Investment 18/12/2023

Hong Kong stocks continued to rebound in anticipation of US interest rates peaking and falling, the RMB strengthening in recent days, and the People's Bank of China releasing funds through the medium-term lending facility. The Hang Seng Index opened 208 points higher and rose as much as 562 points. However, it was limited by the resistance of 17,000 points. It reached a high of 16,964 points and then retreated. It closed at 16,792 points, up 390 points or 2.38%. The technology index closed at 3,780 points, up 82 points or 2.22%. The main board's total daily turnover was HK$136.2 billion, the highest in the past two weeks. 

Hong Kong stocks fell first and then rebounded last week, ending two consecutive weeks of decline. The Hang Seng Index rose 457 points, or 2.8%, for the whole week. The tech Index rose 74 points, or 2%, for the week. 

Last week, the Hang Seng Index fully covered the large rising gap in November last year (16,138 to 16,829) and started to rebound. On Friday, it advanced into the resistance zone of 16,800 to 17,000 points. It was controlled by the 20-DMA (16,928). The short-term material needs to consolidate and should stay at the 10-DMA  (16,411) support, otherwise the selling pressure will be difficult to subside. The Hong Kong stock market currently faces great resistance, and it is difficult to surpass the 18,000-point mark.

 Afterwards, the U.S. dollar rebounded as much as 0.66% to 102.64 over the weekend; the Euro zone's comprehensive PMI in December showed economic activity contracted for seven consecutive months, and the Euro once fell 0.96% to US$1.0889; the Japanese yen once fell 0.41% to 142.47 per dollar . 

European stock markets ended mixed, with British stocks down 0.95%, German stocks almost flat, and French stocks up 0.28%. 

U.S. Federal Reserve officials have downplayed market expectations for a rate cut, with President John Williams saying on Friday that a rate cut is not really being discussed. The interest rates on short-term bonds have risen from low levels. Friday is the "Quadruple witching day" for U.S. stocks, which is the settlement day for futures and options on indices and individual stocks. According to past records, market conditions are generally more volatile. 

After the Dow opened 53 points lower, the decline once expanded to a maximum of 156 points, reaching a low of 37,092 points. In the end, it turned up 99 points, reaching a high of 37,347 points, setting a new historical high in the market.

 At the close of U.S. stocks, the Dow still rose 56 points, or 0.15%, to 37,305 points; the S&P 500 index fell slightly, 0.01%, to 4,719 points; the Nasdaq, which is dominated by technology stocks, rose 52 points, or 0.35%, to 14,813 points. Cumulatively for the whole week, the Dow rose 2.9%, the S&P 500 rose 2.5%, and the Nasdaq climbed 2.9%. The three major indexes all recorded their seventh consecutive week of gains. The S&P 500 has the longest consecutive rising week since 2017. The S&P 500 is currently on a rise. It is still less than 2% below its historical high.