Investment 26/4/2024

After opening 57 points lower at 17,144 points, the Hang Seng Index tested the 17,100 point level and was accepted. It once rose 237 points to 17,438 points. It rose 83 points or 0.48% for the whole day to 17,284 points. It rose for 4 consecutive days and accumulated a total increase of 1,060 points. , and hit another high this year; the technology index underperformed, falling 19 points or 0.54% to 3,554 points. Main board transaction volume was HK$119.9 billion. 

Although the Hang Seng Index has failed to stabilize after rising above the 17,000 mark several times this year, the current valuation of Hong Kong stocks is attractive, and many companies have repurchased and increased dividends. Recently, many major banks have also praised Hong Kong stocks. With the potential return of funds, the Hong Kong stock market has strengthened at the bottom, and the rise is expected to be sustainable. In addition, on the index settlement day next week, large investors will actively transfer positions to push up the index. The index is expected to challenge the 250-DMA (17,728), so it is not appropriate to be bearish in the short term.

 European stock markets developed individually, with French and German stocks falling 0.93% and 0.95% respectively. British stocks closed up 0.48%, supported by news of mergers and acquisitions in mining stocks.

 There are some problems with the data just released by the United States: First, GDP growth slowed to only 1.6% in the first quarter of 2024, less than half of the 3.4% in the fourth quarter of 2023. The data was about 50% lower than Goldman Sachs' forecast. But things got even worse. At the same time, the U.S. core PCE price index surged from 2.0% to a staggering 3.7%. This beat expectations of 3.4% and was further evidence that inflation is rising. The U.S. economy is weakening and inflation is rising. For the Fed, this could be the worst possible outcome. What does the Fed do when inflation rises but the economy weakens? If you lower interest rates, inflation will spike. If you raise interest rates, the economy collapses. 

The risk of stagflation has increased, which has dampened investor confidence in the economy heading towards a soft landing. Coupled with the decline in stock prices after technology stocks announced their results, the Dow opened 408 points lower. The decline once expanded to 706 points, reaching a low of 37,754 points. It recovered nearly half of its value at the close. Lost ground; the S&P 500 fell 1.6% at one point; the Nasdaq fell as much as 2.35%.

 At the close of the U.S. market, the Dow Jones Industrial Average dropped 375 points, or 0.98%, to 38,085 points; the S&P Index fell 23 points, or 0.46%, to 5,048 points; and the Nasdaq fell 100 points, or 0.64%, to 15,611 points.

 The U.S. dollar index rose as much as 0.13% to 106, then fell 0.33% to 150.51; the euro once fell 0.2% to $1.0678; the yen once fell 0.26% to 155.75 per dollar, setting a new 34-year low.