Hong Kong stocks rebound, but the trading volume lacks supporting momentum | Gu Tianhou

On November 27, the weather was mostly clear and very dry. The market anticipated the Federal Reserve would cut interest rates in December. With Thursday being the Thanksgiving holiday in the United States, U.S. stocks continued to rise before the holiday. The Dow Jones Industrial Average opened 83 points higher on Wednesday, with the increase expanding to a maximum of 458 points, closing up 314 points at 47,427; the S&P 500 rose 46 points or 0.69%, closing at 6,812; the Nasdaq rose another 189 points or 0.82%, closing at 23,214. Among major stocks, Nvidia rebounded 1.4% at close, Microsoft rose 1.8%, while Alphabet, the parent company of Google, which had set new highs for three consecutive days, retraced 1.1%. JP Morgan: S&P 500 likely to break 8,000 points According to the money market, the chance of the Federal Reserve cutting interest rates next month is about 80%, with three more cuts expected by the end of next year; in contrast, traders had only bet on a total of three cuts a week ago. JP Morgan strategist Dubravko Lakos-Bujas estimates that the S&P 500 will rise to about 7,500 points by the end of next year, representing an 11% upside from current levels, based on expected earnings growth of 13% to 15% over the next two years. In the best-case scenario, where the Federal Reserve eases policy more than expected, the S&P 500 is expected to break the 8,000 mark. Another strategist at the firm, Mislav Matejka, estimates that driven by corporate earnings growth, the pan-European Stoxx 50 index will rise 14% next year. The yield on U.S. 10-year Treasuries rose by 4.3 basis points to 4.043%; the yield on the more interest-sensitive 2-year Treasuries rose by 4.1 basis points to 3.5%. The U.S. dollar index rose by 0.3% to 99.96, then retreated slightly; the Japanese yen fell 0.44% to 156.74 per dollar. The leading cryptocurrency Bitcoin initially fell but then rose by 3.7%, returning to the $90,000 level, closing at $90,300. South Korean internet giant Naver announced it would acquire the operator of the country's largest cryptocurrency platform, Upbit, Dunamu, for $10.3 billion, to be paid in shares. Spot gold prices rose by as much as 1.03%, reaching $4,173.42 per ounce. Deutsche Bank raised its average gold price forecast for next year from the original $4,000 to $4,450. Hong Kong stocks may have clearer direction after settlement Hong Kong stocks opened 152 points higher yesterday, surpassing the 26,000 mark, with the increase at one point expanding to 241 points, peaking at 26,136. However, the gains gradually narrowed, almost returning to the original level, closing up only 33 points at 25,928. Although it has risen for three consecutive trading days, the 26,000 mark has once again been gained and lost, failing to stabilize above 26,000 at the close. The trading volume was only HKD 207 billion, reflecting a lack of momentum in both buying and selling, which is also the reason why the market has not been able to stabilize above 26,000. Despite the further easing of U.S.-China relations and a renewed rise in interest rate cut expectations, U.S. stocks have continued to rebound recently. Although Hong Kong stocks have followed suit, the trading volume has not matched, resulting in a lack of upward momentum. Additionally, funds are still relatively concentrated in traditional stocks, such as high-dividend and defensive stocks, while technology stocks, which have a higher index weight, have performed mediocrely, causing the Hang Seng Index to struggle to stabilize above the 26,000 mark Capital continues to rotate. If the external market remains favorable, Hong Kong stocks are still expected to challenge the 20-day and 50-day moving averages, specifically the levels of 26,150 to 26,300, and to fill the gap left from the decline on October 18. However, with the year-end approaching, many funds have already begun to close positions early, or will redeploy in January next year. At this stage, investors should maintain a prudent approach and avoid being overly aggressive. As for Hong Kong stocks, they are expected to maintain a range-bound movement in the short term, with significant resistance at 26,300-26,500 and decent support expected at 25,000-25,300. Today is the U.S. Thanksgiving holiday and also the settlement day for November futures, so the market is likely to fluctuate within a narrow range in the early session. After the settlement, there may be a clearer direction. Pay attention to whether the market can stabilize above the 20-day moving average at the level of 26,200, as this will determine the future direction. Gu Tianhou