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U.S. Stocks Ended Two Days Gains, H.K. Stocks Opened Sharply Lower

U.S. Stocks 

Fundamental Analysis: 

U.S. stocks ended two straight days of gains to close lower on Wednesday, 19th October 2022, as lower Abbott shares and higher U.S. bond yields sapped momentum from the current earnings season and overshadowed a boost from surging Netflix shares.

U.S. 10-year Treasury yields touched their highest in more than 14 years as weak housing market data did little to change expectations that the Federal Reserve will continue to aggressively raise interest rates.

Rising yields weighed heavily on interest-rate-sensitive stocks such as real estate stocks, which fell 2.56% and were the worst-performing S&P sector of the day, with large growth stocks such as Microsoft and Amazon also suffering.

Energy stocks were the only S&P sector to gain, up 2.94%.

Abbott plunged 6.5% after the company reported lower-than-expected growth in international medical device sales.

However, Netflix shares jumped 13.1% to become the best-performing S&P 500 component after the company reported attracting 2.4 million new subscribers worldwide in the third quarter, more than twice the estimate, and the company expects to add 4.5 million subscribers by the end of the year.

U.S. economic activity expanded moderately in recent weeks, although it was flat in some regions and declined in several others, the Fed said Wednesday in its brownbook report, which showed businesses were increasingly pessimistic about the outlook.

The Federal Reserve is widely expected to raise interest rates by 75 basis points for the fourth consecutive time at its November meeting.

Data released on Wednesday by the U.S. Bureau of Labor Statistics showed that U.S. housing construction fell more than expected in September, with the number of new starts of single-family homes falling to the lowest level in more than two years, figures that show the continued impact of the Fed’s interest rate hike on the housing market.

The real estate stock index fell 4.50%, another sector unlikely to help the stock market reverse months of declines, with the three major U.S. indexes still mired in bear markets.

S&P 500 component companies’ third-quarter profit growth estimates rose to 3% from 2.8% on Tuesday, still well below the 11.1% increase forecast in early July, according to Lufthansa data.

Electric car maker Tesla rose 0.84% before reporting earnings after the close, as the market focused on whether weaker demand was starting to take its toll on the auto industry.

Tesla plunged 3.94% after the bell as the company’s third-quarter revenue fell short of expectations.

Technical Analysis:

(Dow 30, 1-hour chart) 

Execution Insight: 

The Dow focuses on the 30416-line today. If the Dow runs steadily above the 30416-line, it will pay attention to the suppression strength of the 31000 and 31265 positions. If the Dow runs steadily below the 30416-line, it will pay attention to the support strength of the 30044 and 29620 positions.

Hong Kong Stocks 

Fundamental Analysis: 

Overnight, the European and American stock market fell, and the China Stock Index hit a new low in more than 9 years.

Hong Kong stocks opened sharply lower today, with the Hang Seng Index (HSI) down 1.7%, the Hang Seng China Enterprises Index (HSCEI) down 1.87%, and the Hang Seng TECH Index (HSTECH) down 3.3%, with all three again brushing new adjusted lows.

On the market, the stocks of returning to Hong Kong have fallen sharply. Li Auto Inc. (2015.HK), Baidu, Inc. (9888.HK), and NIO Inc. (9866.HK) fell by more than 7.5%. ALIBABA (1688.HK), Bilibili Inc. (9626.HK), NetEase, Inc. (9999.HK) etc. followed.

The previously strong biotechnology stocks retraced significantly, new energy auto stocks continue to sink, sporting goods stocks, gambling stocks, domestic banking stocks, photovoltaic stocks, and mobile games stocks all setback.

On the other hand, food and beverage stocks rose against the trend, Vitasoy International Holdings Limited (0345.HK) rose about 4%, while property management stocks and luxury goods stocks rose in part.

Technical Analysis: 

(HK50, 1-hour chart) 

Execution Insight: 

HK50 is focusing on the 16964 front line today. If the HK50 can run above the 16964-line, the suppression of the two positions of 17535 and 18606 will be followed. If the HK50 runs below the first line of 16964, it will follow the support of the 15995 and 15136 positions.

FTSE China A50 Index 

Technical Analysis: 

(FTSE China A50, 1-hour chart) 

Execution Insight: 

FTSE China A50 pays attention to the 12336-line today. If the A50 runs steadily below the 12336-line, then pay attention to the support strength of the two positions of 12135 and 11955. If the A50 runs above the 12336-line, it will open up further upward space. At that time, pay attention to the two positions of 12659 and 12900.

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