Hot news of the week

• The United States plans to ban telecom and video surveillance equipment from five companies, including Huawei.

On Thursday, the Federal Communications Commission voted unanimously to approve a plan to ban the use of telecommunications and video surveillance equipment from five Chinese companies in US telecom networks, citing "national security threats". The companies involved include Huawei, ZTE, Dahua, Haikangwei and Hyunda.

• Technology stocks strengthen the Kechuang 50 index is up more than 4% this week to dig deep into the semiconductor industry chain.

Weighed down by the weakness of heavyweights, the market fluctuated lower this week. This week, the Shanghai Composite Index is down 1.80%, the Shenzhen Composite Index is down 1.47%, the CSI 300 Index is down 2.34%, and the gem Index is down 1.8%. Affected by the strengthening dollar, international commodity prices continued to weaken, dragging down cyclical sectors; although some second-and third-tier liquor stocks rose against the market, first-tier liquor stocks were weak. Stimulated by the positive side of the industry, technology stocks have performed well this week, especially in chips and semiconductors. Industry insiders believe that next week investors can continue to pay attention to the trend of technology stocks, focusing on tracking the trend of gem and Science and Technology Innovation Board.

• Huawei terminal equipment will be fully upgraded to Hongmeng operating system this year.

Wang Jun, president of Huawei's smart car solution BU, revealed at the 2021 China Automobile Forum that Huawei's terminal equipment will be fully upgraded to the Hongmeng operating system this year, and the overall scale is expected to exceed 200 million by the end of the year.

• Goldman Sachs Group: the Fed's more hawkish expectations are bad for the dollar.

Goldman Sachs Group said he still expected the dollar to weaken because of the high value of the latter and the continued recovery of the global economy. But the Fed's more hawkish expectations and upcoming discussions about scaling back bond purchases could be bad for dollar bears in the short term. Goldman Sachs Group withdrew his trading proposal to long the euro against the dollar after the Fed's interest rate decision.

• The US government will invest 3 billion to help COVID-19 's oral medicine be available by the end of the year.

The U.S. Department of Health and Human Services (HHS) announced on Thursday (17th) that it will invest more than $3 billion in the development and production of COVID-19 drugs, including drugs that can be taken at home at the early stage of the disease, which are expected to be available as soon as the end of the year, with the goal of making these drugs a new force in avoiding severe illness and hospitalization.

• UK retail sales fell 4.1% in May from a month earlier.

Retail sales in the UK fell 1.4 per cent in May, reversing a sharp rise in April after the blockade was relaxed, according to figures released by the Office for National Statistics on Friday. The biggest contributor to the decline in sales was the food store, which fell 5.7%. The loosening of restrictions in the catering and hotel industry has led consumers to abandon supermarkets and go to restaurants and bars, according to the Office for National Statistics. Sales in food stores rose 2.3 per cent in May, with hardware and furniture stores showing the largest increase of 9 per cent. Fuel sales and non-food retailers also showed strong growth, up 19.3 per cent and 17.8 per cent, respectively. Compared with February 2020, total online retail sales in May 2021 increased by nearly 60%, while brick-and-mortar store sales fell by 1.3%.

• The Federal Reserve keeps its benchmark interest rate unchanged and raises inflation expectations sharply

The Fed sharply raised its inflation expectations for this year on Wednesday and advanced the time frame for its next rate hike, but did not say when to start cutting back on its aggressive bond-buying program. The federal open market committee said in a statement after its policy meeting on Wednesday that it would keep the target range of the federal funds rate in the range of 0-0.25% and keep its monthly bond purchases at $120 billion. The Fed also raised the interest rate on excess reserves to 0.15% from 0.10%. The bitmap of Fed officials' expected path to raise interest rates shows that seven Fed officials expect to raise interest rates by the end of 2022; the forecast was made for four people in March. The Fed's median forecast shows that it will raise interest rates twice by the end of 2023.

• Goldman Sachs Group advanced the Fed's expectation of raising interest rates to Q3 in 2023, but there is a high chance of change.

JanHatzius, chief economist of Goldman Sachs Group, said in a research note on Thursday that they had revised the Fed's expectation of raising interest rates for the first time from the first quarter of 2024 to the third quarter of 2023 on the grounds that the inflation threshold for the central bank to raise interest rates had been lowered.

However, Goldman Sachs Group also pointed out that the possibility of the Fed raising interest rates by the end of 2023 "is only slightly more than 50 per cent, because lower-than-expected inflation and a rapid slowdown in economic growth can easily derail interest rate increases as financial support weakens." In terms of tapering, the Hatzius said it still expected the Fed to first hint of tapering in August or September, followed by a formal announcement in December that it would begin the process of tapering early next year, although the risks tended to start earlier.

Review of the market

The performance of the three major indexes of US stocks has been mixed this week.$Dow (.DJI.US) $Down 1.58%$S & P 500 (.SPX.US) $Down 1.91%$Nasdaq Composite Index (.IXIC.US) $It fell by 0.92%.

Us retail sales data for May this week fell 1.3% from a month earlier, mainly cutting spending on cars, furniture, electronics, building materials and other projects, and the service sector began to pick up.

Viewpoint of institutional allocation

• Morgan Stanley: consumption and technology are still the relatively determined main line of long-term investment

Xu Da, assistant director of equity investment at Morgan Stanley Huaxin Fund and fund manager, said that economic fundamentals have recovered rapidly from the epidemic this year, including large finance and mid-upstream industries during the year, as well as alternative consumer industries that have not yet fully recovered.

However, in the long run, the direction of economic transformation, that is, consumption and science and technology, is still a relatively definite main line. Although the valuations of some companies are on the high side after the continuous rise from 2016 to 2020, the leading companies of high-quality tracks enjoy a high valuation premium around the world. " Therefore, for consumer and technology track companies, we can not generalize, blindly avoid high-valued varieties, must be combined with the growth of the company's performance. In the short term, partial high valuations may take some time to digest, but after digestion is an opportunity to intervene, because earnings expectations have not changed and may even exceed expectations. "

$Patek Select Brand Fund (LU0280433847.HK) $

Blackrock New Generation Science and Technology Fund (LU1861215975.HK) $

• Citic Construction Investment: recently, the financing pressure of real estate enterprises has increased, and it is difficult to raise the valuation of the industry.

CSC FINANCIAL CO.,LTD research newspaper pointed out that recently, the real estate supply chain financing supervision strengthened, to a certain extent, will increase the financing pressure of real estate enterprises. When the property market continues to heat up, the national mortgage interest rates begin to rise, which will have a certain impact on subsequent sales, and there is a greater probability of cooling on the demand side in the future. In the case of the high prosperity of the land market and the property market, it is more difficult to ease the regulation and control policy, and it is more difficult for the plate valuation to rise. The overall profit margin of the industry has been difficult to return to the high level in the past, it is expected that in the future we need to rely more on fine operation to improve development efficiency to obtain excess income, and need more projects to maintain performance growth. The industry will enter the era of overall dominance of the leader.

Blackrock US Government Mortgage Bond Fund (LU0096258446.HK) $

• Moto: it is optimistic that mainland property management stocks have room for short-term rise.

According to a report released by Motors, it is expected that the mainland property management stocks will have about 20% room to rise by early August, indicating that they have lagged behind in a narrow range of more than two months, and it is expected that during July, various property management stocks will announce earnings one after another, pushing up the share prices of the sector. The bank expects 10 of the 15 property management companies it tracks to announce Yingxi.

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