Daily Investment Strategy
HSI fell 478 points on Wednesday
The Hang Seng Index fell 478 points or 2.7% to 17,331 on Tuesday. HSTECH fell 103 points or 2.6% to 3,817 and HSCEI fell 199 points or 3.2% to 5,949. Daily market turnover was HK$86.1bn.
Dow loses more than 400 points as interest rates spike
The Dow Jones Industrial Average fell on Tuesday and turned negative for the year as data showed unexpected strength in the labor market, raising further concerns about the Federal Reserve raising interest rates and pushing U.S. Treasury yields to multi-year highs. The Dow Jones Industrial Average fell 430.97 points, or 1.29%, to close at 33,002.38 points. The S&P 500 fell 1.37%, hitting its lowest level since June, closing at 4,229.45 points. The Nasdaq index, which is dominated by technology stocks, fell 1.87% to close at 13059.47 points. Affected by rising interest rates, growth stocks suffered the largest decline. The 10-year U.S. Treasury bond yield hit 4.8%, the highest level in 16 years. Treasury yields have surged in the past month as the Federal Reserve signaled it would keep interest rates higher for longer. The 30-year U.S. Treasury bond yield hit 4.925%, the highest level since 2007. The average interest rate on a 30-year fixed mortgage is nearly 8%. Technology stocks Microsoft Corp. and Meta Platforms led the decline. Energy stocks fell less than 1% as oil prices rebounded from weakness a day earlier, limiting losses ahead of an OPEC+ meeting scheduled for Wednesday.
Labor demand unexpectedly rises in August
Stocks move inversely with U.S. Treasury yields, and as interest rates surge, stocks move lower. The latest catalyst for rising interest rates was the U.S. Department of Labor's latest Job Openings and Labor Turnover Survey (JOLT) report, which measures labor demand, showing that job openings unexpectedly increased by about 9.6 million in August, higher than the expectations of 8.8 million. The strong labor market has raised further concerns about the Federal Reserve raising interest rates.
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