A Week In Review: Varied Performances In Hong Kong And US Markets

Hong Kong Stock Market

After several consecutive weeks of shocks, Hong Kong stocks weakened significantly last week, falling below the key support level of 17,000 points. Although the US stock market has ended raising interest rates for the Federal Reserve, and even expectations of interest rate cuts will start to heat up next year, so that US stocks continue to strengthen. However, it has no impact on Hong Kong stocks. In addition, the earnings reports of heavyweights have fallen short of expectations, which has further weakened the Hong Kong stock market. Looking forward to this week, Hong Kong stocks still have a great chance to challenge low levels, and the depth of the downturn is unknown. Under weak pressure, the market has few trading opportunities, and there are only individual stocks.

US Stock Market

After the major index closed continuously on last Wednesday, it started a wave of shocks at a high level. The Federal Reserve said at its November interest rate meeting that it will act cautiously in the future, which has continued to strengthen the market's perception that it will soon end its interest rate hike expectations. The United States 10-year-bond-yield continues to fall below 4.5%; The United States 2-year bond yield remained stable above 4.9%. Interest rate hike expectations have fallen rapidly, and interest rate cuts are expected to rise under the active predictions of major banks. Important data such as the annualized revised data of GDP in the third quarter of the United States and the Core PCE Price Index in October show that inflation growth has continued to decline. Although the US economic growth has slowed down, it is far from the point of recession. This may determine whether the Federal Reserve will raise interest rates at the last meeting of interest rates at the end of this year.

Fixed Income Market

This week, the Beige Book released that the expectations of cooling the US economy are being fulfilled progressively which indicating that the price pressures are easing.

The lag effect brought by the high interest rate environment is gradually being reflected, and data support is given to market interest rate cut expectations. In this regard, the response of the bond market this week is obvious, and government bonds have rebounded in each cycle. Among them, short-term bonds that are sensitive to monetary policy have increased even more. However, later last week, Fed officials reiterated their cautious stance, cooling the expectations for interest rate cuts next year, driving bond market gains to narrow.

Author: Eddid Securities and Futures Research Department

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