Daily Investment Strategy
Hang Seng Index rose 341 points on Wednesday
HSI rose 341 pts or 2.0% to 17,344. HSTI rose 102 pts or 3.0% to 3,516. HSCEI rose 120 pts or 2.0% to 6,107. Market turnover reached $118.86 billion.
S&P 500 posts best day since February as Powell hints at possible rate cut in September
The Federal Reserve kept interest rates unchanged and signaled it might ease monetary policy in September if inflation cools. Seven of the 11 S&P 500 sectors rose, led by technology and consumer discretionary stocks. Healthcare, real estate and consumer staples were the weakest performers. The S&P 500 rose 1.58% to close at 5,522.30 points, and the Nasdaq rose 2.64% to close at 17,599.40 points. It was the best trading day for both indexes since February. The Dow Jones Industrial Average rose 99.46 points to close at 40,842.79 points, an increase of 0.24%. Big tech stocks rebounded in Wednesday trading. Nvidia shares rose 12.8%, recouping some of this month's losses and recording its best single-day performance since February 22. Shares of the chipmaker soared as rival Advanced Micro Devices' better-than-expected results stoked optimism in the semiconductor market. Other technology stocks such as Apple, Meta Platforms and Amazon were also higher. However, Microsoft fell more than 1% due to disappointing quarterly cloud computing revenue.
Fed acknowledges inflation progress after keeping rates steady
Fed kept interest rates steady on Wednesday but acknowledged recent progress on inflation and a cooling labor market, raising hopes among investors that the central bank might begin cutting interest rates sooner rather than later. "We think that the time [for a rate cut] is approaching ... if we do get the data that we hope we can, then a reduction in our policy rate could be on the table in September," Fed chairman Jerome Powell said Wednesday. Also, he said “I don’t think of the labor market in its current state as a likely source of significant inflationary pressures. So I would not like to see material further cooling in the labor market.”
Hong Kong Stock Connect had a net inflow of HK2.29bn on Wednesday of which Tencent (700) had the largest net inflow, reaching HK$2.1bn; followed by BOC (3988). Tracker Fund (2800) recorded the largest net outflow at HK$1.7bn, followed by CSOP HS TECH (3033).
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