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Market review: June 06, 2016

Fang submitted 2016-06-06 15:31:05

Market review:

China stocks mostly stay unmoved as investors stay put for the turning around of Fed Rate expectation in June. Much lower than expected job addition in May reduced the probability of Fed Rate Hike in June to about 10%.As a consequence money rushed into commodities and cyclical stocks. Money flowed into Complex Material, Nonferrous Metal and Aviation sectors the most. Jilin Highway rallied to limit-up as investors expected Gov to encourage more private investment into infrastructure development projects, such as highways and harbors. As fear for Fed Rate Hike mostly vanished, speculators pushed futures prices of iron ore, rebar and coal up to around limit-up levels, outperformed the previous leader soybean meal and rapeseed meal.CNYUSD also strengthened for the global selling of USD. We believed that the rally of metals and cyclical stocks can go on till the Dragon Boat Festival holiday as many funds would play the short-squeeze strategy to take advantage of margin hike. While SHA would stay around 2900~2950 region as US-China econ talk taking place and several key macro data to be released. Though the near term performance‘s largely data-dependent, we believed that it’s still a proper time to load up shares of agriculture, food&beverage and new energy car setors.

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