Weekly | US Rate Cut to Boost HK Stocks!
Hong Kong stocks had a rough ride this week, with the $HSI(HSI)$ dropping 2.31%!
Sector-wise, it was mostly red ink with only IT and daily consumption ending in the green. The rest? All down!
On the news, Wednesday brought some good news from the US. Their May CPI rose 3.3% year-on-year, slightly down from the previous and expected 3.4%. Even more impressive, the core CPI, excluding food and energy, hit a three-year low at 3.4%, below the expected 3.5% and previous 3.6%.
Analysts on Wall Street are now expecting two rate cuts this year. US stocks soared, but Hong Kong stocks just gave a shrug.
In the long run, if the US enters a rate-cutting cycle, it'll boost the appeal of Chinese assets.
Domestically, our May CPI rose 0.3% year-on-year, up for the fourth month but weaker than expected. Producer prices (PPI) continued to fall, but the decline narrowed significantly.
Some analysts are expecting the central bank to cut rates to stimulate the economy.
Next Monday, China will release data on retail sales and other economic indicators for May. Expect big market moves! It's worth keeping an eye on.
One thing worth noting: Southbound funds bought HK$27 billion worth of stocks this week. Considering there were only four trading days, that's quite impressive!
Key Events in Hong Kong Stocks This Week
1. New rules on treasury shares took effect on June 11, allowing repurchased shares for equity incentives;
2. Dong Yuhui confessed his aversion to live streaming, sending $Best Buy(BBY)$ 's stock tumbling;
3. Shipping stocks fell sharply after UN resolution on Gaza Strip;
4. $EVERG VEHICLE(00708)$ was ordered to stop production and sales;
5. $MEITUAN-W(03690)$ plans to buy back up to $2 billion of its B-class shares;
6. $Apple(AAPL)$ 's AI launch propelled its stock to the top, boosting the whole supply chain;
7. The incorporation of the “Biosafety Act” into the NDAA was blocked, and pharmaceutical outsourcing stocks soared;
8. Turkey plans to impose 40% tariffs on imported Chinese cars;
9. The EU will impose tariffs on electric cars from China in early July;
10. $QUANTUMPH-P(02228)$ became the first listed company to pass the 18C special technology rules;
11. Us CPI rose 3.3% YoY in May, down slightly from the previous and expected 3.4%.
Three Stocks Worth Attention Among Top Trading HK Stocks This Week
Top 3: $MEITUAN-W(03690)$. The company planned to buy back up to $2 billion of its Class B common shares;
Top 6: $COSCO SHIP HOLD(01919)$ . Dumped after the UN resolution on Gaza eased tensions in the Middle East, giving a reprieve to the Red Sea crisis and shipping contracts;
Top 7: $WUXI BIO(02269)$ . As the US “Biosafety Act” faced obstacles in the legislative process, sending a positive signal to CDMOs like WuXi Biologics.
Next Week's Hong Kong Stock Market Events
1. Next Monday, China will release economic data such as retail sales of consumer goods in May and unemployment rate, which is expected to have a large impact on the stock market;
2. Next Thursday, China will release the loan market quotation rate (LPR), watching for whether there will be a rate cut;
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