Many fluctuations in the stock market are related to the liquidity provided by the Federal Reserve. If the pace of cuts is faster, it also means that interest rate increases will be faster. Neither of these two situations is good for the stock market.
The impact on growth stocks, especially technology stocks, will be huge. The Nasdaq, which is dominated by technology stocks, is currently only 5% from its all-time high and may experience a sharp decline. Hence, the market will tilt toward value stocks. This backdrop bodes well for companies that have benefited from interest rate increases, have pricing power, and pay dividends.
Against the background of inflation, underperforming utility companies and consumer goods companies, which are known for their dividend payouts, may experience strong increases.
Today, we pay attention to the 34477 line. Once the Dow reaches above the 34477 line, it will open up further upward revision. At that time, pay attention to the suppression strength of the 34724 and 34990 positions above. Then, focus on the support of the 33811 and 33584 lines below.
Hong Kong Stocks
The Hong Kong stock market suffered a heavy fall on the first trading day after the holiday. As of 12 pm, the Hang Seng Index closed down 2.25% at 24,022.64 points.
Meanwhile, the pharmaceutical technology sector fell sharply, while tourism and aviation stocks rose sharply. Data shows that recently, tens of billions of funds are continuously bottoming out. The pharmaceutical technology sector tumbled heavily, while tourism and aviation stocks rose sharply against the trend.
On the other hand, the Hang Seng Technology Index fell by 1.95%. Among the constituent stocks, China Literature fell by more than 5%; Ali Health and Sunny Optical Technology fell by more than 4%; and Xiaomi, Meituan, and NetEase fell by more than 3%.
On HK50 today, we pay attention to the support of the 24469 line. Once the buy order is obtained, then focus on the suppression strength of the two positions of 25160 and 25816 above. If HK50 falls below the 24469 line, it will open up further downward revision.
FTSE China A50 Index
On A50, pay attention to the 15184 line today. If A50 is above the 15184 line, it will remain as a bullish trend. Then, pay attention to the support of the 14669 line below.
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