Market review:

China stocks generally stayed firm after some profit taking in the morning trading hours, with SHA declined about 0.02% . Several Fed governors offered hawkish comments overnight and placed some pressure on risky assets from equity to commodity.

Research Notes:

Money outflowed from Finance, Real Estate and Internet sectors the most. Tianjing Teda Co.(000652.sz),a real estate developer, rallied to limit-up for its possible plan to participate in the privatization of Wanda Group, another major real estate developer.

The hint to raise interest rate from Fed officers failed to lift DXY over the 95 threshold and we believe the rebound can hardly continue. CNYUSD touched 6.61 level, a high since end of June before it fell back to 6.63 with increasing the econ growth could somehow rebound in the rest of the year. In commodity market, coke, soybean and rapeseed led the rally while coal and rebar declined. The agricultures got support from increased US flood risk and incoming mid-autumn holiday. As Fed would release its minutes, investors are cutting some exposure to avoid some volatility surge. Yet in our opinion, the dovish tone should remain for several months more and it’s difficult to find anything convincing for a rate raise in the minutes.SZ-SH connection and “one belt one road” sectors remained as our top picks for the next 1~2weeks and we believe the current firmness could continue to the start of G20 meeting in Hangzhou.