Following this week’s announcement of the Federal Reserve’s interest rate decision and policy, the U.S. dollar and U.S. bonds surged, putting pressure on major stock indices.  

Additionally, economic data released this week indicates continued tightness in the U.S. labor market, raising concerns that the Federal Reserve will persist with a tightening policy. 

The CME Group’s FedWatch tool shows that traders are betting on the Federal Reserve keeping interest rates unchanged in November and December, with odds at 74% and 55%, respectively. 

A strategist at Danske Bank noted, “The Federal Reserve sent a message on Wednesday about ‘keeping higher rates for longer,’ causing the most significant downturn in U.S. stocks in six months.  

The 10-year Treasury yield has broken 4.5% for the first time since 2007, and the forecast for future rate cuts has narrowed to just 75 basis points.” 

The strike by U.S. autoworkers has expanded. Rory Fain, the president of the United Auto Workers (UAW), stated on Friday that Ford has agreed to improve profit-sharing formulas.  

While issues still exist with Ford, the automaker is taking negotiations seriously, and there have been no concessions.  

Ford has agreed to convert temporary workers to permanent employees after a minimum of 90 days and reinstate cost-of-living allowances (COLA) upon approval. 

U.S. Stocks 

Fundamental Analysis: 

Tesla’s Model 3 refreshed version was unveiled in Shanghai on Friday, with prices starting at ¥25,990 for the rear-wheel-drive refreshed version and ¥29,590 for the long-range all-wheel-drive refreshed version. The new cars are produced at the Shanghai Gigafactory. 

Amazon announced on Friday that Prime Video content with ads will launch in early 2024 in the United States, the United Kingdom, Germany, and Canada, followed by France, Italy, Spain, Mexico, and Australia later this year. 

XPeng Motors saw a more than 3% increase as it launched the updated G9 model.  

Goldman Sachs issued a report indicating that the new XPeng G9 is competitively priced and has high-end features, projecting increased sales and profit margins for the fourth quarter of 2023 and raising its sales forecasts for XPeng from 143,000, 247,000, and 381,000 vehicles to 156,000, 264,000, and 401,000 vehicles, with revenue forecasts raised by 6% to 10%. 

Technical Analysis:   

(S&P 500 Index, 1-day chart) 

Market Trends: 

• Dow Jones Industrial Average closed down by 106.58 points, a 0.31% decrease, closing at 33,963.84 points. 
• Nasdaq Composite Index fell by 12.18 points, a 0.09% decrease, closing at 13,211.81 points. 
• S&P 500 Index dropped by 9.94 points, a 0.23% decrease, closing at 4,320.06 points. 

Hong Kong Stocks 

The three major indices opened low and continued to decline.  

Core technology stocks were generally down, with JD.com falling over 3%, while Kuaishou, Tencent Holdings, NetEase, and Meituan all fell more than 2%.  

New energy vehicle companies had mixed performance, with NIO dropping nearly 5% and XPeng Motors rising over 1%.  

Real estate and property management stocks collectively fell, with China Evergrande Group down over 24% and Evergrande Property Services down over 11%.  

In contrast, the pharmaceutical outsourcing and biotechnology sectors rose. Two new stocks were listed today, with LeCun Logistics falling over 4% and Youzhijie Biotech rising nearly 2%. 

Technical Analysis: 

(Hang Seng Index, 1-day chart) 

Market Trends: 

• Hang Seng Index (HSI) fell by 1.24%, closing at 17,833.29 points. 
• Hang Seng Tech Index (HSTECH) decreased by 1.87%, closing at 3,916.85 points. 
• Hang Seng China Enterprises Index (HSCEI) lost 1.33%, closing at 6,179.02 points. 

FTSE China A50 Index 

Fundamental Analysis: 

On September 25th, the A-share stock market saw mixed performances in the opening hour, with an initial hour of market fluctuation, followed by a sideways trend.  

The ChiNext Index once again tested the 2,000-point mark. The STAR 50 Index fell by nearly 1%, and the BeiGene 50 Index dropped by over 1%.  

In terms of industry sectors, chemical pharmaceuticals, traditional Chinese medicine, medical services, biopharmaceuticals, and electrical machinery recorded the highest gains, while diversified financials, real estate services, securities, real estate development, energy metals, and aerospace and aviation sectors faced declines.  

Conceptually, weight loss drugs, CRO, innovative drugs, industrial mothership machines, and 3D cameras were relatively active. 

Technical Analysis: 

(SSE Composite Index, 1-day chart) 

Market Trends: 

• Shanghai Composite Index (SHCOMP) fell by 0.39%, closing at 3,120.24 points. 
• Shenzhen Component Index (SZCOMP) decreased by 0.51%, closing at 10,127.33 points.  
• ChiNext Index (CHINEXT) loss 0.4%, closing at 2,005.25 points. 
• SSE STAR Market 50 Index (SSE50) fell by 0.81%, closing at 875.71 points. 

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