Daily Investment Strategy
Hang Seng Index fell 247 points on Monday
The Hang Seng Index closed at 16,698 points for the day, down 247 points or 1.5%. The Hang Seng Technology Index reported at 3,339 points, down 46 points or 1.4%. The HSCEI Index fell 98 points, or 1.6%, to 5,876 points. The market turnover was HK$135.0billion.
S&P 500 posts worst day since 2022
U.S. stocks fell sharply on Monday, with the Dow recording its worst day in nearly two years, as worries about the health of the U.S. economy triggered a sell-off in global markets. The Dow Jones index fell 1,033.99 points, or 2.6%, to close at 38,703.27 points. The Nasdaq fell 3.43% to close at 16,200.08 points, and the S&P 500 fell 3% to close at 5,186.33 points. The Dow Jones Industrial Average and S&P 500 index posted their largest one-day losses since September 2022. Japanese stocks suffered their biggest drop since Wall Street's "Black Monday" in 1987, fueling concerns about global market turmoil. Apple shares fell more than 4% after Buffett's Berkshire Hathaway sold nearly half of its shares. Meanwhile, Alphabet shares fell more than 6% after a federal judge ruled on Monday that Google is a "monopolist" and violated antitrust laws in the search and text advertising markets. Nvidia shares fell 7% on reports that the chipmaker's upcoming artificial intelligence chips have been delayed due to design flaws. Most major companies have already reported earnings, but there are still some notable results expected in the coming days. Industry leader Caterpillar and ride-sharing giant Uber Technologies are scheduled to report results on Tuesday. Super Micro Computer, which is also set to go public on Tuesday, has seen its valuation soar on artificial intelligence hype. Media giants Walt Disney and Warner Bros. Discovery will report results on Wednesday.
U.S. interest rate futures price reflects chance of Fed rate cut early
In federal funds futures, the market is pricing in a 25 basis point rate cut in August. However, some market participants are skeptical of the Fed cutting interest rates ahead of its September meeting. U.S. Treasury yields remained lower on Monday but recovered from session lows, helped by a rebound in a U.S. services index that rose to 51.4 from 48.8 in June. Comments from Federal Reserve officials this week will be closely watched as investors anticipate aggressive rate cuts ahead.
Hong Kong Stock Connect had a net inflow of HK1.38bn on Monday of which Tencent (700) had the largest net inflow, reaching HK$0.68bn; followed by Xiaomi (1810). HSBC (5) recorded the largest net outflow at HK$0.64bn, followed by PetroChina (857).
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