Dow Hits 10th Historic High This Year, S&P Nears 5000 Mark

U.S. stocks closed higher on Wednesday, with the Dow Jones Industrial Average (DJIA) hitting a historic high for the tenth time this year. The S&P 500 index approached the 5000 mark, also reaching a historic high.

NVIDIA stock price broke through $700 for the first time. With over half of the U.S. corporate earnings season complete, investors are evaluating a batch of newly released earnings reports and speeches from several Federal Reserve officials. One Fed official predicts only two to three interest rate cuts this year.

As of now, over half of the fourth-quarter earnings season for U.S. stocks has passed. Investors are shifting their focus to a fresh batch of quarterly performance reports. Uber’s earnings exceeded Wall Street’s expectations, while Yum Brands’ performance fell below analysts’ forecasts.

Despite the corporate earnings showing resilience in the U.S. economy, doubts have spread among people after Federal Reserve Chairman Jerome Powell hinted last week that investors might need to wait longer than expected to see a shift in central bank policy.

U.S. Stock Market

Fundamental Analysis:

Popular Chinese concept stocks mostly declined, with Alibaba dropping over 5%, Bilibili, JD, and XPeng Motors falling over 4%, and iQIYI dropping over 3%.

NIO, Li Auto, and Baidu also declined over 2%, while Tencent Music, Futu Holdings, Vipshop, and Weibo fell over 1%. Pinduoduo saw a rise of over 2%.

Large-cap tech stocks showed mixed performance, with Meta rising over 3%, NVIDIA and Microsoft up over 2%, Tesla up over 1%, and Netflix, Google, Apple, and Amazon seeing slight gains.

However, Meta plunged by over 3%, while Microsoft dropped over 1%, and Netflix and Amazon saw slight declines.

Among notable movers, Alibaba plummeted by over 34%, hitting a new low since November last year, while Enphase Energy surged by over 17%, marking a new high in about a month.

Technical Analysis:   

(S&P 500 Index, 1-day chart)

Market Trends:

  • Dow Jones rose by 156.00 points, a 0.40% increase, closing at 38,677.36 points.
  • Nasdaq increased by 147.65 points, a 0.95% rise, closing at 15,756.64 points.
  • S&P 500 Index gained 40.83 points, up by 0.82%, closing at 4,995.06 points.

Hong Kong Stock Market

Fundamental Analysis:

The three major indices of the Hong Kong stock market initially surged but later retreated.

The overall decline in technology stocks weighed on the market, with Alibaba plunging nearly 7% after its earnings report, while JD and Tencent fell over 1%.

The pharmaceutical sector saw a collective downturn, with WuXi AppTec dropping nearly 8%. However, real estate stocks performed well, with Country Garden Holdings surging by 32%.

Apple-related stocks, led by Goertek Electronics, soared by over 8%. Among semiconductor concept stocks, SMIC advanced by over 8%.

Stocks related to Apple witnessed a collective surge, with Goertek Electronics surging by over 8%. It is reported that Apple is currently developing at least two prototypes of horizontally foldable flip iPhones.

Analysts point out that as the domestic supply chain matures, the price of foldable screen phones is expected to further decline. This will stimulate more consumers to try this form of mobile phone, creating a virtuous cycle.

Suppliers of components with close collaboration with phone manufacturers and a well-positioned industry chain will benefit from this trend.

Technical Analysis:  

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) fell by 0.87%, closing at 15,941.66 points.
  • Hang Seng Tech Index (HSTECH) dropped by 0.34%, closing at 3,179.98 points.
  • Hang Seng China Enterprises Index (HSCEI.) declined by 0.79%, closing at 5,378.49 points.

FTSE China A50 Index

Fundamental Analysis:

The A-share market’s three major indices opened high, with the Shanghai Composite Index rising by over 1% initially, while the ChiNext Index surged by over 3%.

Subsequently, the market slightly retraced before stabilizing, with attention drawn to the rebound of small and micro-cap stocks in the morning session, as evidenced by the CSI 2000 Index surging by over 5%.

In terms of sector performance, semiconductor, internet services, electronic chemicals, medical devices, electrical machinery, aerospace, and aviation sectors led the gains.

Only the banking sector experienced a decline, while sectors such as automotive services, interior decoration, precious metals, insurance, and railways and highways saw relatively modest increases.

Technical Analysis:

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) surged by 1.15%, closing at 2862.31 points.
  • Shenzhen Component Index (SZCOMP) rose by 2.24%, closing at 8903.53 points.
  • ChiNext Index (CHINEXT) increased by 2.16%, closing at 1743.84 points.
  • SSE STAR Market 50 Index (SSE50) gained 1.85%, closing at 757.18 points.

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