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Cailianshe News on August 6 (Reporter Gao Yanyun)Following the cancellation of U.S. stock night trading yesterday, Futu and Tiger Brokers again cancelled U.S. stock night trading.

On August 6, Futu announced that it had received a notice from Blue Ocean, the upstream US stock night trading platform, that out of caution, today's (August 6) night trading will be temporarily cancelled, and trading in other normal time periods (pre-market, intraday, and after-market) will not be affected.

On the same day, Tiger Brokers issued a notice on the closure of the night trading session, stating that it had received a notice from its upstream supplier (Blue Ocean) that the U.S. stock night trading session would be closed on August 6 (Tuesday), and that trading would resume normally during the pre-market, intra-market and post-market periods.

Recently, the US stock market has been hit by a huge shock. Yesterday was "Black Monday", which was the main reason why the above two brokerages suspended US stock night trading twice. In addition, brokerage websites such as Charles Schwab, Fidelity, TD Ameritrade, Vanguard and E-Trade once crashed before the market opened. Overseas stock indexes such as Japanese and European stocks have also been hit by a huge shock. Some sell-side research said that US and Japanese stocks still have the risk of falling, and it is recommended to be cautious about overseas risk assets in the short term; once the siphon effect of the US and Japanese stock markets collapses, AH stocks are most likely to usher in a reversal of difficulties.

U.S. stock night trading suspended for two consecutive days

“Currently, when users open the app, we will send a pop-up window to remind them of the night trading closure.” said a Tiger Securities staff member.

The above two securities firms issued relevant notices yesterday.

On August 5, Futu Holdings issued a statement saying, "Dear customers, due to abnormalities in the upstream system of the U.S. stock night trading, trading during today's night trading session has been suspended. All friendly companies that support night trading are affected, and Futu is contacting the upstream for communication."

Tiger Brokers also notified investors that "due to abnormalities in the U.S. stock night trading exchange system, today's night trading session has been suspended. It is understood that all brokerages that support night trading are affected. We are contacting the exchange for communication. We are deeply sorry for the inconvenience caused to you."

In addition, it is reported that the U.S. stock market ushered in "Black Monday", causing panic among U.S. retail traders on Monday morning. Website monitoring agency DownDetector reported that brokerage websites such as Charles Schwab, Fidelity, TD Ameritrade, Vanguard and E-Trade began to crash before the market opened as a large number of users tried to log in to their accounts and sell stocks. Robinhood platform popped up a notification saying that 24-hour trading services were temporarily unavailable.

Overseas stock markets encounter "Black Monday"

This week, major global stock indices such as the U.S. and Japanese stocks fell into a major shock, plummeting on Monday and then rising sharply on Tuesday.

The three major U.S. stock indexes closed sharply lower on Monday, with the Dow Jones Industrial Average down 2.6%, the Nasdaq down 3.43%, and the S&P 500 down 3%, the largest single-day drop since September 2022. In terms of European stocks, Germany's DAX30 index fell 1.8%, Britain's FTSE 100 index fell 2.1%, France's CAC40 index fell 1.6%, and Europe's STOXX 50 index fell 1.5%.

Asia-Pacific stock markets also fell on the same day, with the Korean Composite Stock Price Index closing down 8.78%, and the Kosdaq Index falling more than 11%. The Nikkei 225 Index closed down 12.4%, wiping out all gains so far this year.

Affected by the weakening of external stock indices, A-shares retreated sharply on Monday afternoon. As of the close of August 5, the Shanghai Composite Index fell 1.54%, the Shenzhen Component Index fell 1.85%, the ChiNext Index fell 1.89%, and the Science and Technology Innovation 50 Index closed down 2.94%.

On Tuesday, August 6, U.S. stock index futures rebounded, with Nasdaq 100 futures rising by 2%, S&P 500 futures rising by 1.5%, and Dow futures rising by 1%. The Nikkei 225 index opened up about 2% on Tuesday, and the South Korean KOSPI index opened up 3.7%.

As of press time, the Japanese stock market closed in the morning, with the Topix index up 9.3% to 2434.21 points and the Nikkei 225 index up 9.4% to 34416.32 points. The MSCI Asia Pacific Index rose 4% to 172.77 points, the Indian NIFTY index rose 1% to 24296.60 points, the Indian SENSEX index rose more than 1% to 79553 points, and the Vietnamese VN index rose 1% to 1200.07 points.

As of closing, the Shanghai Composite Index rose 0.23%, the Shenzhen Component Index rose 0.82%, the ChiNext Index rose 1.25%, and the Science and Technology Innovation 50 Index closed up 1.36%.

Sellers: Be cautious about overseas risk assets in the short term

Cui Rong, chief analyst of overseas research at CITIC Securities, mentioned in a research report that in the United States, the accelerated weakening of economic data has led to an increase in recession expectations, and the market has entered a risk-off mode. The U.S. Treasury bond interest rate and the U.S. dollar index have fallen sharply. The U.S. stock market has experienced a reversal from interest rate cut trading to recession trading + carry trading. Investors are advised to pay attention to undervalued utilities and healthcare industries with strong defensive attributes and abundant free cash flow. In Japan, the Bank of Japan raised interest rates beyond expectations, carry trading positions were closed, and the yen appreciated significantly. Japanese stocks plummeted due to the double blow of "recession trading" and "safe-haven trading", leading the decline in global risk assets, and the financial and export sectors led the decline in Japanese stocks. In terms of global capital, bad news from technology leaders such as Intel has been reported frequently, and the "Buffett effect" has made the market worse. The resonance decline of the global AI chain is an important theme in "Black Monday".

Cui Rong said that the core contradiction at present lies in how to reverse the market's expectations of a US recession. Before the September FOMC meeting, US economic data is in a relative vacuum period. Data such as retail sales and consumer confidence index may not be able to significantly reverse market sentiment. US and Japanese stocks still have the risk of falling. It is recommended to remain cautious on overseas risky assets in the short term.

Huang Wentao, chief economist of CITIC Securities, said in a research report that the sharp adjustment of US technology stocks and the sluggish US economic data were the main triggers for the sharp drop in Asian stock markets. The US economic data fell more than expected, causing the market to question whether the Fed had missed the best time to cut interest rates, and expectations for the Fed to accelerate the pace of interest rate cuts rose sharply. The main reason for the appreciation of the yen is that the misaligned monetary policy operations of the United States and Japan, coupled with geopolitical risks, triggered the liquidation of carry trades. The Asian market is expected to gradually stabilize in the future, and it is too early to talk about a financial crisis. In the short term, the main risk factor still comes from geopolitical uncertainties.

Minsheng Securities Research Report believes that the monetary policies of the United States and non-US countries have begun to converge, and the carry trade that benefited from interest rate differentials and low volatility in the past has begun to reverse. The most intuitive manifestation is the sharp appreciation of the yen against the US dollar and the sharp adjustment of Japanese stocks. On the other hand, A-shares, with policy support and broad-based ETFs (mainly around the CSI 300, etc.), have performed better.

China Merchants Securities believes that from 2018 to now, the performance of the global equity market can be divided into five categories, with the US, Japan and India stock markets performing the best and AH stocks being the weakest, indicating that Chinese factor assets have never participated in this round of "chair grabbing" game. Once the siphon effect of the US and Japanese stock markets collapses, AH stocks are most likely to see a reversal of difficulties.