A Week In Review: Hong Kong And US Stock Markets Show Signs Of Recovery, US Fixed Income Market Sees Demand For Safe-Haven Assets

Hong Kong Stock Market

The performance of Hong Kong stocks last week was first high and then low. Under the influence of the multiple policies from the Securities Regulatory Commission and the People’s Bank of China, it still brought a certain positive stimulus to the market. Eventually, the HSI rebounded for the second week and returned to above 18,000 points. However, last week's Hong Kong stock market was also the settlement week of the futures index. Under this influence, the performance of the market sector and individual stocks is relatively repeated, and it is difficult to form a continuous capital intervention and trend. The overall trading volume has also remained relatively mild, which cannot pry the enthusiasm of the market. Looking forward to this week, it is needed to pay attention to the performance at the index level. If we fall below the five antennas, it will continue to put pressure on the market performance. If it stands at the level of 18500-18600 points, it will continue the correction trend, and its impact on the market will be relatively positive.

US Stock Market

Last week, the three major indexes of the US stock market experienced a continuous decline in mid-August, and then rebounded in shock. The Nasdaq returned to above 14,000 in one fell swoop. Supporting the upward trend of the index is mainly the second-quarter results of technology companies that exceeded expectations, such as Nvidia NVDA. At the same time, the weak economic data in the United States eased the expectations of interest rate hikes in November, which led to optimism in the short term. For example, GDP growth to 2.1% in the second quarter was actually a downward revision data. Looking forward to next week, in the short term, when the US economic data slows down but does not significantly deteriorate, and corporate profits have not declined, the market's expectations that the Federal Reserve may stop raising interest rates are expected to push up the market's optimism and clarity and continue to drive the index upward.

US Fixed Income Market

Signs of accelerated economic cooling may be one of the driving factors for the recovery in demand for safe-haven assets, and the US Treasury market rebounded last week. Among them, the initial value of the US manufacturing PMI in August was 47, which was lower than the expected and previous value of 49. New manufacturing orders and new export orders fell, and raw material inventories also fell. The initial PMI of the service industry was 51, lower than the previous value of 52.3 and the expected value of 52.2. New orders for the service industry fell below the rise and fall line. In terms of employment data, ADP employment in the United States increased by 177,000 in August, significantly lower than the previous value of 371,000 and lower than the expected 195,000. These data reflect that since the third quarter, due to the impact of high interest rates, US consumer confidence has declined, service consumer demand has contracted, and the cooling of employment data has reduced market expectations for Fed tightening. In terms of term structure, the week's yield curve has flattened out in a bull market, and short-term debt yields have fallen sharply.

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