U.S. stocks closed lower on Friday, with all three major indices posting weekly losses.
The U.S. January Producer Price Index (PPI) exceeded expectations, confirming alongside CPI data that the Federal Reserve’s battle against inflation is far from over, prompting the market to further reduce bets on an early Fed rate cut.
A Fed official emphasized the need for the Fed to wait for more data before cutting rates.
Three days before the PPI report was released, the higher-than-expected January Consumer Price Index (CPI) in the U.S. raised concerns about the Fed possibly delaying plans to start cutting rates further.
U.S. Treasuries were sold off, with bond yields reaching their highest levels since at least December of last year.
Thomas Barkin, President of the Richmond Fed, stated on Friday that the stronger-than-expected inflation data released earlier in the week highlighted why policymakers want to see more data before cutting rates.
U.S. Stocks
Fundamental Analysis:
Popular Chinese concept stocks showed mixed performance, with the Nasdaq Golden Dragon China Index rising by 0.56%.
XPeng Motors and Li Auto surged over 3%, while JD.com and Bilibili rose by over 2%. TAL Education plunged over 3%, while New Oriental and Gaotu fell by over 1%.
Most large-cap tech stocks declined, with Meta dropping over 2%, and Google and Netflix falling by over 1%. Apple, Microsoft, Amazon, and NVIDIA closed slightly lower.
In the semiconductor sector, Micron Technology and Qualcomm fell by over 2%, while Broadcom, AMD, and Intel fell by over 1%. AMD plummeted nearly 20%, breaching both the $1000 and $900 marks, ending a nine-day consecutive rally.
Technical Analysis:
(S&P 500 Index, 1-day chart)
Market Trends:
- Dow Jones Industrial Average fell by 145.13 points, or 0.37%, to close at 38,627.99.
- Nasdaq Composite fell by 130.52 points, or 0.82%, to close at 15,775.65.
- S&P 500 Index fell by 24.16 points, or 0.48%, to close at 5,005.57.
Hong Kong Stock Market
Fundamental Analysis:
The three major indices in the Hong Kong stock market fluctuated. Among them, tech stocks led the market gains, with JD.com falling nearly 5%, while Xiaomi and Baidu fell by over 3%, and Tencent dropped by over 2%.
Internet healthcare stocks plunged collectively, with JD Health falling over 6%. Sports goods stocks saw significant declines, with Li Ning falling nearly 9%.
Tourism stocks remained weak, with China Duty Free falling over 10%. Real estate stocks fell across the board, with Longfor Group dropping by over 6%.
Coal stocks rose against the trend, with Yanzhou Coal Mining rising nearly 7%.
Oil stocks surged collectively, with CNOOC rising nearly 4%, and PetroChina up by over 3%.
Real estate stocks fell across the board, with Longfor Group dropping by over 6%.
According to a report by UBS citing research from Beike, during the eight days of the Lunar New Year holiday in 50 mainland cities, second-hand housing transactions increased by 70% compared to last year’s Lunar New Year holiday. However, data from E-House showed that from February 2 to 15, new housing transactions in 44 mainland cities decreased by 40% year-on-year.
Technical Analysis:
(Hang Seng Index, 1-day chart)
Market Trends:
- Hang Seng Index (HSI) fell by 1.00% to close at 16,176.15.
- Hang Seng Tech Index (HSTECH) fell by 2.71% to close at 3,252.05.
- Hang Seng China Enterprises Index (HSCEI.) fell by 1.19% to close at 5,492.80.
FTSE China A50 Index
Fundamental Analysis:
On the first trading day of the Year of the Dragon, the three major A-share indices opened higher, and the market fluctuated upward after the opening.
The Shanghai Composite Index once rose by more than 1% and reached 2900 points, and the Shenzhen Component Index and the Growth Enterprise Index also once expanded to 1%. In the morning, the index fell slightly, narrowing its gains.
In the realm of industry sectors, sectors such as education, cultural media, internet services, computer equipment, gaming, communication services, and software development saw notable gains.
Conversely, sectors including securities, energy metals, precious metals, and negative electrode materials experienced declines.
Sectors like insurance, photovoltaic equipment, wind power equipment, and pharmaceutical commerce showed relatively modest gains.
Technical Analysis:
(SSE Composite Index, 1-day chart)
Market Trends:
- Shanghai Composite Index (SHCOMP) rose by 0.9% to close at 2,891.8.
- Shenzhen Component Index (SZCOMP) rose by 0.14% to close at 8,832.97.
- ChiNext Index (CHINEXT) rose by 0.11% to close at 1,728.7.
- SSE STAR Market 50 Index (SSE50) rose by 0.42% to close at 754.67.
Forward-looking Statements
This article contains “forward-looking statements” and may be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “hope”, “intend”, “may”, “might”, “plan”, “potential”, “predict”, “should”, or “will”, or other variations thereon or comparable terminology. However, the absence of such terminology does not mean that a statement is not forward-looking. In particular, statements about the expectations, beliefs, plans, objectives, assumptions, future events, or future performance of Doo Prime will be generally assumed as forward-looking statements.
Doo Prime has provided these forward-looking statements based on all current information available to Doo Prime and Doo Prime’s current expectations, assumptions, estimates, and projections. While Doo Prime believes these expectations, assumptions, estimations, and projections are reasonable, these forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond Doo Prime’s control. Such risks and uncertainties may cause results, performance, or achievements materially different from those expressed or implied by the forward-looking statements.
Doo Prime does not provide any representation or warranty on the reliability, accuracy, or completeness of such statements. Doo Prime is not obliged to provide or release any updates or revisions to any forward-looking statements.
Risk Disclosure
Trading in financial instruments involves high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding the investor’s initial investment could incur within a short period of time. The past performance of a financial instrument is not an indication of its future performance. Investments in certain services should be made on margin or leverage, where relatively small movements in trading prices may have a disproportionately large impact on the client’s investment and the client should therefore be prepared to suffer significant losses when using such trading facilities.
Please ensure you read and fully understand the trading risks of the respective financial instrument before engaging in any transaction with Doo Prime’s trading platforms. You should seek independent professional advice if you do not understand any of the risks disclosed by us herein or any risk associated with the trade and investment of financial instruments. Please refer to Doo Prime’s Client Agreement and Risk Disclosure Statement to learn more.
Disclaimer
While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.
