On Wednesday, U.S. stocks closed lower, marking the third consecutive trading day of decline for the Dow.  

The market continues to focus on U.S. corporate earnings and the prospect of a rate cut by the Federal Reserve.  

Strong retail sales data for December in the U.S. has diminished the likelihood of a Fed rate cut in March.  

The Fed’s Beige Book report noted that almost all regions reported a cooling labor market. 

The Federal Reserve released its Beige Book report on Wednesday afternoon, stating that most of the 12 Federal Reserve districts reported little to no significant change in economic activity since the last Beige Book release. 

Quarterly reports of U.S. stocks remain a focal point, with corporate profit growth likely to be a significant test for the market, potentially setting the tone for the U.S. stocks in 2024. 

Jeffrey Buchbinder, Chief Equity Strategist at LPL Financial, remarked, “While this reporting period may lack the eye-catching headline news of ‘the profit downturn has ended’ that we saw last quarter, it remains crucial as it sets the tone for 2024.  

2023 was a year of strong returns driven by valuation improvement, and this year, corporate earnings may have to step up to the plate.” 

U.S. Stock Market

Fundamental Analysis: 

Large-cap tech stocks collectively declined, with Tesla dropping nearly 2%, Intel falling over 2%, and minor decreases for Amazon, Apple, and Google.  

Precious metals and energy sectors led the declines, with Plug Power dropping over 10%, Pan American Silver falling over 6%, JinkoSolar dropping over 5%, and several other energy-related companies experiencing declines of over 3%.  

The banking sector continued its downward trend, with major banks such as JPMorgan Chase and Goldman Sachs reporting declines. 

Spirit Airlines plummeted over 22% after a U.S. judge blocked the merger between JetBlue Airways and Spirit Airlines on antitrust grounds. 

Popular Chinese concept stocks mostly declined, with the Nasdaq Golden Dragon China Index dropping 2.59%. JD.com and XPeng Motors fell nearly 5%. 

Meanwhile, Weibo, NIO, iQiyi, Tencent Music, and others saw declines of over 3%. Hong Kong’s FUTU Holdings experienced a slight increase. 

Technical Analysis:   

(S&P 500 Index, 1-day chart) 

Market Trends: 

• Dow Jones dropped 94.45 points, or 0.25%, closing at 37,266.67 
• Nasdaq fell 88.72 points, or 0.59%, closing at 14,855.62. 
• S&P 500 Index declined 26.77 points, or 0.56%, closing at 4,739.21. 

Hong Kong Stock Market

Fundamental Analysis: 

The three major Hong Kong indices fluctuated and showed repeated upward movements on the day.  

Notable stock movements included gains in the tech sector, with Baidu rising over 3%, and gains for Netease, Meituan, and Alibaba by nearly 2%. JD.com saw a reverse trend, dropping nearly 1%.  

Automotive stocks had mixed performances, with Yadea rising nearly 4% and XPeng dropping nearly 2%.  

Shipping stocks rose uniformly, with China Feihe International surging over 6%.  

Photovoltaic stocks performed well, with Xinyi Solar rising over 4%.  

Petroleum stocks generally declined, with PetroChina dropping nearly 2%, while gold stocks collectively fell, led by Shandong Gold dropping nearly 3%. 

Tech stocks in mainland China saw a broad increase, with Baidu rising over 3%, and Netease, Meituan, and Alibaba gaining nearly 2%.  

JPMorgan Chase’s report stated that the overall performance of mainland Chinese tech stocks last year, influenced by the market’s downward forecast, is expected to continue providing good risk returns through investment-driven stock selection strategies this year. 

Technical Analysis:  

(Hang Seng Index, 1-day chart) 

Market Trends: 

• Hang Seng Index (HSI) increased by 0.64%, closing at 15,374.34. 
• Hang Seng Tech Index (HSTECH) rose by 0.54%, closing at 3,177.06. 
• Hang Seng China Enterprises Index (HSCEI.) rose by 0.58%, closing at 5,162.41. 

FTSE China A50 Index

Fundamental Analysis: 

A-shares saw a gap-down opening for the three major indices.  

After the opening, the Shanghai Composite Index fluctuated downward, falling below 2800 points and briefly dropping over 2%, marking a new low since April 28, 2020.  

The ChiNext Index turned red after an initial rise and fell back in fluctuations.  

The market stabilized somewhat in the morning, with a slight narrowing of the Shanghai Composite Index’s decline and a return to gains for the ChiNext Index. 

Among industry sectors, the photovoltaic equipment sector stood out, while the gaming, energy metals, and software development sectors saw relatively smaller declines.  

The petroleum industry, commercial and retail, tourism and hotel, mining, and cement and building materials sectors led the declines. 

Technical Analysis: 

(SSE Composite Index, 1-day chart) 

Market Trends: 

• Shanghai Composite Index (SHCOMP) dropped 1.59%, closing at 2,788.69. 
• Shenzhen Component Index (SZCOMP) dropped 0.91%, closing at 8,680.09. 
• ChiNext Index (CHINEXT) increased by 0.02%, closing at 1,700.02. 
• SSE STAR Market 50 Index (SSE50) dropped 0.95%, closing at 749.86. 

---

Forward-looking Statements    
This article contains “forward-looking statements” and may be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “hope”, “intend”, “may”, “might”, “plan”, “potential”, “predict”, “should”, or “will”, or other variations thereon or comparable terminology. However, the absence of such terminology does not mean that a statement is not forward-looking. In particular, statements about the expectations, beliefs, plans, objectives, assumptions, future events, or future performance of Doo Prime will be generally assumed as forward-looking statements.     

Doo Prime has provided these forward-looking statements based on all current information available to Doo Prime and Doo Prime’s current expectations, assumptions, estimates, and projections. While Doo Prime believes these expectations, assumptions, estimations, and projections are reasonable, these forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond Doo Prime’s control. Such risks and uncertainties may cause results, performance, or achievements materially different from those expressed or implied by the forward-looking statements.     

Doo Prime does not provide any representation or warranty on the reliability, accuracy, or completeness of such statements. Doo Prime is not obliged to provide or release any updates or revisions to any forward-looking statements.    

Risk Disclosure
Trading in financial instruments involves high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding the investor’s initial investment could incur within a short period of time. The past performance of a financial instrument is not an indication of its future performance. Investments in certain services should be made on margin or leverage, where relatively small movements in trading prices may have a disproportionately large impact on the client’s investment and the client should therefore be prepared to suffer significant losses when using such trading facilities.

Please ensure you read and fully understand the trading risks of the respective financial instrument before engaging in any transaction with Doo Prime’s trading platforms. You should seek independent professional advice if you do not understand any of the risks disclosed by us herein or any risk associated with the trade and investment of financial instruments. Please refer to Doo Prime’s Client Agreement and Risk Disclosure Statement to learn more.

Disclaimer    
While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.