Daily Investment Strategy

Hang Seng Index fell 2172 points on Tuesday

The Hang Seng Index closed at 20,926 points for the day, fell 2172 points or 9.4%. The Hang Seng Technology Index reported at 4,695 points, fell 690 points or 12.8%. The HSCEI Index fell 847 points, or 10.2%, to 7,483 points. The market turnover was HK$620.4billion.

S&P 500 rises nearly 1%

U.S. stocks rebounded on Tuesday after falling as oil prices eased and investors assessed tensions in the Middle East. The S&P 500 rose 0.97% to close at 5,751.13 points, and the Nasdaq rose 1.45% to close at 18,182.92 points. The Dow Jones Industrial Average rose 126.13 points to close at 42,0080.37 points, an increase of 0.3%. WTI crude oil futures fell 4.6% on Tuesday as traders focused on potential Israeli retaliation for Iranian missile attacks and U.S. efforts to prevent the regional conflict from expanding. The move weighed on energy stocks, with the S&P falling 2.6%. Marathon Petroleum and Valero Energy fell 7.7% and 5.3% respectively. Technology stocks were higher on Tuesday, with Nvidia and Broadcom gaining 4% and 3%, respectively. Shares of Meta Platform, Tesla and Microsoft were all up at least 1%, while Palo Alto Networks shares were up 5%. Nvidia led the gains in the technology sector as the market is optimistic about the demand for chips. Foxconn Chairman said that the demand for Foxconn servers using Blackwell chips is much better than expected. Alphabet shares edged higher a day after a U.S. judge ordered Google to reconfigure its Android operating system to allow rivals to develop their own app markets and payment options, marking a setback for the tech giant's defense against antitrust claims. DocuSign will join the S&P 500 MidCap 400 Index on Friday, replacing MDU Resources, and shares rose more than 6%. Soft drink giant PepsiCo's shares rose 1.9% after the company reported third-quarter earnings that exceeded expectations, but revenue fell short of expectations due to sluggish business performance in the North American market and international business disruptions. Honeywell shares rose more than 1% after the Wall Street Journal reported it plans to spin off its advanced materials business. Shares of online gaming company Roblox fell more than 2% after short seller Hindenburg Research accused the company of exaggerating key metrics such as active users on its platform and user engagement time.

Markets eagerly await hints about Fed rate cut

The FOMC minute will be released on Wednesday, while the September consumer price index will be released on Thursday. Fed speakers continued to weigh in on the outlook for interest rates. Boston Fed President Susan Collins said further interest rate cuts may be needed as inflation continues to fall. Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said the strength of the job market indicated continued strength in the economy. According to CME Fedwatch, traders currently expect an 86.7% chance that the Federal Reserve will cut interest rates by 25 basis points in November, and a 13.3% chance that the central bank will not cut interest rates.

Hong Kong Stock Connect had a net inflow of HK2.06bn on Tuesday of which Alibaba (9988) had the largest net inflow, reaching HK$3.62bn; followed by SMIC (981). Meituan (3690) recorded the largest net outflow at HK$3.29bn, followed by HKEX (388).