Daily Investment Strategy
Hang Seng Index was flat on Thursday
The Hang Seng Index was flat at 16,645 on Thursday. HSTECH rose 8 points or 0.2% to 3,654 and HSCEI rose 20 points or 0.4% to 5,649. Daily market turnover was HK$70.3bn.
Nasdaq closes lower for fifth straight day, longest losing streak since October 2022
The technology-heavy Nasdaq index fell 0.56% to close at 14,510.30 points. Since closing on December 27, the index has fallen nearly 4%. The S&P 500 fell 0.34% to close at 4,688.68 points, its fourth consecutive day of losses. The Dow Jones Industrial Average was an exception, barely rising 10.15 points to close at 37,440.34 points, an increase of 0.03%. Big tech stocks like Apple have underperformed at the start of the year as overvalued valuations and uncertainty over when the Federal Reserve will start cutting interest rates have led investors to worry that the market is too optimistic. Apple shares fell more than 5% this week. Shares of the tech giant fell more than 1% on Thursday after Piper Sandler downgraded the company, following a downgrade from Barclays two days earlier. Mobileye Global fell 24.5% after it forecast preliminary revenue for fiscal 2024 that missed expectations, while Walgreens Boots Alliance (WBA) fell 5.1% after it cut its dividend in half. Rising yields on longer-dated U.S. Treasuries, with the benchmark 10-year note closing at 4%, prompted traders to move away from growth stocks and into other sectors. Financials were one of the few positive sectors in the S&P 500, buoyed by Allstate (ALL), which rose 2.4% to close at a record high after Morgan Stanley upgraded the insurance company to "overweight". Bank stocks are doing well ahead of earnings season starting next week. JPMorgan Chase & Co. (JPM) and Truist Financial Corporation (TFC) rose 0.7% and 1.3% respectively, with both companies received positive rating from analyst. Among the latest economic data, the ADP employment report showed that U.S. private employer hiring exceeded expectations in December, indicating that the job market continues to be strong and should continue to support the economy. U.S. non-farm payrolls data will be released on Friday.
U.S. private companies added 164,000 jobs in December
According to data from employment data processing agency ADP, private employment was 164,000 last month, higher than the downwardly revised 101,000 in November and the expected 115,000. At the same time, wage growth fell to 5.4% from 5.6% a month ago, continuing a deceleration that began in September 2022. "We're returning to a labor market that's very much aligned with pre-pandemic hiring," said ADP Chief Economist Nela Richardson in a statement. "While wages didn't drive the recent bout of inflation, now that pay growth has retreated, any risk of a wage-price spiral has all but disappeared."
Hong Kong Stock Connect had a net inflow of HK$2.15bn on Thursday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$0.98bn; followed by CNOOC (883). Tencent (700) recorded the largest net outflow at HK$0.42bn, followed by CCB (939).
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