Last week, Hong Kong stocks generally fell while the NASDAQ rose. Behind the different fates of different indices lies the expectation of economic weakness implied by the seemingly substantially weakening CPI data. Therefore, cyclical indices—the Dow Jones—declined, while the technology and growth-oriented NASDAQ rose, especially the exaggerated gains in AI-related concept stocks.

After undergoing valuation adjustments, Hong Kong stocks recently showed weak fundamentals, including the latest domestic credit and social financing data, indicating that the path to recovery is not easy.

This week, both China and the U.S. will release retail sales data. Domestically, the focus is on whether retail sales can gradually break free from the drag of credit deleveraging, given the high savings rate among Chinese households.

For the U.S., after retail sales weakened rapidly in April, the key question is whether this trend will continue in May. Two consecutive months of weakening consumption data could further confirm the trend of a weakening U.S. economy, which would favor the continuation of the tech and growth-oriented market style.