Daily Investment Strategy
Hang Seng Index rose 104 points on Wednesday
The Hang Seng Index rose 104 points or 0.5% to 21,436 on Wednesday. HSTECH fell 11 points or 0.3% to 4,547 and HSCEI rose 47 points or 0.7% to 7,310. Daily market turnover was HK$165.8bn.
Dow closes up 268 points, Nasdaq rises for fourth straight day
U.S. stocks rose on Wednesday, with investors increasingly confident that Thursday's CPI data will show cooling inflation and signal to the Federal Reserve that previous rate hikes have had the desired effect. The Dow Jones Industrial Average rose 268.91 points, or 0.80%, to 33,973.01. The S&P 500 gained 1.28% to close at 3,969.61. The Nasdaq composite index rose 1.76% to close at 10,931.67 points, continuing to lead the gains. Consumer discretionary stocks led the gains, with gains in both Amazon and Tesla, with the latter announced plans to expand its electric vehicle factory in Texas. The move follows demand concerns after Tesla recently slashed prices on its electric vehicles in China.
The World Economic Forum Davos summit begins on Jan. 16
The annual Global Risks Report, released ahead of the Davos summit, highlighted the cost of living crisis as the biggest short-term risk facing the world right now, and climate change as the biggest long-term threat. The world must cooperate more effectively in mitigating and adapting to climate change over the next decade to avoid “ecological breakdown” and continued global warming, the report said. The World Economic Forum Davos summit will begin on January 16 with the tagline “cooperation in a fragmented world.”
Economists expects to see a cooling inflation
Economists surveyed by Dow Jones expect the CPI to show prices cooled by a modest 0.1% in December from the previous month, though still up 6.5% from a year earlier. Economists expect the December CPI to rise 0.3 percent from the previous month and 5.7 percent from a year earlier, excluding food and energy prices. Expectations that inflationary pressures will show further signs of easing have boosted expectations that the Fed will be less hawkish.
Hong Kong Stock Connect had a net inflow of HK$0.97bn on Wednesday, of which China Mobile (941) had the largest net inflow, reaching HK$0.51bn; followed by Simcere Pharma (2096). Tencent (700) recorded the largest net outflow at HK$1.34bn, followed by Wuxi Bio (2269).
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