Report Industry Investment Rating - Not provided in the content Report Core Viewpoints - The central bank will resume open - market treasury bond trading operations, and the prices of precious metals, crude oil, and stock index futures show different trends affected by various factors such as geopolitics, economic data, and policies [1] - Precious metals have experienced a continuous decline after a rapid rise due to the weakening of driving factors, while the long - term trend of gold as a safe - haven asset remains [2] - Crude oil prices are under a downward trend despite geopolitical tensions, and the situation is still unclear [3] - Stock index futures are in a direction - selection stage, and the market style may shift towards value in the fourth quarter [4] Summary by Relevant Parts 1.当日主要新闻关注 International News - Mexican President Sinbaum said that US President Trump agreed to extend the deadline for the agreement on trade, security, and immigration issues between the two countries, and Trump will not impose additional tariffs [6] Domestic News - Chinese Foreign Minister Wang Yi talked with US Secretary of State Rubio, hoping that both sides would work together to prepare for high - level interactions and create conditions for bilateral relations. The Chinese Foreign Ministry also responded to multiple hot issues such as a possible meeting between the two heads of state [7] Industry News - In September, the profits of China's industrial enterprises above a designated size increased by 21.6% year - on - year, accelerating by 1.2 percentage points compared with August, with the profits of high - tech and equipment manufacturing industries growing rapidly [8] 2.外盘每日收益情况 - The US S&P 500 index decreased by 0.79%, the German DAX index decreased by 0.13%, the UK FTSE 100 index decreased by 0.70%, and the FTSE A50 futures bond decreased by 1.33% from October 24th to October 27th. The US dollar index decreased by 0.15%, and the 10 - year US Treasury bond futures decreased by 0.20%. ICE Brent crude oil decreased by 1.58%, London gold decreased by 0.25%, and London silver decreased by 0.44%. LME aluminum decreased by 0.30%, LME copper increased by 1.20%, LME zinc decreased by 0.10%, and LME nickel decreased by 0.07%. ICE No. 11 sugar decreased by 1.77%, ICE No. 2 cotton increased by 0.25%, CBOT soybeans decreased by 0.07%, CBOT soybean meal increased by 0.65%, CBOT soybean oil decreased by 1.12%, and CBOT wheat remained unchanged [10] 3.主要品种早盘评论 Financial - Stock index futures continued to rise after the Sino - US tariff negotiation released positive news. After the high - level shock in September, they are in a direction - selection stage. The domestic liquidity environment is expected to remain loose, and the market style may shift towards value in the fourth quarter [4][11] - Treasury bond futures rose slightly. The central bank carried out large - scale MLF operations, but the short - term Shibor increased. With the easing of risk - aversion sentiment and the market's expectation of the Fed's interest - rate cut, the market liquidity is expected to remain reasonable and abundant, which supports the price of treasury bond futures [12][13] Energy and Chemical - SC crude oil futures decreased by 0.75% at night. The US and the EU imposed sanctions on Russian oil companies, but the downward trend of crude oil prices is difficult to change [3][14] - Methanol futures decreased by 0.53% at night. The operating rate of coal - to - olefin plants decreased, and the coastal methanol inventory increased slightly. The market is volatile due to various uncertainties [15] - Rubber supply may face pressure as the tapping season progresses, and the demand support is limited. The short - term trend is expected to be strong due to the expected smooth progress of Sino - US trade negotiations [16] - Polyolefin futures declined slightly. The spot prices were stable. With the easing of the external environment and the rebound of crude oil prices, and the high demand from downstream industries, the market may fluctuate and rebound in the short term [17] - Glass futures were in a low - level consolidation, and soda ash futures rebounded slightly. Both are in the process of inventory digestion, and the market is cautious. Attention should be paid to consumption in autumn and policy changes [18] Metal - Precious metals continued to decline. Geopolitical risks have cooled down, and the driving factors have weakened. However, the long - term trend of gold as a safe - haven asset remains [2][19] - Copper prices decreased slightly at night. The concentrate supply is tight, and the smelting profit is at the break - even point, but the smelting output continues to grow. The Indonesian mine accident may lead to a supply - demand gap and support copper prices in the long term [20] - Zinc prices increased slightly at night. The zinc concentrate processing fee has increased, and the smelting output is expected to rise. The domestic zinc price may be weaker than the foreign one, and the market may fluctuate within a range [21] Black - Coking coal and coke futures fluctuated narrowly at night. The output of five major steel products increased slightly, and the inventory decreased. The high iron - water output provides support for coking coal and coke, but the possible reduction of blast - furnace production due to shrinking profits is a risk. The short - term trend is expected to be a high - level shock [22] Agricultural Products - Protein meal futures fluctuated strongly at night. The US soybean export inspection volume was higher than expected, and the Brazilian soybean planting progress was good. The domestic market is expected to fluctuate in the short term [23] - Oil futures were weak at night. The palm oil production in Malaysia is expected to increase in October, and the supply - side expectation is loose, which suppresses the short - term market [24] - International sugar prices are in a downward trend due to the increase in Brazilian sugar supply. The domestic sugar price may be supported by the cost of the new crushing season, and there is a possibility of an upward trend in the short term [25] - Cotton futures continued to be strong in a volatile manner. The US cotton market is in a short - term shock due to the government shutdown. The domestic new cotton purchase is in the peak season, and the price supports the market in the short term [26] Shipping Index - The container shipping index for European routes (EC) declined. The SCFIS European route index rebounded for the second consecutive period. The market is still gambling on the year - end peak season, and the shipping companies are relatively positive in price - holding at the end of the year, but the market operation is not smooth [27][28]

Core Viewpoint - In September, industrial profits showed a weak performance compared to previous years when adjusted for low base effects, with current cost rates remaining at historically high levels [2][8]. Overall Performance - In September, industrial profits continued to rise due to short-term factors such as expenses, with a year-on-year increase of 2.6 percentage points to 22.5% under low base conditions. However, on a two-year compound basis, profit growth fell by 5.3 percentage points to -5.9%, and the month-on-month profit increase was only 1.1%, significantly lower than the same period last year (11.3%) [2][8]. - The profit margin increased year-on-year, primarily driven by short-term indicators like expense ratios, which rose by 9.5 percentage points to 11.6% [2][8]. Revenue Analysis - In September, industrial revenue improved, with nominal revenue rising due to marginal improvements in the Producer Price Index (PPI). The actual revenue growth rate, adjusted for price changes, increased by 0.2 percentage points to 5.4%, contributing an additional 0.3 percentage points to the year-on-year profit growth [2][16]. - Revenue growth varied across industrial chains, with the consumer chain showing a notable increase of 2.2 percentage points to 8.1%, while the petrochemical and metallurgy chains also saw improvements [2][16]. Cost Structure - Industrial enterprises faced increasing cost pressures in September, with cost rates for the metallurgy and consumer chains at historically high levels, indicating that the effects of anti-involution policies are yet to be realized. The overall cost rate for industrial enterprises was 85.4%, remaining relatively high compared to previous years [3][22]. - The cost contribution to year-on-year profit growth decreased by 0.3 percentage points to -3.6% [3][22]. Industry Insights - Industries with significant profit improvements were primarily influenced by revenue and expenses, despite ongoing cost pressures. Notable profit recoveries were observed in the computer communication and automotive sectors, contributing 3.5 and 2.8 percentage points to overall profit, respectively [3][33]. - Other sectors such as general equipment, non-metallic products, and rubber and plastics also contributed positively to profit growth, while the beverage industry saw a significant decline in profit growth [3][33]. Future Outlook - Industrial enterprises are expected to continue facing substantial cost pressures, with the effectiveness of anti-involution policies still to be seen. The current profit pressures are largely attributed to rigid cost increases driven by downstream investment [4][48]. - Future policies aimed at stabilizing growth in sectors like construction materials and steel are anticipated to gradually alleviate cost pressures, alongside a recovery in domestic demand [4][48].

Core Viewpoint - The People's Bank of China (PBOC) has announced the resumption of government bond trading operations in the open market, indicating a shift in monetary policy to ensure smooth transmission and stability in the financial market [1] Group 1: Monetary Policy and Market Operations - The PBOC had previously suspended government bond trading due to imbalances in market supply and demand, but is now resuming operations as the bond market is performing well [1] - The PBOC will conduct flexible operations based on the needs for base currency issuance, considering market conditions and yield curve changes [1] Group 2: Precious Metals and Geopolitical Risks - Precious metals, particularly gold and silver, have seen a decline as geopolitical risks, such as the Russia-Ukraine conflict, have eased [2][19] - Central banks globally continue to increase gold reserves, reflecting a growing recognition of gold as a safe-haven asset amid rising distrust in the financial system [2][19] Group 3: Oil Market Dynamics - The oil market is influenced by new sanctions imposed by the U.S. on major Russian oil companies, which may impact supply but the overall trend remains downward [3][14] - The geopolitical situation has led to fluctuations in oil prices, but the market is currently facing uncertainty regarding the future direction of prices [3][14] Group 4: Stock Market Trends - U.S. stock indices have continued to rise, driven by positive developments in U.S.-China trade negotiations, with significant trading volumes reported [4][12] - The domestic liquidity environment in China is expected to remain loose, potentially leading to increased investment in equity assets [4][12] Group 5: Economic Indicators - China's industrial profits have shown a year-on-year increase of 21.6% in September, indicating robust growth in high-tech and equipment manufacturing sectors [7] - The PBOC's monetary policy stance remains supportive, with expectations of continued liquidity in the market [13]

Core Viewpoint - In September, industrial profits showed a weak performance compared to previous years when adjusted for low base effects, with current cost rates remaining at historically high levels [2][8]. Overall Performance - In September, industrial profits continued to rise due to short-term factors like expenses, with a year-on-year increase of 2.6 percentage points to 22.5%. However, on a two-year compound basis, profit growth fell by 5.3 percentage points to -5.9%. Month-on-month, profits increased by only 1.1%, significantly lower than the same period last year (11.3%) [2][8]. - The profit margin continued to rise, primarily driven by short-term indicators, with a marginal increase of 9.5 percentage points to 11.6%. Other income items that previously boosted profits saw a decline in their contribution [2][8]. Revenue Analysis - Industrial revenue improved in September, with nominal revenue rising due to marginal improvements in the Producer Price Index (PPI). The actual revenue growth rate, adjusted for price changes, increased by 0.2 percentage points to 5.4%, contributing an additional 0.3 percentage points to profit growth [2][16]. - By industry chain, the consumer chain saw a significant increase in actual revenue growth, rising by 2.2 percentage points to 8.1%. The petrochemical and metallurgy chains also showed improvements, with year-on-year increases of 1.3 and 0.1 percentage points to 3% and 4.8%, respectively [2][16]. Cost Structure - Industrial enterprises faced increasing cost pressures in September, with cost rates in the metallurgy and consumer chains at historically high levels. The overall cost rate was 85.4%, reflecting a relative high compared to recent years [3][22]. - The cost contribution to year-on-year profit growth decreased by 0.3 percentage points to -3.6%. The cost rates for the metallurgy and consumer manufacturing chains were 86.5% and 83.9%, respectively, both higher than the previous year [3][22]. Industry Insights - Industries with significant profit improvements were primarily influenced by revenue and expenses, although cost pressures remained substantial. Notably, the computer communication and automotive sectors saw profit increases of 3.5 and 2.8 percentage points to 4.5% and 2.2%, respectively [3][33]. - Other contributing sectors included general equipment, non-metallic products, and rubber and plastics, which collectively boosted overall profits. However, the automotive and computer communication sectors experienced year-on-year increases in operating costs of 4% and 3.8%, respectively [3][33]. Future Outlook - Industrial enterprises are expected to continue facing significant cost pressures, with the effectiveness of "anti-involution" policies still to be seen. The current profit pressures are largely due to rigid cost increases from downstream investments [4][48]. - Looking ahead, policies aimed at stabilizing growth in sectors like construction materials and steel have been introduced, which, along with accelerated debt repayments, may gradually alleviate cost pressures. However, attention should be paid to the potential negative impact of upstream price surges on corporate profitability [4][48]. Regular Tracking - Industrial profits have been on the rise, with both volume and price improvements noted. In September, industrial profits increased by 1.2 percentage points to 21.6%, driven by a 1.3 percentage point rise in industrial added value to 6.5% [5][51]. - Revenue growth for industrial enterprises also showed signs of recovery, particularly in the cultural, educational, and entertainment sectors, as well as in petroleum and coal processing, with significant month-on-month increases [5][65].

Core Viewpoints - In September, industrial enterprises' profits continued to rise, primarily driven by low base effects and short-term factors, but when adjusted for these factors, the profit performance was weaker than in previous years [2][8] - The cumulative revenue of industrial enterprises in September showed a year-on-year increase of 2.4%, while profits increased by 3.2% [7][90] Revenue - In September, nominal revenue for industrial enterprises improved, with all three major industrial chains showing revenue recovery. The Producer Price Index (PPI) marginally improved, leading to a nominal revenue increase [16][91] - The actual revenue growth rate, adjusted for price changes, rose by 0.2 percentage points to 5.4%, contributing to a 0.3 percentage point increase in profit year-on-year [16][91] Costs - Industrial enterprises faced increasing cost pressures in September, with cost rates in the metallurgical and consumer chains remaining at historically high levels. The overall cost rate was 85.4%, indicating significant cost pressure on profits [22][91] - The cost rate for the metallurgical chain was 86.5%, and for the consumer manufacturing chain, it was 83.9%, both higher than the previous year [22][91] Industry Performance - Industries such as computer communication and automotive saw significant profit recovery, contributing 3.5 and 2.8 percentage points to overall profit growth, respectively [33][92] - Despite revenue improvements in these sectors, cost pressures remained high, with operating costs for the automotive and computer communication sectors rising by 4% and 3.8%, respectively [33][92] Outlook - The cost pressures for industrial enterprises are expected to remain high, with ongoing monitoring of the "anti-involution" policy's impact on costs. The current profit pressure is largely due to rigid cost increases from downstream investments [4][48] - Future policies aimed at stabilizing growth in sectors like construction materials and steel are anticipated to gradually alleviate cost pressures, although attention should be paid to potential negative impacts from upstream price surges [4][48]

Group 1: Industrial Sector - Industrial product futures prices increased, with the South China industrial product index rising by 2.8%[2] - Steel and building materials production and apparent demand improved, with cement clinker capacity utilization rising[2] - Polyester and weaving industry operating rates showed marginal recovery, while automotive tire production rates rebounded[2] Group 2: Real Estate - New home sales in 30 major cities decreased by 21.0% year-on-year, a decline of 1.1 percentage points from the previous week[2] - The second-hand housing listing price index fell by 0.92% in the last four weeks as of October 13[2] - New home sales in October showed a year-on-year decline of 23.4%, a drop from the previous month[2] Group 3: Domestic Demand - Retail sales of automobiles decreased by 6% year-on-year from October 1-19, with a preliminary estimate of a 2.6% decline for the month[2] - Major home appliance retail sales fell by 17.0% year-on-year, a drop of 13.4 percentage points from the previous value[2] - Domestic flight operations increased by 2.3% year-on-year, while the Baidu migration index rose by 11.5%[2] Group 4: External Demand - Port cargo throughput increased by 0.9% year-on-year as of October 19, while container throughput rose by 4.3%[2] - The China export container freight index increased by 2.0% week-on-week, with Shanghai and Ningbo export container prices continuing to rise[2] - South Korea's export value increased by 9.7% year-on-year for the first 20 working days of October, although the growth rate declined from September[2] Group 5: Price Trends - Futures prices for coking coal rose by 5.9%, with spot prices in Shanxi increasing by 5.0%[2] - Rebar futures closed up by 0.3%, with spot prices rising by 0.1%[2] - The overall industrial product price performance showed a positive trend, with various indices reflecting increases in key materials[2]

Economic Growth - The GDP growth for the first three quarters of 2023 is 5.2% year-on-year, with a 4.8% growth in the third quarter, indicating resilience in economic growth [1] - Industrial production showed a strong performance, with the industrial added value increasing by 6.5% year-on-year in September, up 1.3% from the previous month [1] Demand Side - Fixed asset investment has decreased by 0.5% year-on-year, primarily due to a decline in real estate and infrastructure investments, while manufacturing investment grew by 4% [2] - Retail sales of consumer goods increased by 3% year-on-year in September, but this marks a 0.4 percentage point decline from the previous month, continuing a four-month downward trend [2] - Service consumption remains a bright spot, with total service consumption growth rising to 5.2%, contributing 2.7 percentage points to GDP growth in the third quarter [2] Structural Issues - There are evident signs of weakness in housing prices, with all 70 major cities reporting declines in second-hand housing prices in September, and real estate investment down by 13.9% year-on-year [3] - The GDP deflator index is at -1.07%, remaining negative for over ten consecutive quarters, indicating ongoing structural issues that require further policy support [3] - To ensure a strong start for economic growth in the following year, it is necessary to enhance growth-stabilizing policies [3]

Report Summary 1. Report Industry Investment Rating - Not mentioned in the provided content. 2. Core Viewpoints - **Stock Market**: A - shares and four stock index futures rose collectively this week, with small - and medium - cap stocks outperforming large - cap blue - chip stocks. After the Fourth Plenary Session of the 20th Central Committee, market sentiment was boosted, but trading activity declined. It is recommended to buy on dips [6]. - **Bond Market**: Treasury futures weakened this week. Although the fundamentals and capital situation may push the bond market to strengthen, uncertainties will continue to disrupt market sentiment. It is expected that Treasury futures will fluctuate widely in the short term, and interval operations are recommended [6]. - **Commodity Market**: Geopolitical conflicts drive up oil prices, and gold fluctuations decrease. The short - term commodity index is expected to fluctuate strongly, and it is recommended to mainly observe [6]. - **Foreign Exchange Market**: The US dollar may be under pressure in the medium term. The yen is under pressure, and short - term dollar strength may suppress the euro and yen. It is recommended to observe cautiously [6][10]. 3. Summary by Directory This Week's Summary and Next Week's Allocation Recommendations - **Stock**: The Shanghai and Shenzhen 300 rose 3.24%, and the Shanghai and Shenzhen 300 stock index futures rose 3.35%. A - shares and four stock index futures rose, with market sentiment boosted after the Fourth Plenary Session. It is recommended to buy on dips [6]. - **Bond**: The 10 - year Treasury bond yield rose 0.21%, and the main 10 - year Treasury futures fell 0.27%. Due to policy and market uncertainties, it is expected to fluctuate widely in the short term, and interval operations are recommended [6]. - **Commodity**: The Wind Commodity Index fell 4.93%, and the CSI Commodity Futures Price Index fell 0.29%. Geopolitical conflicts drive up oil prices, and gold fluctuations decrease. It is recommended to mainly observe [6]. - **Foreign Exchange**: The euro against the US dollar fell 0.42%. The US dollar may be under pressure in the medium term, and the yen is under pressure. It is recommended to observe cautiously [6]. Important News and Events - **China - US Relations**: The two sides are about to return to the negotiation table, and Trump plans to visit China next year. China advocates resolving issues through negotiation [14][16]. - **Domestic Policy**: The Fourth Plenary Session of the 20th Central Committee emphasized "sustained efforts in pro - growth policies" [6]. - **International Affairs**: The EU invited China to discuss rare earths, and European leaders supported the Russia - Ukraine cease - fire through negotiation. The Trump administration froze $11 billion in infrastructure funds [14][16]. This Week's Domestic and Foreign Economic Data - **China**: The Q3 GDP annual rate was 4.8%, the September social consumer goods retail sales increased 3% year - on - year, and the September industrial added value increased 6.5% year - on - year [11][17]. - **US**: The September existing home sales totaled 4.06 million annualized [17]. - **EU**: The preliminary October consumer confidence index was - 14.2 [17]. - **UK**: The September CPI monthly rate was 0, and the September retail price index monthly rate was - 0.4% [17]. - **Germany**: The September PPI monthly rate was - 0.1% [17]. Next Week's Important Economic Indicators and Economic Events - **October 27**: China's January - September industrial enterprise profit annual rate, US September durable goods orders monthly rate [81]. - **October 28**: Germany's November Gfk consumer confidence index, US August S&P/CS20 city house price index annual rate [81]. - **October 30**: US Fed interest rate decision, eurozone Q3 GDP annual rate, US Q3 real GDP annualized quarterly rate, etc. [81]. - **October 31**: Japan's September unemployment rate, China's October official manufacturing PMI, etc. [81].

Core Viewpoint - The third quarter economic data indicates that China's economy is maintaining resilience, with GDP growth of 5.2% year-on-year for the first three quarters and 4.8% for the third quarter, driven primarily by the production sector [2][3]. Group 1: Economic Growth - The industrial production maintained a rapid growth rate, with industrial added value increasing by 6.5% year-on-year in September, up by 1.3% from the previous month [2]. - Exports showed improvement, with a year-on-year growth of 3.8% in September, a significant recovery from the previous month's decline of 0.4% [2]. - The production sector is identified as the most important driver of economic growth this year, supported by policy measures and seasonal effects [2]. Group 2: Demand Side Analysis - Fixed asset investment has continued to decline, with a year-to-date decrease of 0.5%, primarily due to weakened real estate and infrastructure investments [3]. - Retail sales of consumer goods grew by 3% year-on-year in September, marking a 0.4 percentage point decline from the previous month, continuing a four-month downward trend [3]. - Service consumption remains a bright spot, with total service consumption growth rising by 0.1% to 5.2%, contributing 2.7 percentage points to GDP growth in the third quarter [3]. Group 3: Structural Issues and Policy Needs - There are evident signs of weakening in housing prices, with all 70 major cities reporting declines in second-hand housing prices in September [4]. - The GDP deflator index stands at -1.07%, remaining negative for over ten consecutive quarters, indicating ongoing structural issues [4]. - To support economic growth for the upcoming year, it is necessary to further implement stability policies, especially considering the high base from last year's growth [4].

1. Report Industry Investment Rating - The overall rating for commodities and stock index futures is neutral [5] 2. Core View of the Report - The report focuses on multiple factors including the domestic economic situation, Sino - US tariff frictions, the US government shutdown, and commodity market trends. It suggests a wait - and - see approach for commodities in the short - term, and points out potential opportunities and risks in different commodity sectors [1][2][3][4] 3. Summary by Related Catalogs Market Analysis - In China, the gap between strong expectations and weak reality has widened. In August, economic data showed signs of weakness with characteristics such as slow industrial growth, weak investment, and sluggish consumption. In September, exports were resilient, and the M2 - M1 gap reached a new low for the year. The government has proposed measures to stabilize growth, with new policy - based financial instruments totaling 500 billion yuan. China's Q3 GDP grew by 4.8% year - on - year, September's retail sales growth slowed to 3% compared to August, and industrial value - added growth accelerated to 6.5%. Housing prices in 70 cities declined in September, with second - and third - tier cities' second - hand housing prices falling by 0.7% and 0.6% respectively [1] - Sino - US tariff frictions have intensified. As the extension of Sino - US tariffs is about to expire on November 10, the US has taken multiple measures such as adding Chinese companies to the entity list and imposing tariffs on various products. China has responded with measures like export controls on rare - earth technology and charging special port fees on US ships. Both sides have agreed to hold a new round of economic and trade consultations [2] - As of October 22, the US government shutdown has entered its 22nd day, becoming the second - longest in history. Economic data releases have been delayed, and the market may have underestimated the severity of the shutdown. Japan's Prime Minister is preparing economic stimulus measures expected to exceed 13.9 trillion yen from last year [3] Commodity Market - For commodities, a wait - and - see approach is recommended in the short - term due to high volatility in previously bullish sectors. The black sector is still affected by downstream demand expectations, and the "anti - involution" situation should be noted. The non - ferrous sector has long - term supply constraints and is boosted by global easing expectations. The energy sector has a relatively loose supply in the medium - term, with OPEC+ planning to increase production by 137,000 barrels per day in November. The US API crude oil inventory decreased by 2.981 million barrels last week. In the chemical sector, the "anti - involution" space of products like methanol, caustic soda, and urea is worth attention. Agricultural products are driven by tariff and inflation expectations but need fundamental signals and are affected by Sino - US negotiations. For precious metals, short - term price fluctuations are risky, but there are long - term buying opportunities at low prices. On October 22, spot gold fell below $4,070 per ounce, with a decline of over $70 per ounce in 30 minutes [4] Strategy - The overall strategy for commodities and stock index futures is neutral [5] Important News - On October 21, Chinese Minister Wang Wentao had a video call with the EU Commissioner, discussing key economic and trade issues. China's rare - earth export control is a normal measure to improve the export control system [7] - The US government shutdown may last until November and exceed the 35 - day record of Trump's first term [7] - Japan's Prime Minister is preparing economic stimulus measures centered around three pillars: anti - inflation measures, investment in growth industries, and national security [7] - US API crude oil inventory decreased last week, along with changes in other oil product inventories [7] - Russian President Putin will not attend the G20 summit in South Africa in person [7] - Spot gold prices dropped sharply on October 22 [7]