U.S. Stocks 

Fundamental Analysis: 

U.S. stocks closed sharply higher on Tuesday, 25th October 2022 as weak economic data hinted that the Federal Reserve’s aggressive policies are taking effect, while falling yields on index U.S. bonds boosted the rally.

The three major U.S. stock indexes rose for a third straight session, with the market-leading giant stocks providing the most upside momentum.

The S&P 500 rebounded about 8% from its closing low on 12th October 2022.

Data released on Tuesday showed a slowdown in year-over-year gains in U.S. home prices and weakening consumer confidence.

Such signs of economic weakness, which usually do not support risk appetite, provide a rationale for a possible softening of the Federal Reserve’s hawkish attitude.

Of the 11 major sectors in the S&P 500, all but energy stocks rose, with real estate stocks posting the largest percentage gains.

The third quarter earnings season is in full swing, with 129 of the S&P 500 component companies having reported earnings.

According to Lufthansa, 74% of them exceeded market expectations. Total earnings growth for S&P 500 constituents is now expected to be 3.3%, down from the 4.5% forecast earlier this month.

Coca-Cola rose 2.4% after the company raised its revenue and profit forecasts, citing steady demand.

General Motors rose 3.6% after reporting solid results and confirming earnings estimates.

Among decliners, aerospace company Raytheon posted nearly 5% annual revenue growth, but its shares fell 1.5% as the company lowered its sales forecast.

Shares of Google parent Alphabet Inc fell 6% in after-hours trading as the company missed quarterly revenue estimates.

Microsoft fell more than 2% in after-hours trading despite beating quarterly revenue estimates.

The ratio of the number of up and down stocks on the New York Stock Exchange was 5.35:1; the Nasdaq exchange was 3.67:1.

Technical Analysis:

(Dow 30, 1-hour chart) 

Execution Insight: 

The Dow focuses on the 31590-line today. If the Dow runs steadily above the 31590-line, it will pay attention to the suppression strength of the 32038 and 32363 positions. If the Dow runs steadily below the 31590-line, it will pay attention to the support strength of the 31300 and 31000 positions.

Hong Kong Stocks 

Fundamental Analysis: 

Overnight, the U.S. dollar index took a big dive, the European and American stock and bond markets rose in tandem, and Chinese stocks also rebounded simultaneously.

This morning, the main indexes of Hong Kong stocks opened slightly lower, the Hang Seng Index (HSI) fell 0.46% to 15096.32 points.

Hang Seng TECH Index (HSTECH) fell 0.73% to 2863.73 points and the Hang Seng China Enterprises Index (HSCEI) fell 0.65% to 5146.67 points.

On the market, the gambling stocks continue to fall, beer stocks, domestic insurance stocks, power stocks, gas stocks generally fell, China Resources Beer (Holdings) Company Limited (0291.HK) opened lower than 5%.

Chinese stocks returning back to Hong Kong are strong, NIO Inc. (9866.HK), XPeng Inc. (9868.HK), New Oriental Education & Technology Group Inc. (9901.HK) best performance, Li Auto Inc. (2015.HK), motor home and most of the rise.

Auto stocks strengthened significantly, Chinese brokerage stocks Guangfa Securities opened nearly 9% higher.

According to brokerage China statistics, on 25th October 2022, southbound funds flowed into Hong Kong stocks with a net inflow of HK$6.532 billion, a net inflow of HK$53.628 billion this month, the highest monthly value since February 2021.

The main inflow of southbound funds into Hong Kong stocks is institutional funds, such as ETFs. from the scale of mainland ETF products tracking the Hong Kong market, in the net value growth rate continues to decline, the funds continue to net inflow, the overall trend of “the more down the more buy”.

From an overall perspective, in the short term, factors such as the direction of the Federal Reserve’s monetary policy and Sino-US relations may still cause disturbance to the price and valuation level of overseas Chinese stocks. In the medium to long term, the price pivot is determined by the future development prospects of the industry and the performance fundamentals of listed companies.

Technical Analysis: 

(HK50, 1-hour chart) 

Execution Insight: 

HK50 focuses on the 15995-line today. If HK50 can run stably above the 15995-line, then focus on the suppression strength of the 16964 and 17535 positions. If the HK50 runs below the 15995-line, then pay attention to the support strength of the 15136 and 14309 positions.

FTSE China A50 Index 

Technical Analysis: 

(FTSE China A50, 1-hour chart) 

Execution Insight: 

FTSE China A50 focuses on the 12135-line today. If the A50 runs stably below the 12135-line, pay attention to the support strength of the two positions of 11690 and 11423. If the A50 runs above the 12135-line, it will open up further upward space. At that time, pay attention to the two positions of 12336 and 12659.

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