U.S. Stocks 

Fundamental Analysis: 

Major U.S. stock indexes fell more than 1% on Thursday, 5th January 2023, led by the Nasdaq, as evidence of a tight labor market eroded hopes that the Federal Reserve may soon pause its rate hike cycle, which has been focused on fighting inflation.

Thursday’s ADP national employment report showed a higher-than-expected increase in private jobs in December.

A separate report showed that initial jobless claims fell last week.

Data released on Wednesday showed a small decrease in U.S. job openings.

While a strong labor market would normally be welcomed as a signal highlighting the strength of the economy, the market is now seeing it as a reason for the Fed to keep interest rates high.

The three major stock indexes lost momentum late in the session and closed near their daily lows.

Among the 11 major S&P sectors, the real estate sector led the decline, down 2.9%, while it was the top percentage gainer on Wednesday.

The utilities sector followed closely behind, down 2.2%.

The Federal Reserve’s top priority is to curb inflation by tightening policy.

The market expects rates to peak at just above 5% in June.

A more comprehensive nonfarm payrolls report to be released on Friday will provide further clues about labor demand and the trajectory of interest rate hikes.

Technical Analysis:

(Dow 30, 1-hour chart) 

Execution Insight: 

The Dow today pays attention to the 32829-line. If the Dow runs stably above the 32829-line, then pay attention to the suppression strength of the 33390 and 33584 positions.

Hong Kong Stocks 

Fundamental Analysis: 

Hong Kong stocks “opened the door” in 2023, stabilizing the 20,000-point barrier and hitting a more than 5-month high.

From the perspective of industry performance, retail, software and services, media, real estate and other sectors rose to the top.

Science network stocks, domestic housing stocks and other weighted sectors continue to be favored by policy news, Hong Kong stocks recently regained upward momentum, and the elasticity is significantly higher than A shares.

In terms of science network stocks and platform economy, Tencent recently received approval from the State Press and Publication Administration for a number of games.

In addition to the Chongqing Banking and Insurance Regulatory Bureau approved the capital increase program of Chongqing Ant Consumer Finance Company, a subsidiary of Ant Group, the market is expected to continue the marginal relaxation of subsequent regulatory efforts.

In real estate, the market is expected to further support the policy side of high-quality real estate financing and look forward to more demand-side support policies, driving the Hong Kong real estate industry to rise again.

Expanding domestic demand policy is expected to continue to increase, is still the main line of short-term market transactions.

Domestic exports and boom data are still weak, and need to wait for bottom-up measures to continue to support.

In order to reverse the current lack of confidence as soon as possible, the policy side may increase support for the digital economy and platform enterprises to improve employment and raise residents’ income expectations.

The demand side of real estate may also have more supportive policies, including partial relaxation of restrictions, as well as room for further downward movement in mortgage interest rate costs.

Technical Analysis: 

(HK50, 1-hour chart) 

Execution Insight: 

HK50 pays attention to the 20467-line today. If HK50 can run stably above the 20467-line, then pay attention to the suppression strength of the two positions of 21450 and 22127.

FTSE China A50 Index 

Technical Analysis: 

(FTSE China A50, 1-hour chart) 

Execution Insight: 

FTSE China A50 pays attention to the 13339-line today. If A50 runs stably below the 13339-line, pay attention to the support strength of the 12900 and 12659 positions. If the A50 runs above the 13339-line, it will open up further upside space.

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