Understanding the Market | Non-ferrous stocks lead the decline as the Federal Reserve hawkishly cuts interest rates by 25 basis points; institutions previously stated that the expectations for a rate cut in September are relatively sufficient
The non-ferrous stocks generally fell, with JIANGXI COPPER down 2.48%, CMOC down 2.85%, CHALCO down 2.12%, and ZIJIN MINING down 1.26%. The Federal Reserve announced a 25 basis point rate cut to a range of 4.00%-4.25% on September 17, and although the rate was cut, Chairman Powell stated that a long-term rate-cutting cycle would not be initiated. Cathay Securities pointed out that the expectation of rate cuts is rising, and the liquidity turning point will boost the prices of precious metals and industrial metals. The market's focus on the subsequent rate-cutting path and Sino-U.S. negotiations will increase the volatility of metal prices
According to the Zhitong Finance APP, non-ferrous stocks are among the biggest losers. As of the time of publication, Jiangxi Copper Co., Ltd. (00358) is down 2.48%, trading at HKD 25.2; Luoyang Molybdenum Co., Ltd. (03993) is down 2.85%, trading at HKD 12.28; China Aluminum (02600) is down 2.12%, trading at HKD 7.38; Zijin Mining (02899) is down 1.26%, trading at HKD 28.14.
In terms of news, according to CCTV News, on September 17 local time, the U.S. Federal Reserve concluded a two-day monetary policy meeting and announced a 25 basis point reduction in the target range for the federal funds rate to between 4.00% and 4.25%. Although the Fed cut rates as expected, during the press conference following the rate decision, Fed Chairman Jerome Powell emphasized that this move does not indicate the beginning of a long-term rate-cutting cycle; Powell acknowledged the weakness in the labor market but believes that the current situation is not sufficient for the Fed to implement more significant rate cuts.
Cathay Pacific Securities previously released a research report stating that the U.S. August CPI was basically in line with expectations, coupled with the increasingly evident weakening of the job market, leading to a continued rise in rate cut expectations. The anticipated liquidity turning point has significantly boosted the prices of precious metals and industrial metals. As the September interest rate meeting approaches, the market is waiting for guidance from the Fed on the subsequent rate cut path, while the ongoing negotiations between China and the U.S. may amplify metal price fluctuations. The report pointed out that for industrial metals, the continuous weakening of the job market has raised concerns about a market recession, but considering the support from domestic and foreign policies, along with the upcoming peak demand season, industrial products are expected to continue to perform well
