Daily Investment Strategy
Hang Seng Index rose 78 points on Thursday
The Hang Seng Index rose 78 points or 0.4% to 21,514 on Thursday. HSTECH fell 60 points or 1.3% to 4,487 and HSCEI rose 1 points or 0.01% to 7,311. Daily market turnover was HK$159.58bn.
U.S. stocks rise as CPI report shows cooling inflation
U.S. stocks ended higher on Thursday after U.S. consumer prices for December showed that inflation cooled in the month, raising hopes that the Federal Reserve may slow down the pace of rate hikes again. The Dow Jones Industrial Average rose 216.96 points, or 0.64%, to end at 34,189.97. The S&P 500 gained 0.34% to close at 3,983.17. The Nasdaq Composite closed at 11,001.10, up 0.64%, marking its fifth straight day of gains. It's the first time the tech-heavy Nasdaq has seen such a prolonged rally since last July. Some 92% of traders expect the Fed to raise interest rates by 0.25% in February, according to the CME Fedwatch Tool. Fed officials including Philadelphia Fed President Patrick Harker backed a 0.25% rate hike next month, while St. Louis Fed President James Bullard said he preferred the Fed to raise rates "as soon as possible" and keep rates at 5% above. U.S. Treasury yields came under pressure as bets mounted on an earlier pause in rate hikes by the Federal Reserve, with the yield on the 10-year U.S. Treasury dipping below 3.5%. For stocks making the biggest move, American Airlines (AAL) rallied more than 8%, as the airline raised its forecast for fourth-quarter revenue and profit, citing higher airfares and reflecting pent-up travel demand. Bed Bath & Beyond (BBBY) closed up 50% on Thursday, as meme stocks remained in the spotlight for investors. Tesla shares fell after a report indicated that the plans for a major expansion of its Shanghai Gigafactory had been delayed. Banking stocks are set to dominate investor attention on the earnings front on Friday. Bank of America (BAC), Citigroup (C), JPMorgan (JPM), and Wells Fargo (WFC) are due to report quarterly results before the opening bell.
U.S. December CPI down 0.1% from November
The U.S. Department of Labor announced that the year-on-year increase in the U.S. consumer price index (CPI) slowed from 7.1% in November to 6.5% in December last year, the lowest growth rate since October 2021, in line with expectations, and the sixth consecutive month of growth while the monthly change changed from an increase of 0.1% in November to a decrease of 0.1%, which was also in line with expectations, mainly due to lower energy costs. At the same time, the year-on-year increase in the core CPI excluding food and energy slowed to 5.7% from 6% in November, and the month-on-month increase accelerated from 0.2% to 0.3%, both in line with expectations.
Hong Kong Stock Connect had a net outflow of HK$2.42bn on Thursday, of which BYD (1211) had the largest net inflow, reaching HK$0.56bn; followed by China Mobile (941). Tencent (700) recorded the largest net outflow at HK$2.34bn, followed by Kuaishou (1024).
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