The Economic Information Daily, September 7—The U.S. trade deficit widened by 13.7% in August, with imports rising 28.4% year-on-year to a record high. Market concerns linger that the widening deficit could exacerbate inflationary pressures. Oil prices showed resilience, with New York crude futures rebounding from intraday lows near $87 to around $90. The yield on the U.S. 10-year Treasury note hovered between 5.25% and 5.30%. Despite this, Wall Street's latest wave of AI investment enthusiasm has not cooled, with tech and AI-related stocks broadly rising overnight. The Nasdaq and S&P 500 both hit new highs, with the Nasdaq gaining 122 points to close at 27,599 and the S&P rising 44 points to 7,818. The Dow Jones Industrial Average rose 253 points to 51,521.
*Mixed performance among Chinese ADRs*
Most Chinese ADRs performed positively; Alibaba fell 1.39% to US$109.26, Pinduoduo rose 0.64% to US$78.40, JD.com gained 0.53% to US$26.50, Baidu edged up 0.07% to US$87.05, Li Auto rose 0.37% to US$10.89, NIO gained 1.75% to US$3.48, XPeng rose 1.70% to US$9.56, Beike climbed 1.58% to US$16.76, Ctrip dropped 1.37% to US$38.26, while GDS Holdings surged 5.94% to US$31.03.
ADR prices relative to Hong Kong closing levels showed mixed movements; Tencent (00700) ADR was 0.11% lower than its Hong Kong counterpart, equivalent to HK$427.70; Xiaomi (01810) ADR was 0.17% lower, equivalent to HK$24.20; Meituan (03690) ADR was 0.32% higher, equivalent to HK$71.00; AIA (01299) ADR was 0.47% lower, equivalent to HK$68.50; HSBC (00005) ADR was 0.24% higher, equivalent to HK$153.20; HKEX (00388) ADR was 0.19% higher, equivalent to HK$380.70.
*Limited profit-taking in bullish zones amid rally, Hang Seng Index holding above 24,000 faces challenges*
Although interest rate futures indicate only about a 20% chance of a rate hike by month-end, the rebound in oil prices and U.S. bond yields from lows suggests market risk appetite remains limited. While U.S. tech stocks managed to rise despite these pressures, Hong Kong stocks, viewed as risk assets, cannot be compared directly to their U.S. counterparts. Resilient bond yields and oil prices could cap gains in Hong Kong equities. The Singapore HS50 futures, a proxy for Hong Kong market expectations, currently trades at 24,278, up 49 points, with a 2-point discount to the spot Hang Seng Index. The opening move in the Hang Seng Index is expected to be within 100 points.
Looking at the distribution of Hang Seng Index bull and bear warrants, bullish zones generally saw profit-taking during yesterday's rally. However, the total net reduction in bullish positions was only 204 contracts. Moreover, the heavily positioned zone between 23,800 and 23,899 saw a further net increase of 405 contracts, bringing the total open interest to 1,178 contracts, suggesting bullish investors have not yet reached their targets. Notably, during yesterday's rally, warrant issuers opened new bullish positions in the 24,000 to 24,199 range, skipping the 23,900 to 23,999 zone and adding approximately 200 points of new open interest. However, this 200-point zone saw only a net increase of 159 contracts, indicating limited reversal pressure. In the short term, the Hang Seng Index is likely to continue focusing on holding above the 24,000 level. (hc)
*Mixed performance among Chinese ADRs*
Most Chinese ADRs performed positively; Alibaba fell 1.39% to US$109.26, Pinduoduo rose 0.64% to US$78.40, JD.com gained 0.53% to US$26.50, Baidu edged up 0.07% to US$87.05, Li Auto rose 0.37% to US$10.89, NIO gained 1.75% to US$3.48, XPeng rose 1.70% to US$9.56, Beike climbed 1.58% to US$16.76, Ctrip dropped 1.37% to US$38.26, while GDS Holdings surged 5.94% to US$31.03.
ADR prices relative to Hong Kong closing levels showed mixed movements; Tencent (00700) ADR was 0.11% lower than its Hong Kong counterpart, equivalent to HK$427.70; Xiaomi (01810) ADR was 0.17% lower, equivalent to HK$24.20; Meituan (03690) ADR was 0.32% higher, equivalent to HK$71.00; AIA (01299) ADR was 0.47% lower, equivalent to HK$68.50; HSBC (00005) ADR was 0.24% higher, equivalent to HK$153.20; HKEX (00388) ADR was 0.19% higher, equivalent to HK$380.70.
*Limited profit-taking in bullish zones amid rally, Hang Seng Index holding above 24,000 faces challenges*
Although interest rate futures indicate only about a 20% chance of a rate hike by month-end, the rebound in oil prices and U.S. bond yields from lows suggests market risk appetite remains limited. While U.S. tech stocks managed to rise despite these pressures, Hong Kong stocks, viewed as risk assets, cannot be compared directly to their U.S. counterparts. Resilient bond yields and oil prices could cap gains in Hong Kong equities. The Singapore HS50 futures, a proxy for Hong Kong market expectations, currently trades at 24,278, up 49 points, with a 2-point discount to the spot Hang Seng Index. The opening move in the Hang Seng Index is expected to be within 100 points.
Looking at the distribution of Hang Seng Index bull and bear warrants, bullish zones generally saw profit-taking during yesterday's rally. However, the total net reduction in bullish positions was only 204 contracts. Moreover, the heavily positioned zone between 23,800 and 23,899 saw a further net increase of 405 contracts, bringing the total open interest to 1,178 contracts, suggesting bullish investors have not yet reached their targets. Notably, during yesterday's rally, warrant issuers opened new bullish positions in the 24,000 to 24,199 range, skipping the 23,900 to 23,999 zone and adding approximately 200 points of new open interest. However, this 200-point zone saw only a net increase of 159 contracts, indicating limited reversal pressure. In the short term, the Hang Seng Index is likely to continue focusing on holding above the 24,000 level. (hc)
