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Hedge Funds Put On Chinese Recovery

In the US, major stock indices declined on Wednesday amid negative trends in the oil and gas, financial and industrial sectors. At the close of the stock exchange, the Dow Jones decreased by 0.58%, the S&P 500 decreased by 0.26%, and the NASDAQ Composite lost 0.33%. The Construction report showed a 0.7% drop as compared to the previous month. Experts predicted the increase in the number of new buildings.

Among the Dow Jones components, the leader of the fall was Visa Inc., which decreased by 4.7%. The world’s largest online retailer Amazon.com Inc. said on Wednesday that it would stop accepting Visa credit cards in the UK next year because of high fees.

Yesterday, Tesla’s share price increased another 3.3% despite the fact that Elon Musk sold the company’s stocks worth $973 million on Tuesday while continuing to cut his stake for the seventh consecutive trading session. He sold Tesla securities for a total of $6.9 billion last week and $930 million on Monday.

Lucid Group Inc. has gained more than $17 billion in capitalization in recent days, surpassing Ford Motor Co. and General Motors Co. EV stock is rising amid a strong investor interest. The electric car industry is one of the most promising for the next few years.

European stock markets traded yesterday without a single trend. The Stoxx Europe 600 composite index of the region’s largest companies added 0.14%. Italy’s FTSE MIB and France’s CAC 40 increased by 0.1% each. Germany’s DAX remained about the same. And the British FTSE 100 and Spanish IBEX decreased by 0.5% each. The consumer price index in Europe remained unchanged at 4.1% as expected. Last month, inflation rose the least in Portugal and reached 1.8% in annual terms, Finland and Greece to 2.8% each. The strongest jump in inflation was registered in Lithuania (to 8.2%) and Estonia (to 6.8%). In Germany, consumer prices increased to 4.6%, in France and Italy to 3.2%. At the same time, the ECB’s balance sheet continues to grow steadily, which impacts the European currency negatively. The ECB will keep its monetary policy soft until the end of the year, and quite possibly until next spring.

The American Petroleum Institute reported that crude inventories increased by 655,000 barrels last week. The increase in supply is driving down oil prices, but demand is still substantially higher than supply. The White House has asked some of the largest oil consuming countries (China, Japan, India) to consider releasing some of their oil inventories to lower prices and stimulate economic recovery. Oil prices around the world hit seven-year highs late last month.

Major Asian stock indices are trading negative today. In the absence of positive momentum from Wall Street and a relatively calm day in terms of economic data, the mood of investors in the region was subdued. The Japanese index decreased by 0.3%, the Chinese benchmark index CSI 300 decreased by 0.99%, and Hong Kong’s Hang Seng lost 1.42%. The only exception is the Australian ASX 200, which is in positive territory +0.13%.

A week ago, Bridgewater Associates, LP, managed by personalities, including Ray Dalio (founder of the fund), Bob Prince, and Greg Jensen, released its Q3 2021 report. The fund significantly increased its stakes in large Chinese companies, including BABA, HTHT, CD, XPEV, YUMC, BIDU, DIDI, and others. Goldman Sachs analysts also put on the recovery of Chinese companies.

Main market quotes:

  • S&P 500 (F) 4,688.67 −12.23 (−0.26%)
  • Dow Jones 35,931.05 −211.17 (−0.58%)
  • DAX 16,251.13 +3.27 (+0.02%)
  • FTSE 100 7,291.20 −35.77 (−0.49%)
  • USD Index 95.79 −0.13 (−0.14%)

Important events for today:

  • US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
  • US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+2);
  • Natural Gas Storage (w/w) at 17:30 (GMT+2).


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