U.S. Stocks 

Fundamental Analysis: 

U.S. stocks closed sharply higher on Tuesday, 7th February 2023, but trading was volatile as the market digested Fed Chairman Jerome Powell’s comments on how long it may take the Fed to curb inflation.

Powell said 2023 should be the year when inflation falls sharply.

The tech-heavy Nasdaq rallied, and the S&P 500 was boosted by Microsoft news. Microsoft shares rose 1.29%.

Last week, the Federal Reserve raised interest rates by 25 basis points, and the market now expects rates to peak above 5% following strong jobs data on Friday.

Most classes of stocks in the S&P 500 closed higher.

The energy sector was the top gainer as crude oil prices jumped more than 3%, driven by Powell’s speech, and the technology and communication services sectors were among the top gainers.

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: 

Hong Kong stocks opened lower, the Hang Seng Index (HSI) fell 0.07%, the Hang Seng China Enterprises Index (HSCEI) fell 0.18%, the Hang Seng TECH Index (HSTECH) fell 0.43%.

On the market, large technology stocks generally fell, yesterday’s big rise in Baidu, Inc. (9888.HK) fell nearly 3%, NetEase, Inc. (9999.HK), Meituan (3690.HK) are down, Tencent Holdings Limited (0700.HK) rose 1%, Zhihu Inc. (2390.HK) jumped nearly 15%.

Domestic housing stocks and property management stocks fell hand in hand, Apple concept stocks, automotive stocks and other general decline.

On the other hand, handicap stocks continue strong market, IGG Inc (0799.HK), XD Inc. (2400.HK) are up, biotechnology stocks generally rose, and Zai Lab Limited (9688.HK) rose more than 6%.

Hong Kong stocks continued their downward trend this week.

The internal reason for the callback is that the previous positives have basically been fulfilled, and the valuation and risk premium have returned to a reasonable level.

The external factor is that the recent Sino-US relations have resurfaced again, affecting foreign risk appetite.

Domestic economic recovery is still the main line of the market in the medium term, and the logic of the relative dominance of Hong Kong stocks has not changed.

Compared with the previous domestic economic upturn cycle, the attention and flexibility of Hong Kong stocks are usually better than the A-share market, and pro-cyclical industries can record excess returns compared to A-shares.

In addition, Hong Kong stocks are more sensitive than A-shares when U.S. bond yields are falling; the 10-year U.S. bond yield fell by 10bp, Hong Kong stocks rose by an average of 1.1% and A-shares rose by an average of 0.4%.

In the follow-up, the general environment of marginal improvement in overseas liquidity, the tendency of foreign investors to trade China’s recovery has not changed, and is still expected to continue to increase positions in Hong Kong stocks after short-term adjustments.

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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