The Nasdaq and S&P 500 jumped more than 2% on Wednesday, 10th August 2022, after data showed U.S. inflation slowed more than expected in July, raising hopes that the Federal Reserve will become less aggressive in raising interest rates.
The U.S. Consumer Price Index (CPI) was flat in July after rising 1.3% in June, the Labor Department said. CPI rose 8.5% year-over-year, also lower than expected, after rising 9.1% in June.
For Americans who have watched inflation steadily climb over the past two years, the data is the first clear sign of a slowdown in inflation.
Federal funds rate futures traders now expect the Fed to have only a 43.5% chance of raising rates by 75 basis points at its September meeting, compared with 68% before the data was released.
They expect a 56.5% probability of a 50 basis point rate hike.
Federal Reserve Bank of Chicago President Evans said U.S. inflation did not accelerate in July, which is the first “positive” data on price pressures since the Fed began tightening policy, but he hinted that the Fed still has a lot of work to do.
The S&P 500 has had a tough start to the year, but rose nearly 15% after hitting a low in mid-June, largely due to market expectations that the Fed will be less hawkish than expected in the process of fighting inflation while trying to bring the economy to a soft landing.
But the S&P 500 is still in a bear market and must rise to more than 12% above the all-time high touched in January to open a new bull market.
Valuations are vulnerable to rising bond yields, high-growth stocks and mega-tech stocks rose, as U.S. bond yields fell sharply across the board. Apple, Alphabet, Amazon, and Microsoft all rose more than 2%.
(Dow 30, 1-hour chart)
The Dow is focused on the 32975-line today. If the Dow runs stably above the 32975-line, then it will pay attention to the suppression strength of the two positions of 33390 and 33811. If the Dow runs steadily below the 32975-line, it will pay attention to the support strength of the two positions of 32781 and 32455.
Hong Kong Stocks
U.S. inflation is expected to slow down, and interest rate hikes are expected to cool down, and global financial markets rebounded.
Hong Kong stocks opened higher in the morning session, the Hang Seng Index (HSI) rose 1.77% intraday back to 20,000 points, the Hang Seng China Enterprises Index (HSCEI) rose 1.93%, the Hang Seng TECH Index (HSTECH) rose 2.71%.
On the plate, large technology stocks and large financial stocks rose collectively to help the market strengthen. Baidu, Inc. (9888.HK), NetEase, Inc. (9999.HK) rose more than 3%, Xiaomi Corporation (1810.HK), Tencent Holdings Limited (0700.HK), Alibaba Group Holding Limited (9988.HK) are strong.
Everbright Securities Company Limited (6178.HK), most financial stocks and China Merchants Bank Co., Ltd. (3968.HK) were on demand.
With the iPhone14 listing approaching, Apple concept stocks strengthen significantly.
In July, the top brands on the Douyin platform achieved impressive growth, and sporting goods stocks rose collectively
Semiconductor stocks, auto stocks, home appliance stocks, and F&B stocks have risen.
On the other hand, paper stocks, Evergrande concept stocks were individually lower. South China Financial Holdings Limited (0619.HK), Century Ginwa Retail Holdings Limited (0162.HK) and other penny stocks fell by more than 10%.
On the other hand, paper stocks and Evergrande concept stocks fell individually, and penny stocks such as Nanhua Financial and Century Golden Flower fell by more than 10%.
The net inflow of the southbound capital was 1.001 billion Hong Kong dollars in half a day, and the market turnover was 43.5 billion Hong Kong dollars.
(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 steadily below the 13887-line, it will 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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