Market review:

China stocks declined before the weekend with SHA fell about 0.19%.Investors mostly stayed cautious before the much watched US July unemployment data and some profit taken before possible market fluctuation.

Research Notes:

Money outflowed from Electronics, Software Development and Petrochemical sectors the most. P2p Financial Information Service Co.(600696.sh), an internet finance service provider, rallied to limit-up as investors speculated this firm which suffered from heavy-loss from its business could be overtaken soon.

DXY stayed sideway before the unemployment data and CNYUSD fell for a second day, also suppressed by some rumor on possible RRR cut by PBOC in the weekend, before release of many China macro data the next week. Commodities also got supported by such expectation, with cotton, coal and iron ore led the rally. Some investors concern about the recent dry and hot weather in US Texas area which added some weather premium to this agri-commodity. Despite the possible sluggish of China econ data, we still believed that SHA could climb back to 3000 around end of August with more gov stimulus policy, not limited the long-dued RRR cut. New Energy sector is still the top pick as gov focus on this industry to provide supportive methods and consumer staple with medicine are two defensive sectors we would like to recommend in case of unexpected weakness of the market.

Copyright by FangQuant.com