Daily Investment Strategy
Hang Seng Index rose 647 points on Thursday
The Hang Seng Index rose 647 points or 3.2% to 20,793 on Thursday. HSTECH rose 193 points or 4.6% to 4,427 and HSCEI rose 231 points or 3.4% to 7,065. Daily market turnover was HK$149.6bn.
U.S. stocks end higher, snapping 2-day losing streak
The Dow ended higher on Wednesday as investors digested Federal Reserve December meeting minutes that suggested higher interest rates would remain high for longer and data showing a tight job market raised concerns about rising wage-driven inflation. The Dow Jones Industrial Average rose 133 points, or 0.40%, to 33,269.77. The S&P 500 rose 0.75% to 3852.97; the Nasdaq Composite rose 0.69% to close at 10458.76. Travel and leisure stocks were in focus as cruise stocks rallied after Carnival Corp said it would raise its price for U.S. and European guests starting April 1. Carnival Corporation (CCL) rose 9.6%, while Royal Caribbean Cruises (RCL) and Norwegian Cruise Line (NCLH) rose more than 7% and 5%, respectively.
Fed officials expect higher rates for ‘some time’ ahead
Minutes of the Federal Reserve's December meeting released on Wednesday showed officials were committed to fighting inflation and expected to keep raising rates until more progress was made. They showed the importance of keeping policy restrictive at a time when inflation remains unacceptably high.“Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2 percent, which was likely to take some time,” the meeting summary stated. “In view of the persistent and unacceptably high level of inflation, several participants commented that historical experience cautioned against prematurely loosening monetary policy.”
Job openings fell by about 50,000 to 10.45 million in November 2022, just shy of October's total but above the 10 million FactSet forecast, according to the monthly JOLTS report from the U.S. Bureau of Labor Statistics. Fed officials are closely watching the JOLTS survey for signs of a cooling labor market. Job vacancies remained at 6.4% of the labor force, suggesting that demand for workers remains high despite the Federal Reserve's efforts to cool the economy and lower inflation, which is driven in part by rising wages. On the other hand, the ISM manufacturing index showed that the industry contracted after 30 months of expansion, suggesting that higher interest rates may be slowing the economy.
Hong Kong Stock Connect had a net inflow of HK$5.01bn on Wednesday, of which China Mobile (941) had the largest net inflow, reaching HK$0.92bn; followed by Kuaishou (1024). CCB (939) recorded the largest net outflow at HK$0.21bn, followed by CG Services (6098).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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