《Hedging》Last week, the Hang Seng Index moved within a narrow range, with a weekly fluctuation of only 579 points, slightly down 25 points, and finally closed at 24,186 points. During the downturn, AI hardware stocks declined the most significantly, as the market is mainly concerned that excessive debt issuance by AI companies could lead to a sharp rise in financing costs. If commercial monetization fails to keep pace in the future, it may trigger risks of debt default. In addition, China's memory chip giant ChangXin Technology announced it will launch more advanced chip technology by year-end, sparking market concerns over downward pressure on global chip prices, further worsening the sector.
On the other hand, the latest U.S. inflation data exceeded expectations, further intensifying pressure on the U.S. Federal Reserve to raise interest rates. The U.S. September Consumer Price Index (CPI) rose 3.7% year-on-year, while the Producer Price Index (PPI) surged 6.3% year-on-year, both higher than expected. The core reason behind this round of inflation deterioration lies in the surge in energy prices, with New York crude oil futures breaking above the US$100 per barrel mark last Friday (16th).
Faced with runaway oil prices and persistent inflation, the probability of the U.S. Republican Party losing the House of Representatives in the upcoming midterm elections is sharply rising. The market has begun to worry that once the Democratic Party regains control of Congress, Trump-era policies such as tax cuts, relaxed financial regulation, and the advancement of the AI industry could face significant obstacles. As I have emphasized repeatedly before, during this critical politically sensitive period preceding the U.S. midterm elections, global stock markets are bound to experience severe volatility.
Looking ahead, although signs of stabilization have begun to emerge in the AI hardware sector and investor sentiment has slightly improved, the outlook remains challenging. The final outcome of the U.S. midterm elections, the latest developments in U.S.-Iran relations, and the upcoming earnings reports from leading AI stocks will jointly determine the short-term direction of global stock markets. For Hong Kong stocks, the Hang Seng Index has been moving along a downward channel since early August, showing a weak pattern of "lower highs and lower lows." In the short term, the major resistance level lies around 24,600 points, while the key support level is at 23,700 points. If this support level is lost this week, the Hang Seng Index may further test 23,200 points.
《Sincerity Securities Investment Services Director, Simon Siu》
*Articles published in 《Economic Times》, whether signed or unsigned, represent the personal opinions of the authors and do not reflect the stance of 《Economic Times》. 《Economic Times》plays the role of providing a free speech platform.
On the other hand, the latest U.S. inflation data exceeded expectations, further intensifying pressure on the U.S. Federal Reserve to raise interest rates. The U.S. September Consumer Price Index (CPI) rose 3.7% year-on-year, while the Producer Price Index (PPI) surged 6.3% year-on-year, both higher than expected. The core reason behind this round of inflation deterioration lies in the surge in energy prices, with New York crude oil futures breaking above the US$100 per barrel mark last Friday (16th).
Faced with runaway oil prices and persistent inflation, the probability of the U.S. Republican Party losing the House of Representatives in the upcoming midterm elections is sharply rising. The market has begun to worry that once the Democratic Party regains control of Congress, Trump-era policies such as tax cuts, relaxed financial regulation, and the advancement of the AI industry could face significant obstacles. As I have emphasized repeatedly before, during this critical politically sensitive period preceding the U.S. midterm elections, global stock markets are bound to experience severe volatility.
Looking ahead, although signs of stabilization have begun to emerge in the AI hardware sector and investor sentiment has slightly improved, the outlook remains challenging. The final outcome of the U.S. midterm elections, the latest developments in U.S.-Iran relations, and the upcoming earnings reports from leading AI stocks will jointly determine the short-term direction of global stock markets. For Hong Kong stocks, the Hang Seng Index has been moving along a downward channel since early August, showing a weak pattern of "lower highs and lower lows." In the short term, the major resistance level lies around 24,600 points, while the key support level is at 23,700 points. If this support level is lost this week, the Hang Seng Index may further test 23,200 points.
《Sincerity Securities Investment Services Director, Simon Siu》
*Articles published in 《Economic Times》, whether signed or unsigned, represent the personal opinions of the authors and do not reflect the stance of 《Economic Times》. 《Economic Times》plays the role of providing a free speech platform.