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U.S. Stocks Slip On Fed Policy, Asian Tech Stocks Decline


U.S. Stocks 

Fundamental Analysis: 

U.S. stocks closed lower on Wednesday, 8th February 2023, paring most of their gains after a strong gain in the previous session, led by technology stocks.

Alphabet brought the biggest drag on the S&P 500 and Nasdaq. The stock plunged 7.7% after its new artificial intelligence chatbot, Bard, provided an incorrect answer in an online ad.

Fed officials said on Wednesday that there will be multiple more rate hikes as the Fed advances its efforts to rein in inflation, adding to the cautious mood in the market. However, no policymakers hinted that January’s strong jobs report could trigger more aggressive policy action.

Fed Governor Waller said inflation appears to continue to slow this year, but the Fed’s fight to return inflation to its 2% target “could be a long battle,” with monetary policy remaining tighter for longer than expected.

Stocks rallied after Fed Chairman Jerome Powell said in a speech at the Economic Club of Washington on Tuesday that interest rates may need to rise to higher levels than expected if the U.S. economy remains strong, but he said he felt the “inflation slowdown” process had already begun.

All major sectors of the S&P 500 were lost, led by the communications services sector, which fell 4.1%, and technology stocks, which fell 1.3%. Utilities stocks are down 1.7%.

Investors have been worried that the Federal Reserve may act aggressively this year after the unexpectedly strong U.S. jobs report released on Friday.

They are also concerned about the mixed earnings reports from U.S. companies this earnings season.

More than half of the S&P 500 component companies have reported results, and the market still expects earnings in the fourth quarter of 2022 to be lower than a year earlier, according to IBES data from Lufthansa.

After the closing bell, shares of entertainment company Disney rose 1.6% after reporting quarterly results. The stock was up 0.1% in the regular trading session.

The market is also digesting President Joe Biden’s State of the Union address on Tuesday evening. Biden supported calls for a tax on corporate stock buybacks.

Technical Analysis:

(Dow 30, 1-hour chart) 

Execution Insight: 

The Dow pays attention to the 34221-line today. If the Dow runs stably above the 34221-line, then pay attention to the suppression strength of the 34477 and 34724 positions.

Hong Kong Stocks 

Fundamental Analysis: 

U.S. stocks fell overnight as ChatGPT concept stocks weakened. The three major indices of Hong Kong stocks opened lower, with Hang Seng Index (HSI) down 0.61%, Hang Seng China Enterprises Index (HSCEI) down 0.73% and Hang Seng TECH Index (HSTECH) down 1.01%.

On the market, most of the large technology stocks fell, Baidu, Inc. (9888.HK) fell nearly 5%, NetEase, Inc. (9999.HK) fell more than 3%, Meituan (3690.HK), JD.com, Inc. (9618.HK), Kuaishou Technology (1024.HK), Tencent Holdings Limited (0700.HK) are down, yesterday’s soaring Zhihu Inc. (2390.HK) opened lower than 8%.

Zhihu Inc. (2390.HK) fell more than 8%, Baidu, Inc. (9888.HK) fell nearly 5%, NetEase, Inc. (9999.HK) fell more than 3%, and Meitu, Inc. (1357.HK) fell more than 2%.

Home appliance stocks, Internet medical stocks, biotechnology stocks, auto stocks, telecommunications stocks generally fell.

On the other hand, Apple concept stocks, AAC Technologies Holdings Inc. (2018.HK) rose 3%, gambling stocks, airline stocks rose partially, MGM China Holdings Limited (2282.HK) rose 1.6%.

On the news, Google Bard AI gave incorrect answers in the demo, Google closed down over 7% yesterday.

Additionally, ChatGPT popular stocks Beijing Haitian Ruisheng Science Technology Ltd. (688787.SS) and CloudWalk Technology Co., Ltd. received regulatory letters from the Shanghai Stock Exchange due to relevant matters.

This comes a day after Hanwang Technology Co.,Ltd. received a letter of concern.

Technical Analysis: 

(HK50, 1-hour chart) 

Execution Insight: 

HK50 pays attention to the 22127-line today. If HK50 can run stably above the 22127-line, then pay attention to the suppression strength of the two positions of 22785 and 23294.

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