This week, the global market is about to usher in a series of major events.

The first is the Federal Reserve's interest rate meeting. According to the latest data, the market currently expects the probability that the Fed will cut interest rates by 25 basis points to 98.9%.

Second, there is the US presidential election. Currently, it is difficult to divide the victory or loss between Trump and Harris, and the competition is almost at an impasse. Wall Street warned that “a few weeks of very chaotic legal disputes” may occur after this controversial election, and the market has not yet calculated the price, which will disrupt the market.

Third, important indices of US stocks will be adjusted. On November 1, the Dow Jones Indices announced the inclusion of Nvidia and Sherwin-Williams (Sherwin-Williams) in the Dow Jones Industrial Average (“Dow”). The decision will take effect before the opening of the market this Friday (November 8).

Fourth, the trading hours for the Japanese stock market will soon be extended. Starting November 5 (Tuesday), the Tokyo Stock Exchange's stock trading hours will be extended by 30 minutes, that is, from the previous 5 hours to 5.5 hours. This is another 70 years since 1954.

Fifth, the 12th session of the 14th National People's Congress Standing Committee was held in Beijing from November 4 to 8. Galaxy Securities pointed out that there is a high level of market attention, especially the one-time additional debt amount and “more than that” incremental policy tools mentioned by the Ministry of Finance earlier, and that the answers may be revealed at this session.

Sixth, quite a few important economic data will be released this week, including China's import and export data for October, foreign exchange reserve data, and CPI data, the final Eurozone manufacturing PMI for October, the US ISM non-manufacturing PMI for October, and the number of US jobless claims for the week up to November 2.

Federal Reserve Interest Rate Decision

From November 6 to 7, local time, the Federal Reserve will hold its 7th monetary policy meeting during the year.

According to the latest data from CME's “Federal Reserve Watch” tool, the probability that the Fed will drop 25 basis points by November is 98.9%, and the probability of keeping current interest rates unchanged is 1.1%. The probability of keeping the current interest rate unchanged by December is 0.2%, the probability of cutting interest rates by 25 basis points is 17.1%, and the probability of cutting interest rates by 50 basis points is 82.7%.

According to the non-farm data previously released by the US, the US in OctoberNumber of people employed in non-agricultural industriesThere was an increase of 0.012 million people, and an increase of 0.113 million people is expected. The previous value was revised from 0.254 million people to 0.223 million people. The US unemployment rate in October was 4.1%, which is expected to be 4.1%, compared with the previous value of 4.1%.

Also, the total number of non-farm payrolls was revised downward from 0.159 million to 0.081 million in August; the total number of people employed in non-farm payrolls was revised downward from 0.254 million to 0.031 million in September. As a result of these revisions, the total number of employed people in August and September was 0.112 million less than the number previously reported.

CITIC Securities believes that the number of new non-farm payrolls added in the US in October 2024 fell short of expectations. Healthcare services and government departments were the main contributors, and durable goods manufacturing and temporary assistance services were the main drag. Affected by hurricanes Helene and Milton and the Boeing strike, the October non-farm payrolls data was greatly disrupted. The number of workers decreased by 0.22 million, and the number of employed people decreased by 0.242 million from the previous value. The changes in demand and supply are in line, which explains why the number of new non-farm payrolls dropped sharply in October but the unemployment rate remained stable. Overall, the US job market is weakening moderately, but the wage growth rate is still steady and there have been no major corporate layoffs. The job market remains healthy, and the October non-farm payroll data continues to be”soft landing” Adding evidence, maintaining the previous judgment that the Federal Reserve will cut interest rates by 25 bps twice during the year.

Japan will extend stock market trading

The Tokyo Stock Exchange (“East Stock Exchange” for short) will extend stock trading hours to 5.5 hours from November 5. The closing time of the transaction was delayed by 30 minutes to 3:30 p.m. This is another time since 1954 that the East Stock Exchange has extended its trading hours after a lapse of 70 years. This move will increase the possibility of resuming transactions after a system failure, and also aims to provide a more convenient environment for overseas investors to participate.

After the change, the trading hours are 9 a.m. to 11:30 a.m., and after 1 hour of lunch break, noon trading is 12:30 to 15:30. Compared with the trading time of major overseas markets, the total trading time of 5.5 hours is the same as Hong Kong, but it is still less than 6.5 hours in New York and 8.5 hours in London.

In order to improve the transparency of closing price formation, the East Stock Exchange will also introduce a “closing bid” system. Only buy and sell orders to determine the closing price are accepted within 5 minutes before the end of the trade. During this period, investors can submit a trading order at the specified price, but the actual transaction will not occur, and the stock price will not change. The closing price will be determined at 3:30 p.m., depending on the order situation.

According to information, a large-scale system failure occurred on the East Stock Exchange in October 2020, making it impossible to trade throughout the day. In order to ensure the trading time as much as possible in the event of a similar failure, the East Stock Exchange began discussing the extension and later decided to make changes in line with the system update. The East China Stock Exchange recognizes the need to respond to changes in the market environment and the diverse needs of investors, while further improving the convenience, international competitiveness and resilience of market users. To address these issues, in May 2021, the East Stock Exchange set up a working group to strengthen the functions of the cash stock market. Based on discussions in the working group, the East Stock Exchange then issued the “Action Plan to Strengthen the Function of the Cash Stock Market” in October 2021. To enhance the functionality of the cash stock market, the Tokyo Stock Exchange plans to extend the trading time by 30 minutes.

The Dow will be incorporated into Nvidia

On November 1, Dow Jones Indices announced the inclusion of Nvidia and Sherwin-Williams (Sherwin-Williams) in the Dow Jones Industrial Average (“Dow”). The decision will take effect before the opening of the market this Friday (November 8).

According to the Dow Jones announcement, Nvidia (NASD: NVDA) will replace Intel and Sherman (NYSE: SHW, global paint supplier) will replace Dow Chemical. According to the press release, the index adjustment is to ensure that the semiconductor industry and materials industry are more representative.

According to media analysts, the inclusion of Nvidia is a “major restructuring” of this blue-chip index, reflecting the booming development of artificial intelligence and a major shift in the semiconductor industry.

Unlike the S&P 500 index's “shareholding market value weighting,” the Dow uses “price weighting,” which means that price changes in high-priced stocks have a greater impact on the index level than changes in the price of low-priced stocks. This mechanism makes it difficult for extremely expensive stocks to be included in the Dow.

In May of this year, Nvidia announced that it would carry out common stock according to the “1 split of 10” ratioStock splitsAfter the stock split, the price per share changed from around $1,000 to slightly above $100. At the time, some analysts pointed out that the move was probably to prepare for inclusion in the Dow.

With the addition of Nvidia, 4 of the 6 US stock “trillion market capitalization club” companies have already been included in the Dow. Google's parent company Alphabet and Meta Platforms are not among them, and Amazon joined in February of this year.

Editor/Somer