On Wednesday, US indexes closed mixed. October’s U.S. CPI reached a three-month high, boosting expectations of a 25 basis point Fed rate cut in December. Markets remain focused on the makeup of Trump’s cabinet and the post-election outlook for U.S. stocks.
New inflation data showed October CPI rose 2.6% year-on-year, rebounding from September’s 2.4%, marking the first acceleration in six months. This met market expectations and reinforced a gradual Fed rate cut outlook. Following the CPI release, Minneapolis Fed President Neel Kashkari commented on inflation trends, stating that labor market slowdown and economic stagnation are higher risks than inflation overshoot.
The FedWatch tool shows trader expectations for a December rate cut jumped to 82%, up from 58% before the CPI release. Traders are also watching Trump’s cabinet picks, anticipating “America First” policies that could impact trade, security, and the economy.
In individual stocks, Musk’s SpaceX competitor Rocket Lab surged 28.44% after strong Q3 earnings and a new launch contract for its Neutron rocket.
US Stocks
Fundamental Analysis:
Most major tech stocks rose, with Amazon up over 2% and Netflix gaining over 1%, both reaching all-time highs. Microsoft, Apple, and Tesla saw modest gains, while Nvidia and Google fell over 1%, and Meta slipped slightly. Semiconductor and precious metals sectors were mostly down, with AMD dropping more than 6%, Micron Technology and Coeur Mining each down over 4%, and AMD and ARM falling over 3%. Maplebear Inc. (CART) plummeted more than 11%, marking its worst single-day performance since its U.S. IPO. EV maker Rivian surged over 13% as Volkswagen raised its investment in the company to $5.8 billion.
The Nasdaq Golden Dragon China Index fell 1.09%, with most popular Chinese stocks declining. New Oriental dropped over 4%, Up Fintech Holding fell over 3%, and XPeng, Tencent Music, and iQiyi each dropped over 2%, while Zhihu soared more than 13%.
Technical Analysis:
Market Trends:
- Dow Jones: +47.21 points (+0.11%) at 43,958.19
- Nasdaq: -50.68 points (-0.26%) at 19,230.73
- S&P 500: +1.39 points (+0.02%) at 5,985.38
Hong Kong Stock Market
Fundamental Analysis:
Hong Kong’s three major indices continued to decline. Tech stocks mostly fell, with Tencent bucking the trend, rising over 1%, while JD.com dropped more than 4%, Meituan over 2%, and Xiaomi, Baidu, and Alibaba each over 1%. Real estate stocks were broadly weak, with Longfor Group down over 5%. Education stocks saw notable declines, with New Oriental falling nearly 6%. On the other hand, local Hong Kong consumer stocks rose, with Samsonite climbing over 4%.
Tencent shares rose over 1% after its earnings report. Tencent’s third-quarter 2024 financial results showed revenue of 167.193 billion yuan, up 8% year-on-year, gross profit of 88.828 billion yuan, up 16%, and net profit of 59.813 billion yuan, up 33%.
Technical Analysis:
- Hang Seng Index: -0.88%, closing at 19,649.91
- Hang Seng Tech Index: -1.43%, closing at 4,392.02
- Hang Seng China Enterprises Index: -0.98%, closing at 7,060.99
FTSE China A50 Index
Fundamental Analysis:
In early trading, the three main A-share indices collectively adjusted. By midday, the market turnover reached 1.1248 trillion yuan, down 229.7 billion yuan from the previous day, with over 4,000 stocks in the red.
- Leading gains by sector were finance, gaming, and ST (special treatment) stocks. Declines were notable in energy metals, Shanghai SOE reform, and supply and marketing sectors.
- Financial stocks, especially insurance, banking, and securities, saw gains, led by Everbright Securities, China Galaxy Securities, Tianma Group, and China Life Insurance.
- ST stocks continued to rally, with over 20 hitting limit-up, including ST Huijin, *ST Jingfeng, ST Bailing, ST Jiuzhi, ST Huatong, and ST Sansheng.
- The media and gaming sectors were active early on, with Yaoji Technology and Shiji Tianhong hitting limit-up, followed by gains from Tiandi Online and Shenguang Group.
- Shanghai SOE reform stocks led declines, with Haili Group hitting limit-down and Shanghai Nine Hundred, SAIC Motor, and First Medical dropping over 5%.
- Defense stocks also declined, with China Satcom hitting limit-down, and follow-up drops from 6912 and AVIC Optoelectronics.
Technical Analysis:
Market Trends:
- Shanghai Composite Index: -0.32% to 3,428.37
- Shenzhen Component Index: -1.04% to 11,240.64
- ChiNext Index: -1.32% to 2,385.33
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