MHMarkets：September 12, 2023 - Fundamental Reminder

☆Opec will publish its monthly oil market report today.

☆At 24:00, the EIA releases its monthly short-term energy outlook report.

☆The next day at 1:00, Apple will hold its fall product launch event.

☆The next day at 4:30 USD API Crude Oil Stock Change (SEP/08)

Market Overview

Review of Global Market Trend

On Monday, the dollar index fell below the 105 mark, falling as low as 104.42 during the day, before closing down 0.51% at 104.51. Treasury yields remained ranged, with the two-year yield failing to rise above 5% to close at 4.993% and the 10-year yield at 4.292%.

Spot gold rose and then fell, after repeatedly testing the 1930 mark, before giving up some gains in the U.S. session to end up 0.11% at $1,922.39 an ounce. Spot silver at last check rose 0.67% to $23.07 an ounce.

Crude oil rose slightly, with WTI crude reaching an intraday high of $88.11 before giving up some gains to end up 0.52% at $87.28 a barrel. Brent crude remained above the $90 mark before settling up 0.22% at $87.28 a barrel.

The Dow Jones Industrial Average closed up 0.25%, the Nasdaq up 1.14%, the S&P 500 up 0.67%, Tesla up 10%, after Morgan Stanley said that thanks to Dojo supercomputer, Tesla shares will rise sharply, and upgraded Tesla to “outperform” rating, Qualcomm rose 3.9%, popular Chinese stocks rose, Baekche Shenzhou rose 8.6%, Xpeng Motor rose 6.5%, while Bilibili and NetEase rose more than 3%.

European stocks closed higher across the board, with Germany's DAX30 up 0.39%, Britain's FTSE 100 up 0.25% and Europe's Stoxx 50 up 0.4%.

Market Focus

1. ARM's U.S. IPO was 10 times oversubscribed or closed early.

2. White House statement: The United States and Vietnam signed a semiconductor supply chain agreement.

3. Japan's Tokyo Electric Power Company has announced the end of the first discharge of contaminated water from the Fukushima Daiichi nuclear power plant into the sea.

4. The 10-year JGB yield rose to 0.7% for the first time since 2014; The BOJ lends to banks to keep yields down.   

Geopolitical Situation

Conflict Situation

1. Ukrainian military intelligence: Ukraine retakes offshore oil rig off Crimea.

2. Russian Defense Ministry: Russia shot down Ukrainian drone in Kursk region.

3. UK PM: Russia fired multiple missiles at civilian cargo ships in the Black Sea on August 24.

4. Russian Defense Ministry: Two Tu-22M3 long-range bombers carried out a nearly five-hour planned flight over the Baltic Sea.

5. Traffic on the Crimean bridge has been halted, according to Russia's Crimean bridge management agency.

Assistance Situation

1. German Foreign Minister: Germany will provide an additional 20 million euros in humanitarian aid to Ukraine.

2. Four U.S. officials: The Biden administration is close to approving the supply of long-range missiles to Ukraine, including Tactical missile systems equipped with cluster bombs (ATACMS) or multiple rocket launchers (GMLRS).

3. Ukrainian Foreign Minister: Ukraine has made progress in talks to receive Taurus long-range missiles from Germany.

Energy Situation

1. German Foreign Minister: Russia will again target Ukrainian energy facilities in autumn and winter.

2. Baker Hughes, Schlumberger and Halliburton are facing questions about their business in Russia. Democratic U.S. Senator Menendez sent a letter to oil service companies about Russia.

3. Putin signed a presidential decree, extending for one year the validity of the relevant ban on the business of Gazprom and its subsidiaries with some foreign enterprises, international organizations and individuals related to them in the gas sector.

Institutional Perspective

01

Goldman Sachs

【Goldman Sachs：U.S. stocks are poised for more gains in twists and turns】

Sept. 11 - Continued progress toward a soft landing in the U.S. economy will support S&P 500 earnings and boost the index over the next 12 months, Goldman Sachs said, while warning that the road to the end of the year could be bumpy. Strategists led by David Kostin set a year-end target for the S&P 500 at 4,500, which implies little upside, but they see about 6% upside over the next 12 months as the index climbs to 4,700. They said the index's P/E multiple of 19 was “reasonable” based on the benchmark macro outlook, with risks “skewed to the upside”. With a soft landing largely priced in, economic growth and inflation data could create a “choppy path” for stocks in the coming months.

02

SOCIETE GENERALE

SOCIETE GENERALE：The U.S. economy is expected to fall into recession in mid-2024

Subadra Rajappa, head of US rates strategy at Societe General, said a recession was “still very likely” and expected to come in the middle of next year rather than early. Economic data due this week will guide market expectations for what the Fed will do next week and whether it will raise rates in November. “We see higher spending in the summer. Consumers have shown remarkable resilience, but as the moratorium on student loans ends, savings rates start to come down and defaults start to rise, I think consumers will start to face more pressure in the fourth quarter of this year. That could curb the rise in U.S. yields.” Mr. Rajappa said Treasury bills were attractive at the moment. “I think the market has fully priced in that the Fed will keep rates higher for longer. ”If the economy does start to slow and the Fed starts to shift to an easier or less accommodative policy, then the front end of the curve will start to pick up.

03

MUFG

【MUFG：Gold demand from emerging markets could push prices higher】

September 8 - Gold prices did show signs of stabilizing earlier this week after suffering their biggest drop in more than a month. Russia and Saudi Arabia extended their agreement on production cuts into December, sending oil prices soaring, helping to push Treasury yields higher and in turn the index higher. Looking ahead, in addition to rising recession fears in emerging markets, gold demand from emerging market central banks has continued to show strength this year, driven by rising geopolitical tensions and reserve diversification interests. That suggests gold is poised to move higher, though it could be a slow climb rather than a sustained surge. A recent survey of fund managers suggests they are optimistic about gold prices in 2024.