Daily Investment Strategy
Hang Seng Index fell 27 points on Friday
The Hang Seng Index fell 27 points or 0.1% to 21,650 on Friday. HSTECH fell 74 points or 1.7% to 4,449 and HSCEI fell 27 points or 0.4% to 7,312. Daily market turnover was HK$92.5bn.
Stocks fall on Thursday on expectations the Fed will remain hawkish for longer
Stocks fell on Thursday as investors grew increasingly concerned that the Federal Reserve would keep raising interest rates despite signs of slowing inflation. The Dow Jones Industrial Average fell 252.40 points, or 0.76%, to 33,044.56, posting its third straight session of losses and giving up gains from the New Year's rally. The S&P 500 fell 0.76% to 3,898.85 and the Nasdaq Composite lost 0.96% to 10,852.27. Stocks extended losses after the U.S. Labor Department reported that initial jobless claims fell to the lowest level since September on Thursday, signaling to investors that the labor market remains strong. Federal Reserve Governor Lael Brainard said on Thursday that“even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2% on a sustained basis”. Among tech stocks, Netflix (NFLX) rose 7.3% in after-hours trading after the streaming giant reported quarterly results after the close. Netflix reported weaker-than-expected fourth-quarter results, but subscriber additions topped expectations. Netflix added 7.66 million subscribers, well above expectations for 4.6 million, and said it was "very optimistic" about its new advertising tier streaming model.
Initial jobless claims fall less than expected
The Labor Department said on Thursday that initial claims for unemployment benefits fell 15,000 to a seasonally adjusted 190,000 in the week ended January 14, less than the forecast of 214,000; continuing claims for the week ended January 7 increased by 17,000 to 1.647 million, compared with the expectations of 1.655 million. U.S. housing starts fell for a fourth straight month in December, meaning a disappointing year for the sector, with annual housing starts falling for the first time since 2009. Residential starts fell 1.4% to an annualized rate of 1.38 million units last month, the lowest in five months. Housing starts fell 3% in 2022 after surging the previous year. Meanwhile, applications to build, a sign of future housing activity, fell 1.6% to an annualized 1.33 million units in December, the lowest level since May 2020 and missing market expectations of 1.365 million units, but the decline slowed from the previous month.
Hong Kong Stock Connect had a net inflow of HK$1.12bn on Thursday, of which Meituan (3690) had the largest net inflow, reaching HK$0.61bn; followed by Koolearn (1797). Tracker Fund (2800) recorded the largest net outflow at HK$1.8bn, followed by HSCEI ETF (2828).
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