Understanding the Market | Non-ferrous stocks surged today as US CPI data strengthened interest rate cut expectations; institutions are optimistic about the initiation of a non-ferrous bull market
Today, non-ferrous stocks rose broadly, with JIANGXI COPPER up 5.84%, CMOC up 5.26%, and LINGBAO GOLD up 4.27%. After the release of the U.S. July CPI data, the market expects the Federal Reserve to cut interest rates in September, with a probability of over 90%. CITIC Securities pointed out that poor economic data and Trump's nomination of new advisors further strengthened expectations for interest rate cuts, driving the non-ferrous sector up. Domestic policy optimization of production factors is favorable for rising metal prices, and a non-ferrous bull market is expected to start
According to Zhitong Finance APP, non-ferrous stocks saw a broad increase today. As of the time of writing, Jiangxi Copper (00358) rose by 5.84% to HKD 18.49; Luoyang Molybdenum (03993) increased by 5.26% to HKD 10.6; Lingbao Gold (03330) climbed by 4.27% to HKD 11.72; China Hongqiao (01378) went up by 3.42% to HKD 23; and Zijin Mining (02899) rose by 3.15% to HKD 23.6.
On the news front, on August 12 local time, the U.S. Bureau of Labor Statistics released data showing that the U.S. CPI rose by 0.2% month-on-month in July, in line with expectations, slowing down by 0.1 percentage points from the previous month. Following the data release, traders bet that the Federal Reserve would cut interest rates in the remaining three meetings later this year. The CME Group's "FedWatch" tool indicated that the probability of a 25 basis point rate cut in September rose above 90%. Additionally, U.S. President Trump again urged the Federal Reserve to cut rates and threatened to consider allowing a significant lawsuit against Fed Chairman Jerome Powell.
CITIC Construction Investment Securities recently pointed out that the U.S. economic and employment data performed poorly, coupled with Trump's nomination of Stephen Moore as chairman of the Council of Economic Advisers to the Federal Reserve, reinforcing market expectations for a rate cut in September. The non-ferrous sector saw broad gains. Besides the monetary easing brought about by the Federal Reserve's rate cut cycle, the domestic "anti-involution" policy is optimizing production factors, enhancing profitability at all levels, and improving market expectations, which is conducive to the transmission of rising metal prices to downstream sectors. Furthermore, the valuation of the industrial metals sector is at a relatively low level, indicating potential for upward correction. The non-ferrous bull market driven by both EPS and PE is starting to take off
