U.S. stocks were lower on Friday, 19th August 2022, led by large-cap stocks that generally sank as U.S. Treasury yields rose.
The S&P 500 fell last week after four consecutive weeks of gains.
Amazon, Apple and Microsoft all closed lower, causing the biggest drag on the S&P 500 and Nasdaq.
Rising interest rates tend to be bad for technology and growth stocks, whose valuations depend heavily on future cash flows.
U.S. Treasury yields rose, with the indicator 10-year bond approaching 3%, after Germany reported a record monthly increase in producer prices.
Investors have been weighing how aggressively the Fed needs to raise rates to fight inflation.
All three major stock indexes fell on a weekly basis. The S&P 500 fell about 1.2%. The Nasdaq fell 2.6%, after rising all four weeks. The Dow was down about 0.2%.
After the worst first-half performance since 1970, the S&P 500 has rebounded about 16% from the lows hit in mid-June, helped by stronger-than-expected corporate results and hopes that the economy can avoid recession as the Federal Reserve raises interest rates.
A group of Fed officials said last Thursday that the Fed needs to continue to raise borrowing costs to control inflation, which is at a multi-decade high, although they are divided on the speed of rate hikes and terminal rates.
Since March, the Fed has raised its target overnight rate by 225 basis points to fight the highest inflation in 40 years.
Fed Chairman Jerome Powell will speak on the economic outlook at the annual Global Central Bankers Conference in Jackson Hole, Wyoming, this week, which is likely to be the focus of attention this week.
(Dow 30, 1-hour chart)
The Dow focuses on the 33584-line today. If the Dow runs steadily above the 33584-line, it will pay attention to the suppression strength of the 33811 and 34088 positions. If the Dow runs steadily below the 33584-line, it will pay attention to the support strength of the 33390 and 33233 positions.
Hong Kong Stocks
The interest rate cut exceeded expectations.
Hong Kong stocks opened lower and higher in the morning session, the Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) rose 0.2% and 0.48% respectively, the Hang Seng TECH Index (HSTECH) fell slightly by 0.03%.
The half-day net inflow of southbound capital was HK$2.007 billion, and the market turnover was HK$45.5 billion.
On the market, most of the large technology stocks turned from the decline to rise, NetEase, Inc. (9999.HK) rose more than 3%, Meituan (3690.HK), Baidu, Inc. (9888.HK) rose more than 2%, JD.com, Inc. (9618.HK), Kuaishou Technology (1024.HK), Alibaba Group Holding Limited (9988.HK) are up. Xiaomi Corporation (1810.HK) counter trend fell more than 3%.
The “interest rate cut” was a good stimulus, and domestic housing stocks, property management stocks pull up together, while sporting goods stocks, coal stocks, gold stocks, catering stocks strengthened significantly.
The results of quarterly inspection results were out, and Hansoh Pharmaceutical Group Company Limited (3692.HK), Chow Tai Fook Jewellery Group Limited (1929.HK) was included in the HSI are up.
On the other hand, the recent strong wind power stocks pulled back sharply, Goldwind Science & Technology Co., Ltd. (2208.HK) performance after a heavy drop of nearly 13%. Gas stocks, Apple concept stocks, home appliances stocks, consumer electronics stocks performance waned.
The proposed acquisition of high-quality assets, Gomez Retail resumed trading on a high note and closed down more than 17% at midday.
(HK50, 1-hour chart)
HK50 focuses on the 20467-line today. If HK50 can run stably above the 20467-line, then pay attention to the suppression strength of 21450 and 22127. If HK50 runs below the 20467-line, then pay attention to the support strength of 19517 and 18606.
FTSE China A50 Index
(FTSE China A50, 1-hour chart)
FTSE China A50 focuses on the 13887-line today. If the A50 runs stably below the 13887-line, pay attention to the support strength of the two positions of 13544 and 13157. If the A50 runs above the 13887-line, it will open up further upward space. At that time, focus on the two positions of 14371 and 14695.
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