Investors are closing positions early as trading volume continues to shrink | Gu Tianhou

On December 19th, it was mostly cloudy with some sunshine during the day. The U.S. stock market rebounded overnight, with memory chip manufacturer Micron Tech optimistic about its earnings outlook, causing its stock price to surge over 10%, driving a rebound in tech stocks. On the other hand, U.S. inflation in November was 2.7%, unexpectedly slowing to the lowest level since early 2021, leading the market to continue speculating on interest rate cuts, and the U.S. stock market showed improvement on Thursday. The Dow Jones Industrial Average closed up 65 points or 0.14%, at 47,951; the S&P 500 rose 53 points or 0.79%, at 6,774, ending a four-day decline; the Nasdaq Composite increased by 313 points or 1.38%, at 23,006. Among major stocks, Amazon's stock price rose 2.5%, making it the strongest performer in the Dow, while Nvidia and Tesla closed up 1.9% and 3.5%, respectively. Oracle rebounded by 0.8%, and Apple fluctuated but stabilized. The stock price of Trump Media & Technology Group (DJT), owned by U.S. President Trump, surged by up to 40% after the company agreed to merge with fusion technology company TAE Technologies in an all-stock deal worth over $6 billion, with each party holding half of the new company's equity after the transaction is completed, and plans to build the world's first fusion power plant, pending regulatory approval. No Major Correction Crisis in U.S. Stocks Yet After the U.S. inflation data was released, the yield on the 10-year U.S. Treasury bond fell by 5.3 basis points to 4.096%, while the more interest-sensitive 2-year Treasury yield dropped by 5.64 basis points to 3.4265%. Trump stated at the White House that he would soon announce the Federal Reserve Chair nominee, believing that the nominee would pursue low interest rates. U.S. Treasury Secretary Yellen rebutted any doubts regarding Kevin Hassett, the Director of the White House Council of Economic Advisers, leading the Federal Reserve, calling them "absurd," as Kevin is an outstanding economist with a Ph.D. The U.S. dollar index briefly fell by 0.2% to 98.17. The Bank of Japan is meeting today, and prior to that, the yen rose by 0.27% to 155.28 against the dollar. Currently, the U.S. stock market is in a fluctuating pattern; when it needs to correct, concerns arise about high valuations of AI stocks, high debt levels, and excessive capital expenditures. However, when it rebounds, speculation on interest rate cuts drives the market. In fact, the U.S. stock market is fluctuating, and no major correction crisis has been observed for the time being. Starting to Collect for Medium to Long-Term As for the Hong Kong stock market, it showed mixed performance yesterday. The Hang Seng Index opened over 100 points lower, dropping 207 points to a low of 25,261 in the early session. However, as A-shares performed well, the Hang Seng Index stopped falling and rebounded, gaining 43 points to a high of 25,511. It closed up 29 points at 25,498, with trading volume further shrinking to HKD 162.3 billion, maintaining a quiet market. Next week, there are only two and a half trading days left in the market, and the following week will also have only two and a half trading days, with December 30 being the futures settlement date. As the year-end approaches, trading volume is expected to become increasingly quiet, with limited investor interest in entering the market and funds becoming more cautious. It is anticipated that the market will maintain a fluctuating and slightly weak pattern. In the short term, support is expected at the 24,900-25,000 level, but it will be more challenging to stabilize above 26,000, as trading volume does not support it, and the rebound strength is weak, relying solely on short-covering for the rebound, with resistance expected at 25,900-26,000 The upper level must stabilize at least above the 20-day and 50-day moving averages, which are approximately 25,700-25,750 and 25,950-26,000, respectively, in order to have a chance to reverse the weakness. In terms of sectors, domestic banks and insurance stocks remain relatively strong, while technology stocks have not yet shown signs of reversing weakness. However, in terms of valuation, some individual stocks have returned to reasonable levels and can begin to be collected in stages for medium to long-term investment. Gu Tianhou