Daily Investment Strategy
Hang Seng Index fell 326 points on Thursday
The Hang Seng Index fell 326 points or 1.7% to 18,868 on Thursday. HSTECH fell 96 points or 2.4% to 3,896 and HSCEI fell 115 points or 1.7% to 6,701. Daily market turnover was HK$129.9bn.
Dow drops 600 points
The S&P 500 ended lower on Thursday as U.S. Treasury yields rose on signs of continued inflation, dampening hopes for a rate cut and offsetting gains in technology stocks led by Nvidia. The Dow Jones index fell 605.78 points to close at 39,065.26 points, a decrease of 1.53%, making it the worst trading day this year. Boeing was the worst performer on the Dow, falling 7.6%. The S&P 500 fell 0.74% to close at 5267.84 points, and the Nasdaq fell 0.39% to close at 16736.03 points. Nvidia shares soared 9.3%, surpassing the $1,000 mark, after Nvidia reported stronger-than-expected first-quarter results and announced a stock split. However, most stocks in the broad market indexes turned negative on Thursday, with more than 400 stocks in the S&P 500 falling. In addition to Nvidia's earnings, there was more corporate news to digest, with shares of Live Nation Entertainment (NYSE: LYV ) falling 8% on reports that the U.S. Department of Justice is planning to sue its ticketing division for alleged monopolistic practices. The company has filed lawsuits and lawmakers are seeking to separate its ticketing unit. Aircraft maker Boeing Co. shares fell more than 7% after the company warned investors it was unlikely to achieve positive cash flow this year.
New signs of rising inflation cool interest rate cut bets
The S&P Global PMI Composite Output Index rose sharply from 51.3 in April to 54.4 in May. The report also highlighted that "the rate of inflation accelerating to register the second-largest monthly increase seen over the past eight months." Meanwhile, initial jobless claims fell more than expected in the week of May 11, fueling concerns about demand-led inflation and forcing traders to curb bullish bets on stocks.
Hong Kong Stock Connect had a net inflow of HK3.51bn on Thursday, of which BOC (3988) had the largest net inflow, reaching HK$1.13bn; followed by Tracker Fund (2800). Tencent (700) recorded the largest net outflow at HK$0.24bn, followed by Meituan (3690).
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