Dow Hits Record High, Intel Shares Plunge Nearly 12%

U.S. stocks closed with mixed results on Friday. The Dow Jones inched higher, setting new intraday and closing record highs. However, semiconductor manufacturer Intel saw a substantial drop in its stock price following the release of its financial report.

The December core PCE inflation index in the U.S. came in below 3%, reinforcing the possibility of an economic soft landing and causing markets to scale back expectations of a rate cut by the Federal Reserve in March.

Investor attention is now turning to the Federal Reserve’s monetary policy meeting in January. According to the CME FedWatch tool, the market widely expects the Fed to keep interest rates unchanged during this meeting, but traders have reduced their expectations for a rate cut in March.

Robert Pavlik, Senior Portfolio Manager at Dakota Wealth, commented, “The PCE data is essentially in line with expectations, consistent with what we’ve been hearing about consumer spending contributing to economic growth. These two numbers have both risen compared to last month, but I don’t think it has a significant impact on the overall market.”

U.S. Stock Market

Fundamental Analysis:

In the realm of Chinese concept stocks, most experienced declines with the Nasdaq Golden Dragon China Index dropping by 0.45%.

Weibo faced a drop of over 2%, while Pinduoduo, iQiyi, and NetEase fell by over 1%. Baidu, XPeng Motors, Li Auto,, and Bilibili experienced slight declines. Nio and Tencent Music saw increases of over 1%, while Ctrip and Alibaba had modest gains.

Major technology stocks generally faced declines, with Intel plummeting by nearly 12%. The company reported a 2.6 percentage point decline in Q4 gross margin and provided Q1 performance guidance below expectations.

United Microelectronics and GlobalFoundries dropped by over 5%, ARM and Applied Materials fell by over 3%, and Nvidia, AMD, Apple, and Microsoft saw slight decreases. Netflix increased by over 1%, while Meta and Amazon had modest gains.

Technical Analysis:   

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

Market Trends:

  • Dow Jones rose by 60.30 points, up 0.16%, closing at 38,109.43 points.
  • Nasdaq fell by 55.13 points, down 0.36%, closing at 15,455.36 points.
  • S&P 500 Index decreased by 3.19 points, down 0.07%, closing at 4,890.97 points.

Hong Kong Stock Market

Fundamental Analysis:

All three major Hong Kong indices recorded gains. Among notable movements, Baidu rose by over 3%, Alibaba by nearly 3%, by over 2%, and Meituan dropped by about 0.5%.

In the category of mid-sized stocks, China Communications Construction surged by over 7%, Sinopec rose by nearly 4%, and most real estate stocks increased, with Longfor Group and Yuexiu Property up by over 3%.

Pharmaceutical companies, including WuXi AppTec and WuXi Biologics, experienced declines of over 5%. Semiconductor concept stocks, led by SMIC, fell by over 2%.

The entire Evergrande Group suspended trading, with China Evergrande falling by 20.87%, reaching a new low.

In the morning, the Hong Kong High Court held a hearing on the liquidation of China Evergrande, ultimately ruling for its liquidation.

On June 24, 2022, Jia Sheng Global filed a winding-up petition against China Evergrande with the Hong Kong High Court, involving a debt amount of HKD 862.5 million.

Technical Analysis:  

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) rose by 0.94%, closing at 16,102.02 points.
  • Hang Seng Tech Index (HSTECH) increased by 0.61%, closing at 3,206.02 points.
  • Hang Seng China Enterprises Index (HSCEI.) surged by 1.05%, closing at 5,416.30 points.

FTSE China A50 Index

Fundamental Analysis:

The three major A-share indices opened with mixed results, with the Shanghai Composite oscillating horizontally after opening.

The Shenzhen Component and the ChiNext Index both weakened, with the ChiNext Index falling by over 2%.

Among industry sectors, insurance, banking, engineering consulting services, shipbuilding, power, and liquor industries recorded the highest gains.

Meanwhile, photovoltaic equipment, gaming, household light industry, communication equipment, plastic products, and motors faced the most significant declines.

Themes such as central enterprise reform, liquor, super brands, weight loss drugs, and new stocks were active.

Technical Analysis:

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) rose by 0.3%, closing at 2,918.81 points.
  • Shenzhen Component Index (SZCOMP) dropped by 1.08%, closing at 8,667.73 points.
  • ChiNext Index (CHINEXT) declined by 2.31%, closing at 1,643.67 points.
  • SSE STAR Market 50 Index (SSE50) dropped by 1.5%, closing at 734.89 points.

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