U.S. stocks closed sharply higher on Wednesday, 3rd August 2022, with strong earnings results from PayPal and CVS Health Corp boosting market sentiment and helping the Nasdaq rise to its highest since early May.
Data showed that the U.S. service sector activity unexpectedly rebounded in July, with strong growth in orders, while supply bottlenecks and price pressures eased. This supports the view that the economy is not in recession, despite a decline in output in the first half of the year.
In a largely upbeat earnings season, strong results from a new batch of companies such as PayPal and CVS Health Corp boosted market popularity.
The stronger-than-expected earnings reports helped U.S. stocks rebound from declines triggered by concerns about inflation at multi-decade highs, interest rate hikes, and a shrinking economy.
Another factor behind Wednesday’s stock market rally is that investors are increasingly confident that the Federal Reserve has made most of the rate hikes needed to keep inflation down.
Meanwhile, Richmond Fed President Balkin said Wednesday that the Fed is committed to controlling inflation and returning it to the Fed’s 2 percent target, the latest policymaker to express anti-inflation resolve.
Another data released on Wednesday showed that U.S. factory orders grew solidly in June, and the final value of business equipment spending was revised upward, indicating that the manufacturing sector still has potential strength despite rising interest rates.
(Dow 30, 1-hour chart)
The Dow is focused on the 32781-line today. If the Dow runs steadily above the 32781-line, it will pay attention to the suppression strength of the two positions of 32975 and 33233. If the Dow runs steadily below the 32781-line, it will pay attention to the support strength of the two positions of 32455 and 32083.
Hong Kong Stocks
Overnight, European and American stock markets rose sharply. Hong Kong stocks opened higher across the board, the Hang Seng Index (HSI) rose 1.24% back to 20,000 points, the Hang Seng China Enterprises Index (HSCEI) rose 1.31%, the Hang Seng TECH Index (HSTECH) rose 2.25%.
On the market, large technology stocks were collectively strong, Alibaba Group Holding Limited (9988.HK) rose nearly 6%, Baidu, Inc. (9888.HK), Meituan (3690.HK), JD.com, Inc. (9618.HK), Kuaishou Technology (1024.HK) are up more than 2%, Xiaomi Corporation (1810.HK), NetEase, Inc. (9999.HK), Tencent Holdings Limited (0700.HK) rose more than 1%.
Insurance stocks rose ahead, semiconductor stocks continued yesterday’s rise, home appliance stocks, dairy stocks, e-cigarette concept stocks, sporting goods stocks rose.
On the other hand, gambling stocks fell sharply, SJM Holdings Limited (0880.HK) plunged more than 11%, food and medical stocks, and most of the shipping stocks fell.
(HK50, 1-hour chart)
HK50 focuses on the 20467-line today. If HK50 can run stably above the 20467-line, then pay attention to the suppression strength of 21450 and 22127. If HK50 runs below the 20467-line, then pay attention to the support strength of 19517 and 18606.
FTSE China A50 Index
(FTSE China A50, 1-hour chart)
FTSE China A50 focuses on the 13887-line today. If the A50 runs stably below the 13887-line, pay attention to the support strength of the two positions of 13544 and 13157. If the A50 runs above the 13887-line, it will open up further upward space. At that time, pay attention to the two positions of 14371 and 14695.
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