Global Stock Markets Sway Amid Economic And Geo-Political Forces

Hong Kong Stock Market

The Hong Kong stock market broke out of the low-level oscillation pattern last week, repeatedly testing the support near 17,000 points. Although a short-term oscillation repair structure has been formed, the medium and long-term pressure has not been completely relieved. However, strong US economic data from the external market has fueled expectations of another interest rate hike by the Federal Reserve this year. Coupled with the rise in long-term bond yields, it has led to a decline in the three major US stock indexes. This has also resulted in a significant divergence in the performance of different sectors in the Hong Kong stock market last week, although some sectors showed relatively strong trends, an overall rebound and recovery situation has not been formed. Looking ahead to next week, if the index can continue to rebound and rise, it will have a positive impact on the sustainability of the market rebound. If the low-level oscillation pattern continues, the market will remain divided with limited room for growth.

US Stock Market

Last week, the three major indexes continued to break through the previous lows, with the S&P 500 index approaching the 250-day moving average. In the current environment, both China and the US are issuing large-scale bonds, resulting in significant fluctuations in bond yields. At the same time, the Middle East is not very peaceful, and oil prices are also experiencing significant volatility. The market was originally focused on the third-quarter earnings season of US stocks, but the earnings reports of the main technology giants, which are the main force supporting the index, did not present as many highlights as expected by the market. It is expected that the index may continue to decline next week.

Fixed Income Market

The economic data released in the United States last week continued to remain robust, with new single-family home sales exceeding market expectations and strong consumer spending continuing to support third-quarter GDP.  However, the current regional spread of the Middle East turmoil has raised concerns in the market about the impact on the economy, leading to a continued rise in safe-haven sentiment and preventing further decline in the bond market.  Next week, the Ministry of Finance will continue to issue new bonds to the market, and the bidding results have shown mixed performance last week.  Among them, the demand for the auction of seven-year US Treasury bonds has increased, with a bid rate of 4.908ptc, slightly lower than the previous trading level, but still far above the six-week average. Earlier, the five-year treasury bond auction was lackluster, with a bid rate of 4.899ptc, indicating overall weak investor demand.

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