Investment 14/10/2024

Hong Kong stocks rebounded after falling for two consecutive days before the holiday last Thursday.  Benefiting from the People's Bank of China's launch of RMB 500 billion swap facility to rescue the market, and the anticipation of good news from the Ministry of Finance press conference held on Saturday, the Hang Seng Index opened 408 points higher at 21,046 points and continued its upward trend. It once rose 985 points to 21,622 points in the afternoon. After reaching a high level, the upward trend rebounded and closed up 614 points, or 2.97%, at 21,251 points; the technology index rose 95 points, or 2.05%, to 4,736 points.  Main board transaction volume was HK$325.3 billion.

The Hang Seng Index started its upward trend from 16,964 points on September 10 to 23,241 points on October 7. The low of the index last week was 20,190 points, which was close to the midpoint of the entire trend of 20,103 points. The index also rebounded immediately, starting from gold ratio theory, this may mean that the index's upward trend may not be over yet. The 23,241 point is a short-term upward resistance, but it may not be the high in 2024.  The Hang Seng Index is expected to fluctuate between 19,900 and 23,200 points in the short term.  The 10-DMA (21,490) must be recovered to confirm the completion of the adjustment and resume the upward trend.  On the other hand, if the index falls below 20,100 points, it may be a sign that the market is weakening.

 If China's stock market rescue fails, the political consequences will be serious.  If the bull market ends after only one week, all political credibility will be lost.  The central government had already issued 1 trillion RMB  of special treasury bonds in March, of which only about 300 billion RMB was confirmed to have been used. The urgency of increasing the issuance of 2 trillion RMB of special treasury bonds remains to be seen.  The current market expectations are not low, and investors need to manage their expectations well. The amount and timing of overweighting may be variable.

Bill Gross, known as the "Bond King", believes that the bull market in U.S. stocks over the past five years is coming to an end, and the rise will slow down in the future, and investors should expect a decline in returns.  Gross said, "It's not a bear market, but it's not the same bull market anymore. (No bear market, but it's not the same bull market anymore)" In addition, he said investors should pay attention to multiple risks such as high valuations and geopolitical risks. , high U.S. government debt, and the possible emergence of corporate value-added tax, and also mentioned other negative factors such as inflation approaching the Federal Reserve target and artificial intelligence (AI) spending.    He also pointed out that the proportion of cash held by Warren Buffett's investment flagship Berkshire Hathaway reached a record high, which may be a warning signal for the future bumpy trend of the stock market.

 European stock markets performed well, with British, French and German stocks rising by 0.19%, 0.48% and 0.85% respectively.

 The satisfactory performance of major Wall Street banks drove U.S. stocks to rise sharply on Friday. After the Dow opened 53 points higher, the increase expanded to as much as 445 points, reaching 42,899 points, a record high; the S&P 500 also broke through its peak, rising 0.73% to 5,822 points. ; The Nasdaq, which is dominated by technology stocks, once rose 0.51%.  The Dow and S&P closed at record highs.

 U.S. stocks closed at 42,863 points, with the Dow Jones Industrial Average rising 409 points or 0.97%, the S&P 500 rising 35 points or 0.61% to 5,815 points, and the Nasdaq rising 60 points or 0.33% to 18,342 points.

 The U.S. dollar index fell 0.21% to 102.769, the euro rose 0.18% to $1.0954, and the yen fell 0.46% to 149.26 per dollar.