Investment 14/12/2023

As the market waits to see the outcome of the Federal Reserve's interest rate meeting, Hong Kong stocks were soft within a narrow range and trading volume was light. The Hang Seng Index opened 62 points lower and then repeatedly found the bottom, falling as much as 229 points and reaching a low of 16,145 points. It closed at 16,228 points, down 145 points or 0.89%. The technology index closed at 3,686 points, down 44 points or 1.18%. The main board's total daily turnover was HK$75.4 billion. 

The U.S. CPI still remains above 3%, falling short of the Federal Reserve's target of 2%. It is still too early to say whether interest rates can be cut in the first quarter of next year. On the other hand, the Central Economic Conference was held in the Mainland. At this stage, it still maintains slogan-style policies without concrete actions, which makes it difficult to bring joy to the Hong Kong stock market. It is expected that the Hang Seng Index will continue to maintain its adjustment pattern and may fall below the 16,000 level again. 

The U.S. dollar index once fell 1.05% to 102.78, the Euro rose 1.05% to $1.09, and the Japanese yen rose as much as 1.92% to 142.66 per dollar. Britain's economic contraction in October heightened expectations for an interest rate cut, but the pound rose 0.58% to $1.2636. 

European stock markets developed individually, with British stocks rising slightly by 0.08%, French and German stocks falling by 0.16% and 0.15% respectively. 

Following the consumer price index (CPI) released recently that was lower than expected, the U.S. producer price index (PPI) released on Wednesday rose 0.9% year-on-year, which was also lower than the 1% increase expected by the market. The Federal Open Market Committee (FOMC) announced at 3 a.m. local time on Thursday that the federal funds target rate remained at 5.25% to 5.5%, marking the third consecutive time on hold, with interest rates remaining at a 22-year high. Policymakers expect a rate cut of 0.75% next year, 0.25% more than their September forecast. Chairman Powell hinted at a press conference after the interest rate meeting that interest rates may have reached a peak. The news spurred a sharp surge in U.S. stocks, with the Dow hitting record highs at the market (37,094) and at the close (37,090). 

At the close of the U.S. stock market, the Dow rose 512 points, or 1.4%, to 37,090 points; the S&P 500 rose 63 points, or 1.37%, to 4,707 points; the Nasdaq rose 200 points, or 1.38%, to 14,733 points.