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U.S. & H.K. Stocks Tumble Amid Uncertainty Over Interest Rate Hikes


U.S. Stocks 

Fundamental Analysis: 

U.S. stocks posted their worst performance of the year so far on Tuesday, 21st February 2023, with major indicator stock indexes closing lower as investors interpreted a rebound in U.S. corporate activity in February as a sign that interest rates will need to remain high for longer to keep inflation under control.

The S&P 500 and Nasdaq closed lower for the third straight session, with the Dow Jones Industrial Average giving back all of its gains so far this year.

Data released earlier showed that U.S. business activity rebounded in February, touching its highest level in eight months.

S&P Global said its preliminary U.S. composite purchasing managers’ index (PMI), which tracks manufacturing and services, rose to 50.2 in February, compared with a final reading of 46.8 in January, helped by strong service sector activity.

The recent series of economic data show that the economy is resilient, in the Fed 2022 repeatedly raise interest rates to curb inflation, the economy is still performing well.

With inflation still far from the Fed’s 2% target and the economy remaining very buoyant, money market participants have been raising expectations for the peak federal funds rate, which is now forecast to reach 5.35% in July and is expected to remain near that level throughout the year.

In Tuesday’s broad-based decline, large technology stocks were hit, with Tesla, Amazon and Microsoft down anywhere from 2.1% to 5.3%.

The yield on the U.S. index 10-year Treasury note touched a three-month high, which was also negative for individual stocks.

Rising yields usually put pressure on growth stocks because valuations of growth stocks tend to be based on future profits, which can be significantly reduced as interest rates move higher.

The semiconductor index was also affected, falling heavily by 3.3%.

In other stocks, Home Depot plunged 7.1% to a three-month low after the largest U.S. home improvement supply chain warned of weak demand and issued a dismal profit forecast for 2023.

Technical Analysis:

(Dow 30, 1-hour chart) 

Execution Insight: 

The Dow pays attention to the 33233-line today. If the Dow runs stably above the 33233-line, then pay attention to the suppression strength of the 33584 and 33949 positions.

Hong Kong Stocks 

Fundamental Analysis: 

U.S. stocks fell hard overnight as clouded interest rate hikes loomed.

Hong Kong stocks opened lower, the HSI fell 0.08%, the national index fell 0.66%, the Hang Seng Technology Index fell 1%.

On the market, large technology stocks fell across the board, JD.com, Inc. (9618.HK), and Alibaba Group Holding Limited (9988.HK) fell more than 3%, while Tencent Holdings Limited (0700.HK), NetEase, Inc. (9999.HK), Kuaishou Technology (1024.HK), and Meituan (3690.HK) fell.

Auto stocks were down, while sporting goods stocks, photovoltaic stocks, restaurant stocks, gambling stocks fell significantly.

On the other hand, the bank stocks are strong to support the market, HSBC Holdings plc (0005.HK) rose 5.56% after the performance.

Drug stocks, and most of the beer stocks rose.

Technical Analysis: 

(HK50, 1-hour chart) 

Execution Insight: 

HK50 pays attention to the 21450-line today. If HK50 can run stably above the 21450-line, then pay attention to the suppression strength at the two positions of 22127 and 22785.

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[Disclaimer]  
This information is addressed to the general public solely for information purposes and should not be taken as investment advice, recommendation, offer, or solicitation to buy or sell any financial instrument. The information displayed herein has been prepared without any reference or consideration to any particular recipient’s investment objectives or financial situation. Any references to the past performance of a financial instrument, index, or a packaged investment product shall not be taken as a reliable indicator of its future performance. Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners and their respective employees, as well as managers, make no representation or warranties to the information displayed and Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners and their respective employees, as well as managers, shall not be liable for any direct, indirect, special or consequential loss or damages incurred a result of any inaccuracies or incompleteness of the information provided. Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners and their respective employees, as well as managers, shall not be liable for any direct, indirect, special or consequential loss or damages incurred as a result of any direct or indirect trading risks, profit, or loss arising from any individual’s or client’s investment. 

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