On Thursday, the U.S. stock market closed with a significant drop, with the Dow Jones Industrial Average falling by over 370 points and the Nasdaq declining by 1.8%.

The U.S. dollar index reached a 6-month high, and the 10-year Treasury yield hit a 16-year high.

This followed the Federal Reserve’s decision on Wednesday to keep interest rates unchanged but signaled an expected rate hike later this year, along with a commitment to maintain higher rates for an extended period.

Initial jobless claims in the U.S. decreased last week, indicating continued tightness in the labor market.

U.S. Treasury yields, in general, surged, with the 10-year Treasury yield briefly touching 4.4881% and the 2-year Treasury yield rising to 5.1202%, both reaching 16-year highs.

This came after the U.S. Labor Department reported a decrease of 20,000 initial jobless claims last week, hitting a new low since January, raising concerns that this data may influence the Federal Reserve to maintain its rate hike stance.

U.S. Stocks 

Fundamental Analysis: 

FedEx announced its financial results for the first quarter of the 2024 fiscal year, with adjusted earnings per share of $4.55, a 32.2% year-over-year increase, surpassing market expectations of $3.73 per share.

Revenue amounted to $21.7 billion, slightly below the market estimate of $21.8 billion. Additionally, the company raised its adjusted earnings per share guidance for the fiscal year from the previous range of $16.5 – $18.5 to $17 – $18.5. 

Cisco announced its acquisition of cybersecurity software company Splunk for $157 per share in cash, totaling approximately $28 billion.  

After the acquisition is completed, Splunk’s President and CEO, Gary Steele, will join Cisco’s senior leadership team, reporting to Cisco’s Chairman and CEO, Chuck Robbins. 

Regarding Chinese tech stocks, there were mixed movements, with Futu Holdings dropping over 4%, Bilibili down over 3%, and companies like XPeng Motors, Pinduoduo, Baidu, Alibaba, JD.com, NetEase, Full Truck Alliance, Tencent Music, and Weibo falling over 1%. However, NIO saw a slight decrease, while Vipshop Holdings experienced a slight increase. 

Technical Analysis:   

(S&P 500 Index, 1-day chart) 

Market Trends: 

• Dow Jones Industrial Average closed down by 370.76 points, a 1.08% decrease, ending at 34,070.42 points. 
• Nasdaq Composite Index fell by 245.14 points, a 1.82% decline, closing at 13,223.98 points. 
• S&P 500 Index dropped dropped by 72.20 points, a 1.64% decrease, concluding at 4,330.00 points. 

Hong Kong Stocks 

Today, the three major Hong Kong stock indices opened lower but rebounded during the session.  

Core technology stocks performed well, with Kuaishou leading the way with a more than 5% increase.  

Morgan Stanley released a report stating that the company’s management shared its strategic framework for user and content ecosystems, e-commerce, advertising, live streaming, artificial intelligence/technology, local services, and overseas businesses at an investor conference. 

Chinese brokerage stocks saw gains, with CITIC Securities and CICC both rising over 3%.  

The China Securities Association recently released the operating results for securities companies in the first half of 2023.  

During this period, the industry achieved operating income of CNY 224.507 billion and a net profit of CNY 85.050 billion.  

Self-operated businesses were the only segment with positive growth, achieving operating income of CNY 74.817 billion, a significant increase of 74.08% year-on-year, influenced by a low base in the previous period. 

Technical Analysis: 

(Hang Seng Index, 1-day chart) 

Market Trends: 

• Hang Seng Index (HSI) rose by 1.21%, closing at 17,868.68 points. 
• Hang Seng Tech Index (HSTECH) increased by 2.39%, closing at 3,941.24 points. 
• Hang Seng China Enterprises Index (HSCEI) gained 1.53%, closing at 6,192.32 points. 

FTSE China A50 Index 

Fundamental Analysis: 

The A-share market opened this morning and was less affected by the downturn in European and American stock markets.  

The three major indices experienced mixed movements at the opening bell, with the Shanghai Composite Index regaining the 3,100-point mark. Both the Shenzhen Component Index and the ChiNext Index rose by over 1%. 

In terms of industry sectors, a few, such as gaming, communication equipment, cultural media, internet services, and electrical machinery, saw gains, while precious metals, coal, decoration materials, railways, and steel sectors led the declines.  

In thematic trading, concepts like CPO, optical communication modules, AIGC, computing power, ChatGPT, liquid cooling, and mixed reality showed active performance. 

Technical Analysis: 

(SSE Composite Index, 1-day chart) 

Market Trends: 

• Shanghai Composite Index (SHCOMP) rose by 0.77%, closing at 3,108.45 points. 
• Shenzhen Component Index (SZCOMP) increased by 1.23%, closing at 10,104.53 points. 
• ChiNext Index (CHINEXT) gained 1.43%, closing at 1,995.8 points. 
• SSE STAR Market 50 Index (SSE50) rose by 1.66%, closing at 874.71 points. 
  
  

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