In today’s briefing:
- Ohayo Japan | Markets Surge to Records on Fed Easing Signals
- China Strategy: Trading the A-H Premium Stocks
- Japan Morning Connection: Japan Set to Rise with the Rhetoric from Powell More Dovish than Expected
Ohayo Japan | Markets Surge to Records on Fed Easing Signals
- The Dow Jones Industrial Average surged to an all-time high Friday, climbing 846 points or 1.9% to close at a record 45,631
- Federal Reserve Chair Jerome Powell signaled potential monetary policy easing next month during his Jackson Hole speech.
- Megacap technology stocks led the rally, with Tesla jumping 6%, Amazon and Alphabet each rising over 3%, Meta Platforms gaining more than 2%, and Nvidia adding 1.7%
China Strategy: Trading the A-H Premium Stocks
- The A-H share premium has narrowed by an average of 35pp YTD. Despite the recent A-share recovery, the premium remains depressed relative to the start of the year.
- Aggressive players may keep playing the leaders in the trend – the Chinese insurers like China Life (2628 HK) and securities companies like Guolian Minsheng Securities H (1456 HK).
- Conservative players, however, may look at the laggards in AH premium contraction like the Chinese banks – ICBC (H) (1398 HK) and China Merchants Bank H (3968 HK).
Japan Morning Connection: Japan Set to Rise with the Rhetoric from Powell More Dovish than Expected
- Big jump in US homebuilders and chemical names involved in PVC/housing should jump start Shin Etsu.
- Toto increasing its US production capacity aligns with its pivot away from China and makes this more interesting as housing play.
- Meta’s huge capex spending plans not enough to satisfy its need for AI computing as it buys capacity from Google.
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