Daily Investment Strategy

Hang Seng Index fell 113 points on Thursday

The Hang Seng Index fell 113 points or 0.5% to 21,958 on Thursday. HSTECH was flat at 4,696 and HSCEI fell 54 points or 0.7% to 7,505. Daily market turnover was HK$140.0bn.

S&P and Nasdaq rose on corporate earnings

The S&P 500 rose to a five-month high on Thursday as better-than-expected earnings from Meta further improved confidence in technology stocks. The S&P 500 rose 1.47% to 4,179.76, its highest level since last August. Meanwhile, the tech-heavy Nasdaq Composite rose 3.25% to 12,200.82, its highest level since last September.

The Meta Platforms company reported fourth-quarter revenue that topped expectations and announced a $40 billion share buyback program, sending its shares up more than 23%. Sentiment was further boosted after Chief Executive Mark Zuckerberg detailed plans that include flattening the organizational structure to make the company more efficient. Other big tech stocks included Apple Inc, Amazon Inc and Alphabet Inc, which all reported quarterly results after the close. Tesla extended its recent gains, rising more than 3%. Reuters reported that Tesla will boost production at its Shanghai factory to nearly 20,000 vehicles a week in February and March, saying the uncertainties over Chinese demand appears to be fading.

On the earnings front, Apple Inc reported sales and profit below Wall Street expectations on Thursday as the coronavirus outbreak in China disrupted production of the company's biggest-selling product, leading to weak iPhone sales. After the financial report was announced, Apple's stock price fell as much as 4% in after-hours trading. Amazon.com Inc on Thursday issued weaker- than- expected first-quarter guidance, while sales growth in the lucrative cloud computing unit slowed in the fourth quarter. Shares were down 5% in after-hours trading. Alphabet Inc reported fourth-quarter profit and revenue below Wall Street expectations on Thursday, and the chief executive said Google's digital advertisers cut spending more during the period than in the previous quarter. Alphabet shares fell in after-hours trading.

A slew of U.S. economic data released

The U.S. Department of Labor announced that the number of initial jobless claims for the week ended January 28 decreased by 3,000 to 183,000, lower than the expected 195,000; The number fell by 11,000 to 1.655 million, missing expectations for 1.684 million. In addition, the nonfarm labor productivity of the United States rose by 3% in the last quarter, the strongest growth in a year, and more than expected by 2.4%. During the period, the increase in unit labor costs slowed to 1.1%, which was less than the expected 1.5%. It will help ease inflationary pressures if the situation continues. U.S. factory orders rose 1.8 percent in December, worse than the expectations of a 2.3 percent increase, while durable goods orders rose 5.6 percent in final, in line with expectations.

Hong Kong Stock Connect had a net outflow of HK$1.63bn on Thursday, of which Li Auto (2015) had the largest net inflow, reaching HK$0.15bn; followed by Sensetime (20). CCB (939) recorded the largest net outflow at HK$0.54bn, followed by Meituan (3690).