KGI Asia Commentary
HSI fell 98 points on Tuesday
The Hang Seng Index fell 98 points or 0.5% to 18,479 on Tuesday. HSTECH fell 85 points or 2.1% to 3,922 and HSCEI fell 45 points or 0.7% to 6,526. Daily market turnover was HK$113.4bn.
S&P 500 ends higher as U.S. Treasury yields fall
The S&P 500 edged higher on Tuesday, as investors continued to digest a series of corporate earnings reports, including weak subscriber growth at Disney. The Dow Jones Industrial Average rose 31.99 points to close at 38884.26 points, an increase of 0.08%. The index rose for a fifth day in a row, its longest winning streak since December. The S&P 500 rose 0.13% to close at 5,187.70 points. The Nasdaq fell 0.1% to close at 16,332.56 points. The 10-year U.S. Treasury yield last fell about 3 basis points to 4.45%. Media and entertainment giant Disney reported revenue that was slightly lower than expected, but exceeded quarterly earnings estimates, and its shares fell 9.5%. Shares of defense technology company Palantir plunged 15% after lower-than-expected performance guidance. Shares of Peloton jumped 15.5% after news broke that private equity firms had been considering acquiring Peloton, people familiar with the matter told CNBC. Luxury electric car maker Lucid Group fell 14% as it forecast higher capital spending this year and maintained a disappointing annual production forecast due to lower-than-expected demand for electric vehicles. At a virtual event on Tuesday, Apple unveiled a slew of new iPad pro models, including a new M4 chip and iPad Air tablets. Apple will hold its developer conference next month, where some expect the tech giant to announce its artificial intelligence strategy.
Fed's Kashkari says interest rates will be higher for longer
Minneapolis Fed President Neel Kashkari said the central bank may keep interest rates on hold "for an extended period of time" until officials are sure inflation is moving toward its target. In an essay published earlier on Tuesday, Kashkari said recent inflation data raised questions about whether monetary policy would be restrictive enough to allow inflation return to 2%. And pointed out that, in theory, the housing market should be one of the more sensitive areas of the economy to interest rates. National 30-year fixed mortgage rates rose from an average of less than 3% in 2021 to over 7% today. But the housing market remains " remarkably resilient " due to a lack of new home construction and homeowners staying in their homes longer.
Hong Kong Stock Connect had a net inflow of HK2.14bn on Tuesday, of which BOC (3988) had the largest net inflow, reaching HK$0.59bn; followed by Li Auto (2015). Kuaishou (1024) recorded the largest net outflow at HK$0.04bn, followed by Meituan (3690).
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