Daily Investment Strategy
Hang Seng Index rose 623 points on Monday
The Hang Seng Index closed at 22,736 points for the day, rose 623 points or 2.8%. The Hang Seng Technology Index reported at 5,227 points, up 248 points or 5.0%. The HSCEI Index rose 242 points, or 3.1%, to 8,156 points. The market turnover was HK$261.52billion.
September employment data far exceeded expectations
U.S. stocks closed higher on Friday. The Dow Jones Industrial Average rose by 341.16 points, or 0.81%, to 42,352.75 points; the Nasdaq Composite Index rose by 219.37 points, or 1.22%, to 18,137.85 points; and the S&P 500 Index rose by 51.13 points, or 0.90%, to 5,751.07 points. Last week, the Dow rose by 0.09%, the S&P 500 Index rose by 0.22%, and the Nasdaq rose by 0.1%, marking the fourth consecutive week of gains for all three indices.
In terms of economic data, labor force data released last Friday showed that the total number of non-farm payrolls in September was 254,000, far exceeding the revised previous values of 159,000 andthe market expectation of 147,000; the unemployment rate fell by 0.1% month-on-month to 4.1%, while the market had expected the unemployment rate to remain stable at 4.2%; wage growth increased by 4% year-on-year, compared to the previous value of 3.9% and the market expectation of 3.8%. This round of employment data generally exceeded market expectations and previous values, reflecting that the economy has not yet effectively cooled down.
The probability of a 0.25% rate cut in November has greatly increased
After the employment data was released, Nick Timiraos, known as a Fed insider, mentioned that this non-farm data, gives Fed no room for 0.5% rate cut by the FOMC in November, with rates remaining high to reduce market activity. According to the FedWatch Tool, the probability of a 0.25% rate cut in November has risen sharply from 46.7% a week ago to 97.4%.
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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