Preface

On July 18, the U.S. stock market experienced mixed results with the Nasdaq reaching a new historical high. The Nasdaq Golden Dragon China Index rose by 0.6%, briefly surging over 2% during the trading day, reflecting a positive trend in Chinese equities. This article delves into the specific market movements observed and the implications for Chinese assets.

Lazy bag

Key takeaways from July 18: Nasdaq narrowly climbs 0.05%, marking its fifth consecutive increase. Chinese equities and precious metals see significant gains.

Main Body

On July 18, the U.S. stock market exhibited varying performances among the major indices. The Dow Jones Industrial Average declined by 0.32%, while the S&P 500 slipped by a marginal 0.01%. In contrast, the Nasdaq Composite Index recorded a modest increase of 0.05%, achieving yet another historical high. Over the past week, the Dow dipped by 0.07%, the S&P 500 advanced by 0.59%, and the Nasdaq surged by an impressive 1.51%.

Specific tech giants showed varied movements; Tesla's stock rose by over 3%, Amazon increased by more than 1%, while Microsoft experienced a slight decrease. Notably, Nvidia hit a historical peak during the day but eventually closed down by 0.34%. Throughout the week, Tesla's stock rose by over 5%, while Nvidia enjoyed an eight-day winning streak with a cumulative gain exceeding 4.5%.

Chinese shares, particularly those included in the Nasdaq Golden Dragon China Index, showed significant appreciation, increasing by 0.6% with intraday gains surpassing 2%. Several key Chinese stocks recorded substantial growth, including LinkedIn with a remarkable 31% surge, Hesai Technology with an increase of more than 8%, and Kingsoft Cloud and Futu Holdings, both adding around 7% to their share values. Qihoo 360, JD.com, and ZTO Express also saw increases of over 3%.

These movements are supported by Citic Securities' analysis, which highlights a growing trend of asset preference shifting away from the U.S. dollar, leading to a steady revaluation of Asian equities. As a result, Hong Kong and other emerging market stocks are performing well. The Chinese market, meanwhile, remains an attractive valuation landscape.

In the commodities sector, precious metals futures saw price upticks on July 18, with COMEX gold futures rising by 0.30% to $3355.5 per ounce and COMEX silver futures increasing by 0.32% to $38.425 per ounce. Despite these gains, both metals faced weekly declines, with gold down 0.25% and silver declining 1.36%. On the energy front, international oil prices experienced small declines, with WTI crude and Brent crude falling by 0.3% and 0.42%, respectively. Zhongtai Securities commented on the potential "stepwise ascent" of gold prices, driven by increasing expectations of interest rate cuts and rising geopolitical and economic uncertainties, highlighting gold's growing appeal as a safe-haven asset.

A noteworthy political development involved President Trump's signing of the first federal regulatory framework for stablecoins, aimed at enhancing the management of their issuance and associated reserve assets. Trump emphasized stablecoins' potential to boost demand for U.S. treasury securities, lower interest rates, and reinforce the dollar's position as the global reserve currency.

Key Insights Table