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On May 6th, it was reported that on April 29th, 2026, during the 9th Digital China Summit, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) successfully held a sub-forum in Fuzhou themed "Digital Empowerment of Central Enterprises, Innovation Leading the Future" on enterprise digital transformation. Li Zhen, member of the SASAC Party Committee and Vice Chairman, attended the forum and delivered a speech. Li Zhen stated that the SASAC has thoroughly implemented the decisions and deployments of the CPC Central Committee and the State Council, adhering to policy-driven, organizational-promoted, demonstration-led, and collaborative approaches to deeply advance the digital transformation of central enterprises, achieving positive progress in promoting the digitalization of central enterprise industries and the digitalization of industries. In the future, the SASAC will organize a new round of special actions for digital and intelligent transformation, guide central enterprises in the tiered cultivation of smart factories, strengthen independent innovation in digital technologies, deepen the integration of the digital economy and the real economy, promote the transformation and upgrading of traditional industries, and accelerate the development of new quality productivity.May 6th - According to the National Immigration Administration, during this years May Day holiday, border inspection authorities nationwide handled 11.279 million inbound and outbound passengers, averaging 2.256 million passengers per day, a 3.5% increase compared to last years May Day holiday. The peak day for inbound and outbound clearance occurred on May 2nd, reaching 2.529 million passengers. Among them, 1.255 million were foreigners, a 12.5% increase compared to the same period last year; of the foreigners entering the country, 436,000 were eligible for visa-free entry, a 14.7% increase compared to the same period last year. A total of 531,000 inbound and outbound means of transport (ships, trains, vehicles) were inspected, a 16.6% increase compared to the same period last year.May 6th - Since the end of March, the Philadelphia Semiconductor Index has surged 54%, marking its best 25-day performance since March 2000. Ohsung Kwon, chief equity strategist at Wells Fargo Securities, stated that companies designing, manufacturing, or selling computer chips for high-intensity AI tasks are currently the biggest beneficiaries of large-scale AI infrastructure construction. "Thats the real bottleneck," he said. Kwon indicated that AI trading has entered a healthier cycle, with investors focusing more on monetizing the technology rather than capital expenditure. Last weeks earnings reports from tech giants like Amazon and Google reflected this shift in focus, with traders closely watching whether the massive investments in AI are truly yielding returns. Despite the ongoing AI hype, Wells Fargos sentiment indicator issued a "sell" signal for the first time since November 2021—suggesting that investors should build protective measures for their portfolios after the "sugar rush" in financial markets.Hong Kong-listed AI application stocks showed mixed performance. Meitu (01357.HK) surged over 16%, Kingsoft Cloud (03896.HK) rose over 5%, and Zhixing Technology (01274.HK), Baidu (09888.HK), and Alibaba (09988.HK) all rose over 3%. Meanwhile, 51Vision (06651.HK) fell over 6%, Micro-Robotics (02252.HK) and MyFT (02556.HK) fell over 5.5%, and Xunze (03317.HK) fell over 4%.Hong Kong-listed mainland property stocks continued their upward trend during the session, with China Jinmao (00817.HK) and Yuexiu Property (00123.HK) both rising by more than 6%, Jianfa International Group (01908.HK) rising by more than 5.5%, and China Resources Land (01109.HK), China Overseas Land & Investment (00688.HK), Greentown China (03900.HK), Longfor Group (00960.HK), and many other stocks rising by more than 4%.

After A Fed Rise, The U.S. Banks Stress Index Might Deteriorate

Aria Thomas

Jun 17, 2022 11:09

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An indicator of credit risk in the U.S. banking sector may be exhibiting symptoms of strain as the Federal Reserve's aggressive rate rise path heightens economic pain forecasts.


According to Refinitiv data, the so-called FRA-OIS spread, which measures the difference between the U.S. three-month forward rate agreement and the overnight index swap rate, jumped to 29.50 basis points on Thursday, its widest level since May 23. The value was -11.66 basis points earlier in the week.


Widely regarded as a barometer for banking sector risk, a wider spread indicates that interbank lending risk has increased.


The recent increase in the margin between forward rate agreements and overnight index swap rates is worrisome, according to J.P. Morgan Asset Management global market analyst Jordan Jackson. "As the Fed becomes more hawkish, recession fears increase, hence boosting the underlying credit risk."


The Federal Reserve hiked interest rates by 75 basis points on Wednesday, its largest rise since 1994. Markets have been rocked by the prospect of more dramatic tightening, and fears of a future recession have intensified.


This month, the central bank also started letting bonds to expire off its more than $8 trillion balance sheet without replacing them, a procedure known as quantitative tightening that Jackson warned may possibly deplete the financial system's liquidity.


As the world's biggest holder of U.S. government debt lowers its market presence, this sentiment is shared by other investors who are concerned that market conditions may deteriorate.


"Now that quantitative tightening has formally begun, reserve draining has been rather steady over the last several months," Jackson said, adding that he expects the FRA-OIS disparity to become much wider.


Wall Street also perceives an increase in the likelihood of default by large banks.


On Thursday, credit default swap (CDS) spreads for JP Morgan, Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and Bank of America (NYSE:BAC) were nearing two-year highs.


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