Daily Investment Strategy
Hang Seng Index rose 298 points on Monday
the Hang Seng Index expanded to 413 points, rising 287 points or 1.8% today to close at 16,511; the HSCEI rose 84 points or 1.5% to close at 5,831; the HSTECH rose 58 points. or 1.8%, closing at 3,336; the daily market turnover was HK$104.93bn. Chinese technology stocks generally rose today. Tencent (0700) rose 5.5%. Its "Dungeon & Fighter" mobile game will be launched on the 21st of Jun. Alibaba (9988) rose 2.6%. Li Auto (2015) followed Tesla (TSLA.US) in price cuts, and its stock price fell 8.3%.
The "Magnificent 7" is going to dominate the direction of the U.S. market
U.S. stock market has entered the 1Q24 earnings announcement period, and the market focused on the performance of U.S. companies this year amid high interest rates and rebounding energy prices. The "Magnificent 7" have pushed the valuation of U.S. stocks increase in the first quarter and they are expected to drive S&P 500 profits higher in 1Q24. The market expected that the earnings of five companies among the "Magnificent 7" will increase by 64%, including NVIDIA (NVDA.US), Amazon.com (AMZN.US), Meta Platform (META.US), Alphabet (GOOGL.US) and Microsoft (MSFT.US). Excluding them, the combined earnings of the remaining 495 companies in the S&P 500 would have declined 6.0% in the first quarter.
All three major U.S. stock indexes recorded gains. The Nasdaq composite rose 169 points, or 1.1%, to close at 15,451; the S&P 500 rose 43 points, or 0.9%, to close at 5,010; DJIA rose 253 points, or 0.7%, to close at 38,239.
China vehicle battery installation volume expected to remain sluggish
The CPCA expected that the battery installation in EV is still at a low level in this year. At present, the proportion of China's power battery production is constantly decreasing, from 76% at the peak in 2020 to 46% in the first quarter of this year. The main reason for the decline is the overproduction of batteries and the relative pressure on inventory level. In the past three years, the supply of lithium raw has increased significantly due to the increase in production capacity. In addition, Chinese electronics consumer goods Market demand is insufficient. Since February, the price of lithium carbonate has bottomed out but turned on a weak trend. Some upstream companies in the lithium-related industry chain might be under pressure in the future
Hong Kong Stock Connect had a net inflow of HK2.9bn on Monday, of which Tencent (0700) had the largest net inflow, reaching HK$5.9bn; followed by CNOOC (0883).
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