U.S. stocks edged lower on Monday. Investors this week are closely watching Federal Reserve Chair Powell’s congressional testimony and Friday’s nonfarm payroll data in hopes of assessing the Fed’s interest rate cut prospects. Atlanta Fed President predicts the Fed will cut rates for the first time in the third quarter. 

JPMorgan warns that the U.S. economic narrative could shift from a “Goldilocks” scenario to stagflation similar to the 1970s, expecting the S&P 500 to fall to 4,200 points by the end of the year. 

David Kostin, Chief U.S. Equity Strategist at Goldman Sachs, wrote in a research report, “The recent surge in U.S. stocks has continued to push up the market share of high-priced stocks in the total U.S. market value, reaching levels comparable to the market frenzy in 2021. But after adjusting for market concentration, the prevalence of extreme valuation high-priced stocks today appears far less widespread than in 2021.” 

U.S. Stocks

Fundamental Analysis: 

Popular Chinese concept stocks mostly declined, with the Nasdaq Golden Dragon China Index falling by 3.97%.  

Li Auto fell by over 13%, Weibo by over 9%, Xpeng Motors by over 8%, NIO and Vipshop by over 7%, JD.com and iQiyi by over 4%, Pinduoduo, Alibaba, and Baidu by over 3%, Tencent Music by over 2%, and NetEase slightly down. Bilibili rose by over 3%, and Futu Holdings saw a slight increase. 

Large-cap tech stocks showed mixed performance, with Tesla dropping by over 7%, Google by nearly 3%, Apple by over 2.50%, and Meta, Amazon, Netflix, and Microsoft following suit.  

Some artificial intelligence concept stocks led the gains, with AMD surging by over 18% and reaching a historic high.  

S&P Dow Jones Indices announced the inclusion of AMD in the S&P 500 index. Intel rose by over 4%, and Nvidia rose by over 3%, also hitting historic highs. 

Technical Analysis: 

(S&P 500 Index, 1-day chart) 

Market Trends: 

• Nasdaq fell by 67.43 points, or 0.41%, to close at 16,207.51 points. 
• Dow Jones Industrial Average fell by 97.55 points, or 0.25%, to close at 38,989.83 points. 
• S&P 500 index fell by 6.13 points, or 0.12%, to close at 5,130.95 points. 

Hong Kong Stock Market

Fundamental Analysis: 

All three major indices of the Hong Kong stock market collectively declined. 

Technology and internet-related stocks led the market decline, with JD.com falling by nearly 6%, and Baidu, Meituan, and NetEase falling by nearly 4%.  

Real estate stocks generally fell, with Country Garden falling by over 5% and China Vanke by over 3%.  

Automotive stocks continued to decline, with Leap Motor falling by over 5%. 

The biopharmaceutical sector saw the largest declines, with Tencent Biomedical-B falling by over 24%.  

International gold prices hit new highs, and gold stocks rose against the trend, with Shandong Gold rising by over 3%. 

Gold stocks rose against the trend, with Shandong Gold rising by over 3%. In terms of news, gold stocks benefited from the continued strength of international gold prices.  

As of yesterday’s close, COMEX April gold futures closed up 1.46% at $2126.3 per ounce. This price level not only refreshed the highest record of the contract since its establishment in 1974, but also marked the second consecutive trading day that gold closed at a historical peak. 

Technical Analysis: 

(Hang Seng Index, 1-day chart) 

Market Trends: 

• Hang Seng Index (HSI) fell by 1.95%, closing at 16,272.77 points. 
• Hang Seng Tech Index (HSTECH) fell by 3.18%, closing at 3,364.16 points. 
• Hang Seng China Enterprises Index (HSCEI.) fell by 1.83%, closing at 5,608.44 points. 

FTSE China A50 Index

Fundamental Analysis: 

The three major indices of the A-share market opened lower, with the market shaking and rebounding after the opening.  

The three major indices turned red one after another in the morning and recorded small gains collectively. 

In terms of industry sectors, automobile manufacturing, aerospace, precious metals, tourism hotels, and banks led the gains, while medical services, power equipment, energy metals, household light industry, and batteries led the declines.  

Themes such as liquid-cooled servers, CPO concepts, optical communication modules, CRO, and computing power concepts remained active. 

Technical Analysis:  

(SSE Composite Index, 1-day chart) 

Market Trends: 

• Shanghai Composite Index (SHCOMP) rose by 0.26%, closing at 3,047.20 points. 
• Shenzhen Component Index (SZCOMP) rose by 0.05%, closing at 9,443.01 points. 
• ChiNext Index (CHINEXT) rose by 0.42%, closing at 1,842.45 points. 
• SSE Sci-Tech Innovation 50 Index rose by 0.53%, closing at 822.84 points. 

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