U.S. Stocks 

Fundamental Analysis: 

U.S. stocks closed lower on Tuesday, 12th July 2022, with buyers leaving the market amid growing signs of recession ahead of inflation data. 

Earlier in the session, the three major stock indexes fluctuated slightly and below flat, but fell sharply later in the day, with the Labor Department’s consumer price report due on Wednesday and earnings reports from big banks due later this week.

There are concerns that the Fed’s overly aggressive moves to rein in decades-high inflation could push the economy to the brink of recession.

Concerns are heightened by the inversion of the two-year/10-year U.S. bond yield curve to the greatest extent since at least March 2010, a potential signal of near-term risks and economic contraction.

The market expects the Fed to raise the key federal funds target rate by 75 basis points at the end of its July policy meeting, which would be the third consecutive rate hike by the Fed.

The second quarter earnings season will kick off later this week, when JPMorgan Chase, Morgan Stanley, Citigroup and Wells Fargo will release results.

As of Friday, analysts expect S&P 500 component companies to report 5.7% year-over-year earnings growth in the second quarter, down from 6.8% forecast at the beginning of the quarter, according to Refinitiv data.

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: 

The three major indexes of Hong Kong stocks rebounded collectively in the morning session.

The Hang Seng Index (HSI) rose 0.62% and returned to 21,000 points during the session. The Hang Seng TECH Index (HSTECH) rose 1.75% to regain 4,600 points.

The southbound capital inflow was HK$2.113 billion in half a day, and the market turnover was HK$52.7 billion.

On the market, technology stocks that have fallen continuously rose across the board. JD.com, Inc. (9618.HK) rose 4.6%, Meituan (3690.HK) rose 3%, NetEase, Inc. (9999.HK), Kuaishou Technology (1024.HK), Xiaomi Corporation (1810.HK), and Baidu, Inc. (9888.HK) all rose, and Tencent Holdings Limited (0700.HK) fell slightly.

Power grid investment may increase, and power equipment stocks rose sharply. The analysis indicates that short-term adjustments do not change the logic of recovery, and the catering stocks will rise better.

The number of international flights is expected to gradually increase, and airline stocks will rise together.

On the other hand, Chinese medicine stocks fell sharply, with China Traditional Chinese Medicine Holdings Co. Limited (0570.HK) profit warning fell 18%, the worst performance.

Also, look out for the spread of the risk of unfinished real estate supply suspension, Chinese real estate stocks and property management stocks tumbled.

On the other hand, commodities continued to cool down, copper, aluminum and other non-ferrous metals sectors fell sharply.

Four new stocks were listed today. Tianqi Lithium fell 3.5% in the morning session on the first day of listing, MINISO fell 2.75%, Huzhou Gas fell nearly 4%, and Noah Holdings fell 4.6%. Catering is strong, and the analysis refers to short-term adjustments without changing the logic of recovery.

Yesterday, optional consumption sectors such as hotels, restaurants, and automobiles continued their collective callback trend. Some institutions are still optimistic about its recovery logic, and have already ambush it in advance.

A number of industry insiders said that with the gradual recovery of the economy, the consumer sector is expected to usher in a double-click of Davis, and the follow-up needs to pay close attention to the strength of recovery and the flow of foreign capital, and adjust positions flexibly.

CITIC Construction Investment pointed out that in the second half of the year, as economic activities begin to climb, the recovery of the catering industry chain will accelerate, and the banquet consumption scene will gradually return to normal.

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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