Daily Investment Strategy
Hang Seng Index fell 124 points on Tuesday
The Hang Seng Index fell 124 points or 0.75% to 16,505 on Tuesday. HSTECH fell 23 points or 0.6% to 3,708 and HSCEI fell 42 points or 0.74% to 5,593. Daily market turnover was HK$76.6bn.
S&P 500 near record high
The S&P 500 ended higher on Tuesday and is now near a record high as stock market gains extended beyond technology stocks as interest rate cut optimism remained dominant. The S&P 500 rose 0.59% to 4,768.37 points. With Tuesday's gains, the index only 0.6% away from its all-time closing level, a level set in January 2022. The Dow Jones Industrial Average rose 251.90 points to 37557.92 points, an increase of 0.68%. The Nasdaq rose 0.66% to 15,003.22 points. This is the first time since January 2022 that it has closed above 15,000 points. Stocks were led higher by raw materials and energy, which were supported by rising oil prices even as the United States announced plans to expand the size of a naval task force to protect shipping through the Red Sea. Materials sector stocks such as Mosaic Corp (MOS), FMC Corp (FMC) and Freeport McMoRan Copper and Gold Corp (FCX) rose after commodity prices including copper rose sharply and the market continued to bet that interest rate cuts would boost economic growth and metal demand.
Thomas Barkin was open to rate cuts
Federal Reserve Bank of Richmond President Thomas Barkin welcomed the fall in inflation in an interview with Yahoo Finance on Tuesday, but did not say how it would affect his expectations for the central bank's interest rate policy next year. "I think we're nicely positioned now with a 3% inflation rate moving down, and a 3.7% unemployment rate staying relatively steady," said Barkin, who will have a vote on the Federal Open Market Committee (FOMC) next year. He declined to say he agreed to a rate cut but suggested he would be open to a rate cut if the economy performed as expected.
Hong Kong Stock Connect had a net inflow of HK$1.27bn on Tuesday, of which Tracker Fund (2800) had the largest net inflow, reaching HK$0.75bn; followed by Easy Buy (1797). Meituan (3690) recorded the largest net outflow at HK$0.35bn, followed by Tencent (3690).
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