter from the same period last year, and increased by 3.2% in the second quarter.

For the recent economic performance, Haitong Securities macro team Jiang Chao, Yu Bo said that since the second quarter, the economy has gradually recovered, but employment is still under pressure. 5.64 million new urban jobs were created in the first half of the year, only 63 per cent of the annual target, far lower than in the same period in previous years, while the urban survey unemployment rate remained high at 5.7 per cent in June. The employment target ranks first among the work goals of the two sessions of the National people's Congress this year. In the past, the service industry was the main force to absorb employment, but the impact of the epidemic on service industry and consumption was significantly greater than that of industry, and it has not subsided at present. Therefore, they expect that in the context of no significant improvement in employment, proactive fiscal policy will accelerate the landing, monetary policy will not be tightened, and the momentum of economic recovery is expected to continue.

Liu Xuezhi, a senior researcher at the Financial Research Center of the Bank of Communications, said that the sustained economic recovery and obvious recovery on the supply side is mainly due to the increased efforts for enterprises to return to work and production after the epidemic has been effectively controlled, which has promoted economic repair. In terms of demand, it is also gradually improving, such as the continuous narrowing of the decline in investment, the better-than-expected trade data, and the small negative growth in consumption, but it is also gradually improving, but the rate of recovery is relatively slow.

From a policy point of view, he believes that a proactive fiscal policy will continue in the second half of the year, monetary policy should be loosely adjusted on a sound basis, and the possibility of a comprehensive reserve reduction is gradually reduced, but the operation of targeted reserve reduction cannot be ruled out. Under such a macro policy tone, coupled with the control of the epidemic, it is expected that the economy will continue to recover gradually in the second half of the year, and economic growth will be faster than in the first half of the year.

Overall, Tianfeng Securities research believes that the economic recovery is still in a state of structural recovery, considering that the cumulative absolute number of fixed asset investment, commercial housing sales and consumption is already at a low level. It is impossible for the central bank to continue to tighten monetary policy marginally in the three-month cycle. As far as the asset allocation strategy is concerned, looking back six months, the trend of slow economic repair is still there, but the overall improvement is still weak, the central bank will maintain moderately loose monetary conditions, and the equity market is likely to maintain an upward oscillatory trend.

It should be emphasized that the tolerance of decision-makers to "mad cow" is low, and the configuration plate needs to pay attention to the rhythm of the operation of the stock market. As far as the bond market is concerned, the yield on the 10-year bond is supported around 3.0%, but the time for the fastest marginal repair is over. On the other hand, the price of industrial products needs a specific analysis of specific problems to examine which recovery is faster on the supply side or on the demand side, and inventory has more important reference value. In the allocation of stocks and bonds, the idea of inclined to the allocation of equity is still desirable, but it is not suitable to chase higher, and the allocation can be increased only after a substantial pullback. 10-year treasury bonds can consider holding a certain allocation position around 3.0%.

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