Bank of East Asia expects the Hang Seng Index target to be 30,800 points by the end of this year, estimating three to four rate cuts by the Fed

East Asia Bank's Wealth Management Investment Strategist Eric Wu expects that this year the global market will be relatively loose, with most economies having low interest rates. It is anticipated that the United States will cut interest rates three to four times this year due to the weak performance of the labor market and the continued decline in inflation. Additionally, the current popular candidates for the Federal Reserve Chair are leaning towards a dovish stance. He believes that the Federal Reserve may cut rates as early as the first quarter of this year, but this will depend on economic data.

Regarding the U.S. stock market, it is expected that the S&P 500 Index could reach 7,500 points by the end of this year, with corporate earnings per share increasing by 15% year-on-year. Although AI currently has a high valuation, it is generally believed that there is no obvious bubble at present. Compared to the tech stock boom of the millennium, AI has now become part of the great power competition, supported by policies, and with current U.S. interest rates being lower than at that time, companies find it easier to finance and increase investment.

For Hong Kong and A-shares, East Asia Bank's Wealth Management Senior Investment Strategist Chan Wai-chung targets the Hang Seng Index at 30,800 points by the end of the year, expecting corporate earnings to rise by 13% year-on-year. He focuses on mainland AI, automotive and intelligent driving supply chains, Chinese telecommunications, local real estate rental, and the transportation industry.

He also anticipates a significant improvement in the earnings of Chinese stocks this year. Under the anti-involution policy, the e-commerce price war will ease, and related companies' earnings may rebound in the second half of this year from a low base. The market share of the mainland AI industry will converge towards leading enterprises, and he suggests paying attention to the semiconductor, intelligent driving, and AI cloud and large model sub-industries.

As for the central bank's reduction of various structural monetary policy tool rates by 0.25 percentage points, Chan Wai-chung believes that this measure is not a comprehensive easing but is targeted at certain industries, which may benefit AI and high-end manufacturing, among others