Daily Investment Strategy
Hang Seng Index rose 708 points on Friday
The Hang Seng Index opened 522 points higher on Friday and then expanded its gains repeatedly. It once rose 819 points to 20,743 points, and rose 708 points or 3.6% to 20,632 points for the whole day; the H-Share Index rose 213 points or 3% to 7,300 points; the Hang Seng Technology Index rose 243 points or 5.8%, reported at 4,453 points. The total daily turnover of the market was HK$445.7 billion.
S&P 500 ends lower as U.S. Treasury yields surge
U.S. stocks underperformed on Monday as rising oil prices and rising U.S. Treasury yields weighed on market sentiment. The Dow Jones Industrial Average fell 398.51 points, or 0.94%, to close at 41,954.24 points. The S&P 500 fell 0.96% to close at 5,695.94 points; the Nasdaq fell 1.18% to close at 17,923.90 points. The third-quarter earnings season begins this week, with major banks JPMorgan Chase, Wells Fargo and Bank of New York Mellon reporting on Friday. Markets will be watching closely to determine whether corporate profits can withstand pressure from high interest rates and sticky inflation. Bullish investors hope the results will justify ever-higher stock market valuations. Despite recent volatility due to rising geopolitical tensions in the Middle East, the S&P 500 remains near all-time highs. Alphabet shares fell more than 2% after a U.S. judge issued a final ruling in an antitrust lawsuit filed by Epic Games, forcing the technology giant Google to provide other downloadable applications on Android phones other than the Google Play Store. Google vowed to appeal the ruling. Pfizer shares rose 2.2% after Bloomberg reported that investor Starboard Value has taken a stake of about $1 billion in the pharmaceutical giant, hoping to help the troubled company turnaround. Hershey shares fell 2% as UBS downgraded the stock to neutral from market perform on concerns that inflation may continue to erode its profit margins.
The 10-year U.S. Treasury yield returned above 4% as bets on a sharp rate cut eased
U.S. Treasury yields jumped after U.S. employment data for September was much stronger than expected, dimming hopes of another major interest rate cut by the Federal Reserve at its November meeting. The 10-year U.S. Treasury yield closed above 4% for the first time since August last year. Several Fed officials are set to speak in the coming days and will provide more clues on monetary policy. The minutes of the Federal Reserve's September meeting, due to be released on Wednesday, will also provide further clues about a rate cut. September consumer price index will also be released this week, which may affect expectations for the direction of U.S. interest rates.
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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