Daily Investment Strategy
Hang Seng Index rose 53 points on Monday
The Hang Seng Index closed at 17,422 points for the day, rose 53 points or 0.3%. The Hang Seng Technology Index reported at 3,497 points, rose 17 points or 0.5%. The HSCEI Index rose 18 points, or 0.3%, to 6,090 points. The market turnover was HK$47.9billion.
Dow hits new high ahead of Fed meeting
The S&P 500 edged higher on Monday as investors awaited a Federal Reserve meeting during which central bank officials are expected to cut interest rates for the first time since 2020. Meanwhile, the Dow rose to a new all-time high. The S&P 500 rose 0.13% to close at 5,633.09 points. The Dow Jones index rose 228.30 points to close at 41,622.08 points, an increase of 0.55%, setting a new closing high. At the same time, the Nasdaq index, which is dominated by technology stocks, fell 0.52% to close at 17592.13 points. Apple shares fell 2.8%, with analysts including Bank of America and JPMorgan noting that the timing of shipments could indicate demand for iPhone 16 Pro models will be lower than last year. Pfizer shares rose 2.7% after the company said its experimental drug showed positive results in mid-stage trials. The drug can treat problems that cause loss of appetite and weight loss in cancer patients. Boeing shares fell 0.7% on Monday after falling more than 3% on Friday as a strike by more than 30,000 workers entered its fourth day and the company and union negotiators will resume talks on labor contracts on Tuesday. Intel shares rose 6.4% on reports that the chipmaker has officially received up to $3.5 billion in federal grants to produce semiconductors for the U.S. Department of Defense. Alcoa shares rose 6.1% after the company said it would sell a 25.1% stake in its joint venture with Saudi Arabia's Ma'aden for $1.1 billion.
As the Fed meeting approaches, markets are divided on interest rate cuts
The FOMC meeting is widely expected to begin cutting interest rates, although traders are largely divided on the extent of the possible cuts. CME Fedwatch shows that the market expects a 50% chance of a 50-bp rate cut and a 50% chance of a 25-bp rate cut. Wednesday's move could set the tone for the Federal Reserve to begin its plan to ease monetary policy as it grapples with some concerns about a cooling economy and job market. However, recent economic data shows that inflation is still somewhat sticky.
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