Daily Investment Strategy
HSI fell 68 points on Tuesday
The Hang Seng Index fell 68 points or 0.3% to 20,011 on Tuesday. HSTECH fell 12 points or 0.3% to 4,538 and HSCEI fell 45 points or 0.6% to 6,854. Daily market turnover was HK$135.2bn.
S&P starts August down slightly
The S&P opened lower in August as investors focused on a slew of corporate earnings reports and assessed a slew of new economic data. The S&P 500 lost 0.27% to close at 4,576.73 and the Nasdaq Composite lost 0.43% to close at 14,283.91. The Dow Jones Industrial Average rose 71.15 points, or 0.2%, to 35,630.68. Shares of Norwegian Cruise Line Holdings Ltd. fell 12% after the company reported lower-than-expected third-quarter guidance that overshadowed better-than-expected second-quarter earnings. The company forecast third-quarter adjusted earnings of 70 cents a share, below expectations of 80 cents a share, raising investor concerns about demand. The weaker guidance weighed on other cruise stocks such as Carnival Corp. Pfizer reported a mixed quarter, with earnings peaking but revenue missing expectations. The company also lowered its full-year revenue forecast, warning of "near-term revenue challenges." Meanwhile, Merck & Co. reported second-quarter revenue that topped analysts' expectations, boosted by a strong performance from its cancer drug Keytruda. Shares of Uber closed down more than 5% on Tuesday after it reported second-quarter earnings that missed analysts' expectations but provided upbeat guidance. This week is the busiest for the S&P 500 to report second-quarter results, with more than 160 companies due to report results. More than half of the companies in the broader index have reported earnings, with 82% of them topping earnings estimates, according to FactSet. That has fueled hopes among some that the economy will be able to avoid recession as inflation shows signs of cooling.
Job market showing signs of weakness
On the economic front, the labor market appeared to ease as the number of job vacancies fell more than expected in June to 9.58 million from 9.61 million in May. The number is still well above historical norms but down from a peak of more than 12 million in March 2022, according to the Job Openings and Labor Turnover Survey (JOLTS) released Tuesday. Signs of weakening demand for jobs are likely to be welcomed by the Fed and boost expectations that the central bank is unlikely to resume raising interest rates.
Hong Kong Stock Connect had a net outflow of HK$9.4bn on Tuesday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$6.31bn; followed by HSCEI ETF (2828). Tencent (700) recorded the largest net outflow at HK$1.0bn, followed by Meituan (3690).
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.
The materials contained herein are provided by KGI Asia Limited ("KGI") for information only. While such materials are based on or derived from sources believed to be reliable, KGI makes no representation or warranty (express or implied) as to their accuracy or reliability. Neither the information nor the opinions expressed herein constitute, or are to be construed as, an offer or invitation or solicitation of an offer to buy or sell any securities or investments. KGI and its officers, employees, agents and affiliates may have interests in the securities or investments covered herein and accept no liability whatsoever for any loss or consequence whatsoever (whether direct or indirect) resulting from any use of or reliance by you on such materials.
