The performance of Hong Kong stocks last week was initially high, then low. The Securities Regulatory Commission and the People’s Bank of China's multiple policies influenced the market, providing a certain positive stimulus. Consequently, the HSI rebounded for the second week, returning to above 18,000 points.
However, last week's Hong Kong stock market was also the settlement week of the futures index. This factor led to a repeated performance of the market sector and individual stocks, making it difficult to form a continuous capital intervention and trend. The overall trading volume remained relatively mild, failing to stimulate market enthusiasm.
Future market predictions
Looking forward to this week, attention should be paid to the performance at the index level. If we fall below the five antennas, it will continue to put pressure on the market performance. If it stands at the level of 18,500-18,600 points, it will continue the correction trend, positively impacting the market.
U.S. stock market overview
Last week, the three major indexes of the U.S. stock market experienced a continuous decline in mid-August, followed by a rebound. The Nasdaq returned to above 14,000 in one fell swoop. The upward trend of the index was mainly supported by the second-quarter results of technology companies that exceeded expectations, such as Nvidia (NVDA, Financial).
Simultaneously, weak economic data in the United States eased the expectations of interest rate hikes in November, leading to short-term optimism. For instance, the gross domestic product growth to 2.1% in the second quarter was actually a downward revision data.
Market expectations
Looking forward to next week, in the short term, when the U.S. economic data slows down but does not significantly deteriorate, and corporate profits have not declined, the market's expectations that the Federal Reserve may stop raising interest rates are expected to push up the market's optimism and clarity and continue to drive the index upward.
U.S. fixed income market
Signs of accelerated economic cooling may be one of the driving factors for the recovery in demand for safe-haven assets, and the U.S. Treasury market rebounded last week. Among them, the initial value of the U.S. manufacturing PMI in August was 47, which was lower than the expected and previous value of 49. New manufacturing orders and new export orders fell, and raw material inventories also fell.
The initial PMI of the service industry was 51, lower than the previous value of 52.3 and the expected value of 52.2. New orders for the service industry fell below the rise and fall line. In terms of employment data, ADP employment in the United States increased by 177,000 in August, significantly lower than the previous value of 371,000 and lower than the expected 195,000.
Market implications
These data reflect that since the third quarter, due to the impact of high interest rates, U.S. consumer confidence has declined, service consumer demand has contracted and the cooling of employment data has reduced market expectations for Fed tightening. In terms of term structure, the week's yield curve has flattened out in a bull market, and short-term debt yields have fallen sharply.
Author: Eddid Financial Group Research Team
Disclaimer
The content contained is provided for reference only and does not constitute a distribution, an offer to sell or a solicitation of an offer to buy any securities. This content has been prepared without regard to the individual investment objectives, financial position or special requirements. Past performance has no indication of future performance, and actual events may differ materially from that which is contained in the content.
The value of, and returns from, any investments contained in the report are uncertain and are not guaranteed and may fluctuate because of their dependence on the performance of underlying assets or other variable market factors. The content and information contained are prepared and interpreted based on publicly available information collected from reliable sources. EDDID has exerted every effort in its capacity to ensure, but not to guarantee, their accuracy, completeness, timeliness, or correctness.
You should not make any investment decision solely based on this content, EDDID shall not be liable for any loss, damage, or expense whatsoever, whether direct or consequential, incurred in relying on the information contained in this content. Any form of unauthorized distribution, reproduction, publication, release or quotation is prohibited without EDDID’s written permission or it is possible to violate relevant regulations. This content should not be copied or repost in Mainland China.
