Zhitong Decision Reference | Pay attention to whether the Federal Reserve's interest rate cuts can exceed expectations

[Editor’s Market View]

Despite negative rumors surrounding innovative drugs, Hong Kong stocks continue to strengthen under the influence of internet giants. Last week, the Hang Seng Index broke through the 26,000-point mark.

This week, market sentiment may experience some disturbances. A spokesperson for the Ministry of Commerce revealed that, as agreed by both China and the United States, He Lifeng, a member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, will lead a delegation to Spain from September 14 to 17 for talks with the U.S. side. The two parties will discuss U.S. unilateral tariff measures, the abuse of export controls, and economic and trade issues related to TikTok. Normally, as long as the talks take place, the market tends to react positively. However, there is a strong sense of tension ahead of this meeting: on September 12, the U.S. Department of Commerce announced that several Chinese entities would be added to the export control "entity list." The Ministry of Commerce stated that it would take necessary measures and decided to initiate an anti-dumping investigation on imported related simulation chips originating from the U.S. starting September 13, 2025. Additionally, the Ministry of Commerce has launched an anti-discrimination investigation into the U.S. measures related to the integrated circuit sector. This naturally benefits semiconductor self-control and domestic substitution. However, if other aspects of the talks do not go well, it could have an impact.

The market has high expectations for the Federal Reserve's first interest rate cut this year, with a 25 basis point cut being standard and a 50 basis point cut providing real stimulus. Attention is also on the release of August economic data from China this week, including retail sales, industrial added value, and housing prices in 70 cities.

Overall, there will be speculation before the Federal Reserve cuts rates, but if the outcome does not exceed expectations, caution should be exercised regarding capital realization.

In terms of hot topics, the State Council: aims to promote the innovation and development of biomedical technology in China, accelerating technological research and the application of results. The country is strongly supporting innovative drugs.

The Ministry of Industry and Information Technology and eight other departments: are advancing the pilot program for the access and road use of intelligent connected vehicles, conditionally approving the production access of L3 level models. Intelligent driving is the major direction for the future.

Qingdao Energy Research Institute's solid-state battery technology is set to achieve mass production of 30-micron sulfide films by 2027. The development speed of solid-state batteries exceeds expectations.

At 8 PM Beijing time on September 12, the iPhone 17 series officially opened for pre-sale, immediately triggering a buying frenzy worldwide. According to data from the JD platform, the total number of reservations for the entire iPhone 17 series has surpassed 7 million, with the standard model becoming the undisputed "popular king" among the series. Apple's supply chain stocks have already warmed up last Friday.

On September 18, Meta will hold the Connect conference, where the market expects the release of Meta's first consumer-grade smart glasses. Let's see if there are any unexpected announcements.

[This Week's Golden Stock]

Chow Tai Fook (06168)

Chow Tai Fook (06168) announced that through its wholly-owned subsidiary, it will invest its own funds in Going Securities (HK) Limited, indirectly holding a 15% stake in Gao Ying Securities; at the same time, Weifutong Technology Co., Ltd. (a wholly-owned subsidiary of Shanghai Huafeng Superfiber Technology Co., Ltd. (300180.SZ)) will also indirectly acquire a stake in Gao Ying Securities through its wholly-owned subsidiary SwiftPass Hong Kong Limited, holding 18%. As of the date of this announcement, all parties have completed the signing of the investment agreement and payment, and this strategic investment has officially landed GaoYing Securities is a licensed corporation in Hong Kong (Central Number: BPS863), holding licenses for regulated activities in categories 1, 2, 4, 5, and 9, and serves as the vice-chairman unit of the "Hong Kong Web 3.0 Standardization Association." The collaboration lays a long-term strategic foundation for shareholders in the digital finance sector. All parties plan to integrate mature resources such as cross-border payments, precious metals, and capital markets, collaboratively promoting the upgrade of GaoYing Securities' virtual asset license and expanding innovative businesses like the tokenization of real-world assets (RWA).

This move marks Chow Tai Fook's formal cross-border layout into RWA, leveraging its asset attributes and channel advantages to explore compliant development paths and new growth poles in the Hong Kong digital asset market.

【Industry Observation】

Since the pre-sale began on the evening of September 12, the iPhone 17 series has seen explosive sales across various platforms. On JD.com, sales exceeded last year's total for the first day within one minute, and the official website's shipping times have generally extended to 3-4 weeks. This strong pre-sale performance confirms the success of Apple's "more for the same price" product strategy, with hardware upgrades across the entire lineup in screens, cooling, audio, etc., effectively stimulating replacement demand and restoring market expectations regarding iPhone's innovation capabilities.

Apple is expected to release a foldable iPhone and AI glasses in 2026, and a 20th-anniversary iPhone in 2027. AI is accelerating: Cook stated that Apple is significantly increasing its AI investments and is "very open" to AI acquisitions without limiting the scale of targets, positioning AI as the company's highest priority, demanding "at all costs, win the AI competition." In September, iOS 26 and other systems will upgrade from GPT-40 to GPT-5, while also opening up basic model APIs for third-party calls. Apple also announced that it will launch personalized Siri features in 2026.

Currently, the valuation of the Apple supply chain remains at a relatively low level. With tariff issues being resolved, Apple increasing AI investments, and the rhythm of new products, the Apple supply chain is expected to enter a valuation recovery and prosperity upturn in the coming years. Key stocks to watch in Hong Kong include GoerTek (01415), Sunny Optical (02382), and AAC Technologies (02018).

【Data Watch】

According to data released by the Hong Kong Stock Exchange, the total number of open contracts for the Hang Seng Index futures (September) is 129,223, with a net open interest of 43,288 contracts. The settlement date for the Hang Seng Index futures is September 29, 2024.

The Hang Seng Index is positioned at 26,388 points, with a dense area of bearish certificates near the mid-axis, indicating bullish momentum for the index. The market is focused on the Federal Reserve's interest rate reduction efforts in September; however, expectations for significant rate cuts have somewhat receded, leading to a rebound in two-year Treasury yields. The Hang Seng Index is bullish this week.

【Editor's Remarks】

We are no longer at the beginning of a bull market. At this point in time, some institutional funds are quietly reallocating from previously high-performing technology growth and cyclical sectors to increase allocations in consumer-related essentials and offline economies