Decelerating Inflation Lifts Dow, S&P To New Highs, Eyes On Hong Kong Food And Drug Stocks - Doo Prime News
Doo Prime News > Analysis > Global Stock Markets > Decelerating Inflation Lifts Dow, S&P To New Highs, Eyes On Hong Kong Food And Drug Stocks

U.S Stocks 

Fundamental Analysis:

The Dow and S&P 500 hit record highs, boosted by the slowdown in U.S. inflation.

The U.S. stock markets, Dow Jones industrials and S&P 500 closed at record highs on Wednesday, 11th August 2021, as data showed that the U.S. inflation growth may have peaked. This is while growth-related sectors climbed after a major infrastructure bill has been passed.

The U.S. Department of Labor said that the Consumer Price Index (CPI) rose by 0.5% last month after it rose by 0.9% in June. This is the largest month-on-month decline in inflation in 15 months, easing concerns that inflation could get out of hand.

Steven Ricchiuto, U.S. chief economist at Mizuho Securities, said: “Of course, the data shows a further deceleration in inflation. This figure will put the Fed in a dilemma because they’ve come out and made statements about tapering bond purchases, tightening interest rates, and taking precautions. But the inflation numbers aren’t where they should be. Yet, it certainly doesn’t indicate that things are out of control either.”

In recent months, investors have been keeping a close eye on inflationary pressures, worrying that continuous price increases could prompt the Fed to begin tapering its ultra-loose policy stance sooner than expected.

Kansas City Fed President Esther George said on Wednesday that the U.S. economy is growing at a strong pace, suggesting it is time to start cutting monetary policy support. In addition, Dallas Fed President Robert S. Kaplan said the Fed should announce a timetable for tapering its bond purchases in September and begin it in October.

With these conditions, the Dow rose by 0.62%, the S&P 500 rose by 0.25%, while the Nasdaq fell by 0.16%.

Technical Analysis: 

(Dow30,1-hour chart) 

Execution Insight: 

Today, on the Dow, continue to pay attention to the 35110-line. When the Dow once again falls below the 35110-line, it will open up a potential setback. At that time, pay attention to the support between the 34870 and 34724 positions. With that, the Dow should continue to follow the trend when it is above the 35110-line. The idea of seeing more is key.

Hong Kong Stocks

Fundamental Analysis:

The Hang Seng Index fell by 36.39-points, or 0.14%, to 26623.77-points at the opening. The Hang Seng China Enterprises Index (HSCEI) fell by 23.7-points, or 0.25%, to 9524.43-points at the opening, while the China Red Chip Index fell by 1.22-points, or 0.03%, to 3,843.37-points at the opening. In addition, the Hang Seng Technology Index fell by 0.24% to 6804-points.

Large technology and Internet sector stocks generally fell. Meituan-W fell nearly by 2%, JD.com, Inc.-SW fell by more than 1%, while Tencent Holdings, Alibaba, and Baidu, Inc.-SW opened slightly lower.

Some pharmaceutical and biotech sectors in Hong Kong stocks fell. Fosun Pharmaceutical fell by 3.65%, Kaiser Pharmaceutical-B fell by 3.36%, BeiGene fell by 2.88%, Nuocheng Jianhua-B fell by 2.6%, CanSino Biologics went down by 2.4%, while China Biopharmaceuticals sector fell by 0.88%.

The Central Committee of the Communist Party of China and the State Council issued the “Implementation Outline for the Construction of a Government under the Rule of Law (2021-2025)”, proposing to strengthen the law enforcement in key sectors such as food and drugs.

Technical Analysis: 

(HK50,1-hour chart) 

Execution Insight: 

On HK50 today, mainly focus on the 26535-line. If the HK50 runs above the 26535-line, it will apply pressure on the suppression of the 26951 and 27402 positions in turn. If the strength of the HK50 falls below the 26535-line, attention should be diverted to the support of the 25816-line.

FTSE China A50 Index

Technical Analysis:

(A50,1-hour chart) 

Execution Insight: 

On A50, pay attention to the 15666-line today. If the A50 is above the 15666-line, the main idea is to maintain the bullish trend. At that time, pay attention to the suppression of the 16163 and 16442 positions. If the A50 falls below the 15666-line, then pay attention to the support of the 15184-line.

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