Investment 6/6/2023

After opening 65 points higher, the Hang Seng Index went up again and again, but once fell in the afternoon, reaching a low of 18,896, down 53 points. After that, the market stopped falling and rebounded, up 174 points at most, to 19,123. In the end, it even closed at the high of the whole day, closing at 19,108, up 158 points. The HS Tech index rose 16 points to close at 3,840. The main board's full-day turnover shrank to HK$99.9 billion. 

With the resolution of the U.S. debt ceiling crisis, the weakening of the U.S. dollar index, and the recovery of the RMB ; and compared with the previous economic data such as the mainland manufacturing PMI and PPI, the Caixin China service industry PMI rose to 57.1 in May, better than market expectations. Diluting the market's pessimism about the mainland's economic recovery in the second quarter, there was capital inflow, so Hong Kong stocks continued to perform well on Monday. The HSI revisited the 19,000 mark, and as expected, fully covered the falling gap (18,930 to 19,046) of the previous Friday. From a technical point of view, the HSI can stabilize and close at 19,300 in the short term, and the market outlook can be more optimistic. Otherwise, the HSI has a high chance of continuing its rampant trend in the future, that is, it will remain in the range of 18,500 to 19,300 points. The market is still divided on the Fed's interest rate hike expectations, and the trend of the US dollar and RMB is believed to influence the direction of the market. 

Morgan Stanley lowered the target price of the HSI from 24,500 points in December this year to 21,500 points in June 2024. In a pessimistic scenario, it is more likely to see 14,300 points. 

Major European stock markets closed lower. British, French and German stocks fell 0.1%, 0.96% and 0.54% respectively. 

After the US debt ceiling crisis came to an end, the latest economic data was not satisfactory. The U.S. ISM Service Industry Purchasing Managers Index (PMI) reported 50.3 in May, worse than market expectations, and hit a new low this year, among which the supplier delivery index fell to 47.7. In addition, factory orders rose only 0.4% month-on-month in April, also worse than expected. Morgan Stanley estimates that S&P 500 earnings per share will fall 16 percent this year, threatening to halt the rally in U.S. stocks. They pointed to downward pressure on equity valuations over the next three months, giving the S&P 500 a year-end target of 3,900, a 9 percent drop from Friday's close. 

On Monday, the Dow Jones Industrial Average opened slightly higher by 8 points and then fell, once falling 209 points to a low of 33,552; the S&P once rose 0.39% to 4,299; the Nasdaq rose by as much as 0.68%. US market closed: Dow fell 199 points to 33,562. The S&P index fell back 8 points to 4,273, but failed to stabilize above 4,292, which means that the cumulative increase from the low point in October last year failed to exceed 20%, and the technical bull market passed by. The Nasdaq slipped 11 points to 13,229.