U.S. Stocks 

Fundamental Analysis: 

U.S. stocks closed higher on Wednesday, 6th July 2022, trading in a choppy session as investors digested the minutes of the Federal Reserve’s latest meeting, looking for new clues about interest rate policy and inflation stalling.

After a disastrous sell-off in global stocks in the first half of the year, nervous investors are closely watching the actions of major central banks trying to assess the impact of aggressive rate hikes on global growth.

Minutes of the Fed’s 14th – 15th June policy meeting showed that deteriorating inflation and fears that the public has lost confidence in the Fed’s ability to make things better prompted policymakers to unanimously support extra-large interest rate hikes and firmly reaffirm their determination to control prices.

Members at the meeting thought a 50- or 75-basis-point rate hike might be appropriate at the next policy meeting later in July.

Prior to the release of the minutes, investors had expected another 75 basis point hike at the 26th –27th July meeting of the Fed. The fact that the minutes show that both 50 basis points and 75 basis points are possible suggests that the Fed acknowledged the impact of the rate hike on the economy.

The minutes reflect that the members are concerned that a rate hike could have a “larger than expected” impact on economic growth. Prior to the release of the minutes, all three major stock indexes showed a sawing trend, and after the release of the minutes, still further sawing above and below the flat, after that, firmly up and finally closed higher.

Eight of the S&P 500’s 11 sectors closed higher, with utilities and technology stocks leading the gains. Energy stocks ran lower, falling 1.7%, as recession fears caused crude oil prices to fall to their lowest in 12 weeks.

Technical Analysis: 

(Dow 30, 1-hour chart) 

Execution Insight: 

The Dow focuses on the 31000-line today. If the Dow runs steadily above the 31000-line, it will pay attention to the suppression strength of the 31291 and 31661 positions. If the Dow runs steadily below the 31000-line, it will pay attention to the support strength of the 30608 and 30350 positions.

Hong Kong Stocks 

Fundamental Analysis: 

In early trading today, Hong Kong stocks opened lower and moved lower. As of midday, the Hang Seng Index (HSI) fell 1.37% to 21,554.32 points, the Hang Seng TECH Index (HSTECH) fell 1.13% to 4,806.56 points, the Hang Seng China Enterprises Index (HSCEI) fell 1.51%, and the Red Chip Index fell 2.07%.

Coal stocks led the decline, with Yankuang Energy Group Company Limited (1171.HK) down more than 9%, China Coal Energy Company Limited (1898.HK) down 7%, and Shougang Fushan Resources Group Limited (0639.HK) down nearly 7%.

Oil stocks were lower collectively, with China Oilfield Services Limited (2883.HK) down 6.74%, CNOOC Limited (0883.HK) down 5.58%, and PetroChina Company Limited (0857.HK) down nearly 5%.

Hong Kong bank stocks fell collectively, HSBC Holdings plc (0005.HK) fell nearly 4%, Bank of China Limited (3988.HK) fell more than 3%, Standard Chartered PLC (2888.HK) fell more than 2%, Hang Seng Bank Limited (0011.HK) fell more than 1%.

Technical Analysis: 

(HK50, 1-hour chart) 

Execution Insight: 

HK50 focuses on the 22127-line today. If HK50 can run stably above the 22127-line, then focus on the suppression strength of 22785 and 23294. If HK50 runs below the 22127-line, then pay attention to the support strength of 21450 and 20467.

FTSE China A50 Index 

Technical Analysis: 

(FTSE China A50, 1-hour chart) 

Execution Insight: 

FTSE China A50 focuses on the 14695-line today. If the A50 runs stably below the 14695-line, it will pay attention to the support strength of the two positions of 14352 and 13970. If the A50 runs above the 14695-line, it will open up further upward space. At that time, pay attention to the two positions of 14985 and 15184.

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