In equities, the current short-term congestion in growth stocks reminds us of the congestion in consumer stocks in early 2021. In bonds, we see loosening medium and long-term liquidity expectations, while in commodities, the high oil price cycle has likely ended. With high USD volatility, stocks, bonds and exchange rates are appearing slightly risk-off.
Week 3: Asset performance
The main US stock indices fell in the third week of July 2021. The Wind A share index increased 0.84% on a turnover of RMB6.1tr while volume surged. In the lead among Class I industries were coal, steel and petroleum and petrochemicals, while electronics, agriculture and automobiles lagged behind. The Credit Bond Index rose 0.31% and the Government Bond Index rose 0.43%.
Week 4: Value and growth opportunities in major categories
Equities: the current short-term congestion in growth stocks is similar to the congestion in consumer stocks in early 2021.
Bonds: loosening medium and long-term liquidity expectations.
Commodities: the periodic highs in oil prices could have passed.
FX: high USD volatility continues.
Global: Market concerns have abated with the sustainability of the economic recovery; stock, bond and exchange rates are showing a slight risk-off structure.
Risks include: pandemic outbreak resurgence; industry boom falling below expectations; and monetary policy tightening more than expected.
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