This week, investors are focusing on Wednesday’s CPI (Consumer Price Index) and Thursday’s PPI (Producer Price Index) inflation data to assess the signals of the Federal Reserve’s policy path and rising recession risks.  

The CPI report, scheduled for release on Wednesday, reflects the inflation conditions following the skipped interest rate hike at the Federal Open Market Committee (FOMC) meeting in June.  

U.S. Treasury Secretary Janet Yellen stated over the weekend that she does not rule out the possibility of an economic recession in the United States and noted that inflation remains high. 

U.S. Stocks 

Fundamental Analysis: 

U.S. stocks closed higher on Monday, with the Dow Jones recording its first gain in the past four trading days. Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, stated, “It is expected that the year-on-year increase in U.S. CPI inflation data, to be released on Wednesday, will decrease from 4% to around 3%, while the month-on-month increase may see some growth. However, the core inflation rate may remain around 5%, which is more sticky.” 

It is expected that S&P 500 constituent companies’ earnings for this quarter will decline by 6.4%, while earnings excluding the energy sector will decline by 0.7%. 

Technical Analysis:    

(S&P 500 Index, 1-day chart) 

Market Trends: 

• The Dow Jones rose by 209.52 points, or 0.62%, to close at 33,944.40 points. 
• The Nasdaq increased by 24.77 points, or 0.18%, to close at 13,685.48 points. 
• The S&P 500 index rose by 10.58 points, or 0.24%, to close at 4,409.53 points.  

Hong Kong Stocks 

Fundamental Analysis: 

Hong Kong stocks opened higher in the morning session, with the Hang Seng Index (HSI) performing the best. After opening higher by 191 points, the HSI briefly narrowed its gains to only 93 points before rebounding. The HSI closed at 18,573.  

There was buying support near the recent low, leading to an expansion of the gains to a high of 18,803, reaching a maximum increase of 324 points. 

In terms of market performance, large technology stocks collectively rose, with Xiaomi Corporation (1810.HK) up 3% and JD.com, Inc. (9618.HK), NetEase, Inc. (9999.HK), and Baidu, Inc. (9888.HK) up over 2%. Meituan (3690.HK), Alibaba Group Holding Limited (9988.HK), and Tencent Holdings Limited (0700.HK) all rose over 1%.  

New energy automobile stocks surged, with NIO Inc. (9866.HK) rising over 12%.  

As for the real estate sector, some policies related to the “16 financial measures” were postponed, leading to a rise in property stocks and property management stocks.  

Pork concept stocks, which rebounded yesterday, generally declined, while stocks related to infant and child products and three major telecom operators experienced a general decline. 

Technical Analysis: 

(Hang Seng Index, 1-day chart) 

Market Trends: 

• The Hang Seng Index rose by 1.53% to close at 18,761.91 points. 
• The Hang Seng Tech Index increased by 2.06%.  
• The Hang Seng China Enterprises Index rose by 1.51%. 

FTSE China A50 Index 

Today, the three major A-share indices opened high but fell into negative territory in the early session. Subsequently, the market showed narrow fluctuations, and the indices rebounded in the morning session.  

The Shenzhen Component Index and the ChiNext Index both rose by 0.5%, while the STAR 50 Index performed well, rising by 0.85%. 

In terms of sector performance, the automobile industry, semiconductor industry, automobile services, automobile components, and computer equipment showed gains, while the photovoltaic equipment, electric power industry, education, gaming, and tourism and hotel industries declined. In terms of themes, storage chips, Kirin batteries, automobile chips, wheel hub motors, AI chips, and satellite communications were active. 

Technical Analysis: 

(SSE Composite Index, 1-day chart) 

Market Trends: 

• The Shanghai Composite Index rose by 0.48% to close at 3,219.2 points. 
• The Shenzhen Component Index rose by 0.57% to close at 11,005.14 points. 
• The ChiNext Index rose by 0.51% to close at 2,210.16 points. 
• The STAR 50 Index rose by 0.85% to close at 1,002.21 points. 

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