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following the decline in hong kong stocks, chinese concept stocks also fell overnight. the nasdaq china golden dragon index fell 2.37%, youdao fell about 13%, bilibili and gds fell more than 8%, and xpeng motors and nio fell. about 7%, iqiyi fell more than 6%, weibo, gaotu group, and baidu fell more than 5%, li auto, tal, and ctrip group fell more than 3%; in terms of gains, tiger securities rose about 14%, and futu holdings rose by more than 8%, wuxin technology rose by more than 5%, and beike rose by more than 4%.

data source: wind

data source: wind

etfs tracking chinese assets also experienced a correction, with the ishares msci china etf falling 2.64%, reflecting investors' cautious sentiment towards the market. at the same time, the 3x long ftse china etf-direxion (yinn) fell 7.6%, further highlighting the volatility and risks of leveraged products.

data source: wind

data source: wind

chen guo of citic construction investment believes that this market is a rare market that combines the three factors of upward revision of profit expectations, falling risk-free interest rates and rising risk appetite, so it is not a simple oversold rebound, but a reversal. in fact, the increase in the hong kong stock index can be considered to have established a bull market in a general sense. the a-share market under similar background and logic can be considered to be a bull market. the 2024 bear-to-bull transition of china's stock market as seen in the agency's annual report is being verified. .

zhang yidong, global chief strategist of industrial securities, said that in the short term, the historical mission of a short-squeeze rebound has been completed, and perhaps by mid-october, the market will enter a new stage of sustainable rise and shock. zhang yidong emphasized that this is actually a good thing.because it is definitely abnormal for a person to go without eating or sleeping for several days, being excited and running wildly, and the same is true for the stock market.

//u.s. nonfarm employment report//

at 20:30 on october 4 (beijing time), the united states will release the september non-farm employment report. this report will provide important guidance for the federal reserve's short-term policy.

u.s. stocks fell on thursday, underscoring the jitters among some investors ahead of september's non-farm payrolls report. however, jeremiah buckley, equity portfolio manager at janus henderson, said that although economic data such as the upcoming employment report is still the focus of the stock market in the near future, market fundamentals are still strong enough to withstand any weakness caused by the data.

september's u.s. job market data is likely to be very similar to august - hiring activity is showing a gradual slowdown and wages are rising slightly. this coincides with what many policymakers want to see: a cooling of the labor market while avoiding a significant recession.

the market generally expects non-farm employment to increase by 150,000 in september, a slight increase from 142,000 last month, while the unemployment rate is likely to remain stable at around 4.2%. the data reflect a continued slowdown in job growth, which remains at moderate levels.

data source: u.s. department of labor

the performance of wages is also of high concern. markets forecast monthly wage growth of 0.3% in september and an annualized growth rate of 3.8%, consistent with august's figures. while this suggests wages are still rising, the stability of increases compared with previous months may also suggest that labor market tightness is gradually easing.

katie nixon, chief investment officer at northern trust wealth management, noted: “the job market is slowing down and tensions are easing. the balance of power has shifted from employees to employers, which is certainly going to happen. alleviating pressure on wages, which have been a key component of inflation."

however, although the market has made relatively cautious forecasts for the september employment report, it is not without variables. economists cautioned that there is still the possibility of a sharp rise or fall in september's employment numbers. in addition, employment data released by the u.s. department of labor often changes significantly in subsequent monthly revisions. in fact, during the 12 months ending in march 2024, revised data from the labor department showed that hiring was overcounted by more than 800,000, highlighting the uncertainty of the employment data itself.

david kelly, chief global strategist at jpmorgan asset management, said: "while we expect 150,000 new jobs, i wouldn't be comfortable if there were 50,000 or 250,000 new jobs. accident."this shows that volatility still exists during the labor market adjustment process, and any number that exceeds or falls below expectations may have an important impact on financial markets and the fed's decision-making.

in the non-farm employment data released on october 4, it is also necessary to consider recent major events that have affected economic activity. the first is the port strike on the west coast of the united states, especially important ports on the east coast. this strike may have affected logistics and supply chains, and in turn affected employment needs in related industries. secondly, there is the impact of hurricane helen, which hit florida on the evening of september 26, causing serious damage to some areas and may have a short-term inhibitory effect on employment.

in the week of september 28, the number of people applying for unemployment benefits for the first time in the united states was 225,000, higher than the previously revised number of 219,000. although these data show that the job market is gradually cooling, it does not yet show extreme weakness. initial jobless claims are back to pre-pandemic levels, showing relatively stable employment conditions as the economy recovers, while continuing claims have also risen over the past year but remain below levels that typically accompany recessions .

overall, september's employment data may be particularly important amid uncertainties from all sides. markets will be watching closely to see whether these data point to a further slowdown in the labor market to inform the direction of fed policy.

//the impact of employment data on fed policy//

the performance of non-farm payrolls data not only affects market sentiment, but is also directly related to the direction of the federal reserve's monetary policy. as u.s. inflation has gradually declined over the past year, there is widespread speculation on whether the federal reserve will continue to take further interest rate cuts before the end of the year. against this background, september’s employment data is seen as an important basis for policymakers to adjust direction.

the federal reserve has already cut interest rates by 50 basis points at its september meeting, and has made it clear that it plans to cut interest rates by another 50 basis points by the end of 2024, and by a full percentage point in 2025. however, market expectations are more aggressive than the fed's official stance, and some market participants expect that if the data supports it, the fed may take more measures in the short term to support economic growth and further ease financial market pressures.

“strong data won’t really change their stance,” jpmorgan’s david kelly noted.but the weak data could tempt them to cut another 50 basis points at the next meeting. "this reflects that although the fed wants to maintain a certain degree of gradualism and forward guidance in the interest rate cutting cycle, the performance of employment data will undoubtedly have a profound impact on the pace of policy. especially when the labor market shows some degree of weakness, policy policymakers tend to avoid an excessive slowdown in the economy by cutting interest rates further.

katie nixon believes that the balance of the labor market is gradually tilting from employees to employers, and this shift will undoubtedly reduce upward pressure on wages. and the slowdown in wage growth is crucial to controlling inflation. the pace of wage growth is an important component of inflation, and the current slowdown suggests that inflationary pressures have been eased to a certain extent, providing room for the federal reserve to adopt further easing policies.

still, some analysts believe the fed still faces a dilemma when formulating policy. on the one hand, inflation is still higher than its 2% target. although it has declined, it has not yet reached the fed's ideal control range; on the other hand, economic growth is under pressure, especially as consumer spending and business investment slow down. situation. if the job market slows down more than expected, and there could even be significant job losses, the fed will have to cut interest rates more aggressively to maintain economic momentum.

in addition, october's port strike and hurricane helene may also have a short-term negative impact on the data. if the september jobs report falls short of expectations, it will cast a pall on the u.s. employment outlook and may prompt market expectations for further easing by the federal reserve. in particular, the impact of the dock workers' strike may lead to a reduction in employment in logistics, supply chain and related industries. this short-term fluctuation makes september data more difficult to interpret and may also increase uncertainty in the federal reserve's policy formulation.

it is worth noting that all indicators of the u.s. labor market have been trending downward in the past few months, but they are far from a sharp decline. survey data from the manufacturing and service industries show that although hiring demand has slowed, the overall job market remains relatively stable. federal reserve chairman jerome powell described the labor market as "solid but softening" earlier this week. this judgment also indirectly indicates that when the fed evaluates the economic performance, it is seeing a transition from an overheated to a moderate labor market.

in the market, investors generally hope to see the federal reserve gradually ease the downward pressure on the u.s. economy through policy easing. the release of non-farm payrolls data will provide further guidance to the market and determine whether the fed can repeat its interest rate cut in september at subsequent meetings, or even advance the easing cycle at a faster pace.