Daily Investment Strategy
Hang Seng Index fell 235 points on Tuesday
HSI fell 235 pts or 1.4% to 17,002. HSTI fell 52 pts or 1.5% to 3,414. HSCEI fell 93 pts or 1.5% to 5,986. Market turnover reached $89.9 billion.
The S&P 500 and Nasdaq closed lower on Tuesday as investors sold off tech stocks ahead of big earnings releases
The S&P 500 fell on Tuesday, dragged down by losses in large technology stocks as investors awaited quarterly reports from those companies. Traders are also looking to Washington as the Federal Reserve begins its latest policy meeting. The broader market index fell 0.5% to close at 5,436.44 points, and the Nasdaq index fell 1.28% to close at 17,147.42 points. The Dow Jones Industrial Average rose 203.40 points, or 0.5%, to 40743.33. Nvidia shares fell 7%, and Microsoft shares fell about 0.9%. Tech giants Amazon, Netflix and Meta Platform also experienced declines. This week is an important earnings week for big tech companies. Microsoft is scheduled to report earnings after the bell on Tuesday. Meta, Amazon and Apple are gearing up later this week. Earnings season has been solid so far. According to FactSet data, about 80% of the 240 S&P 500 companies that have released financial reports have exceeded expectations. Shares of JetBlue Airways soared 12% after the budget airline unexpectedly reported a second-quarter profit and announced plans to further cut costs. PayPal shares rose more than 8% as the payments giant raised its full-year adjusted profit forecast for the second time, betting on the resilience of consumer spending. Merck shares fell more than 9% after the company lowered its full-year earnings forecast, mainly due to a one-time charge for the acquisition of eye drug developer EyeBio. Shares of pharmaceutical giant Pfizer rose nearly 1% after the company reported better-than-expected sales of its COVID vaccine and antiviral drugs and raised its annual profit forecast. According to a report from CNBC, Delta Air Lines hired a lawyer to ask the cybersecurity company CrowdStrike to compensate for losses. Subsequently, CrowdStrike's stock price fell 9.7%. Gold futures rose 1% as investors focused on the safe-haven metal after Israel said it had launched a targeted attack on Beirut, raising concerns about an Israeli-Lebanese war.
Markets await the outcome of the Fed meeting
The Fed’s two-day policy meeting begins on Tuesday, with investors hoping that Fed Chairman Powell will signal the timing and number of rate cuts in the coming months. Traders see a 100% chance of a rate cut in September, according to data from the CME FedWatch Tool. Meanwhile, the Bureau of Labor Statistics (BLS) reported in JOLTS on Tuesday that job openings fell to 8.18 million in June from 8.23 million in May, but that was still higher than economists' estimates of 8.03 million.
Hong Kong Stock Connect had a net inflow of HK0.34bn on Tuesday of which CNOOC (883) had the largest net inflow, reaching HK$0.3bn; followed by Sinopec (386). Tracker Fund (2800) recorded the largest net outflow at HK$2.24bn, followed by Shenhua (1088).
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