Dow Records Best August Single-Day Gain, ARM Soars 25% On IPO

The U.S. stock market closed higher on Thursday, with the Dow Jones rising over 330 points.

The successful IPO of ARM, a chip design company under SoftBank, boosted market sentiment.

August’s U.S. PPI and retail sales data both exceeded expectations, while initial jobless claims for the previous week rose to 220,000 as expected.

The European Central Bank raised interest rates for the 10th consecutive time.

The Federal Reserve will commence its monetary policy meeting on September 19th, and the market anticipates that the August CPI data will not alter the Fed’s policy trajectory.

According to the CME Group’s FedWatch tool, the market currently predicts a 97% chance that the Fed will maintain interest rates unchanged next week.

U.S. Stocks

Fundamental Analysis:

ARM opened at $56.10 on Thursday, briefly surging by 30% during the day and closing at $63.59, pushing its market capitalization above $65 billion. Including restricted stock, ARM’s fully diluted valuation is close to $68 billion. ARM’s outstanding performance validates SoftBank founder Masayoshi Son’s strategy.

Moderna’s stock price continued to rise, gaining 3.9% on Thursday following successful phase three testing of its flu vaccine. Meta increased by 2.2%, Tesla by 1.8%, Alphabet by 1.1%, and Apple saw a 0.9% increase after its product release.

Goldman Sachs performed the best among Dow Jones constituents, and Caterpillar, a construction equipment company, rose by 2.4%. Disney is reportedly in preliminary talks to sell ABC to Nexstar, causing Disney’s stock to rise by 1.2%.

Technical Analysis:   

(S&P 500 Index, 1-day chart)

Market Trends:

  • Dow Jones Industrial Average closed up 331.58 points, a 0.96% increase, at 34,807.11 points.
  • Nasdaq Composite Index increased by 112.47 points, a 0.81% rise, to 13,926.05 points.
  • S&P 500 Index gained 37.66 points, an 0.84% increase, reaching 4,505.1 points.

Hong Kong Stocks

The People’s Bank of China unexpectedly lowered the reserve requirement ratio, coupled with positive mainland economic data, leading to a rebound in the Hong Kong stock market.

The Hang Seng Index opened 106 points higher at 18,154 points, briefly dipping 17 points to 18,030 points during the day.

China’s August industrial production and retail performance exceeded expectations, driving the market higher.

By noon, the Hang Seng Index had risen by 1.65%, the Hang Seng TECH Index by 1.51%, with a total market turnover of 53 billion.

In terms of sectors, healthcare outsourcing, semiconductors, gold, and biotechnology led in gains, while jewelry and forestry sectors experienced declines.

Notable stocks included blue-chip financial and biotechnology companies, with WuXi Biologics rising by 5.5%, SMIC, and Zijin Mining each gaining over 4%, and China Ping An increasing nearly 3%.

Technical Analysis:

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) increased by 1.65% to close at 18,326.12 points.
  • Hang Seng Tech Index (HSTECH) rose by 1.51% to close at 4,120.61 points.
  • Hang Seng China Enterprises Index (HSCEI) increased by 1.5% to close at 6,369.35 points.

FTSE China A50 Index

Fundamental Analysis:

For the second time this year, the reserve requirement ratio was lowered on September 15th, causing fluctuations in the A-share market’s three major indices.

The market initially showed weakness but gradually rebounded as economic data for August was released, with all three indices turning positive.

In terms of industry sectors, medical services, biotechnology products, jewelry, medical devices, and pharmaceuticals saw the highest gains, while communication equipment, communication services, electronic chemicals, computer equipment, and the power industry experienced declines.

Themes like CRO, innovative drugs, weight-loss drugs, automotive chips, and traditional Chinese medicine concepts were active.

Technical Analysis:

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) fell by 0.28% to 3,135.31 points.
  • Shenzhen Component Index (SZCOMP) rose by 0.11% to 10,208.75 points.
  • ChiNext Index (CHINEXT) increased by 0.11% to 2,014.13 points.
  • SSE STAR Market 50 Index (SSE50) gained 1.04%, reaching 890 points.

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