--- title: "The Hong Kong stock market may have bottomed out and rebounded or is experiencing a dead cat bounce; further observation is needed｜Gu Tianhou" type: "News" locale: "en" url: "https://longbridge.com/en/news/292008608.md" description: "U.S. stocks fell on Tuesday due to a semiconductor sell-off and a rebound in oil prices, with the Dow, S&P, and Nasdaq all declining. China's DeepSeek developed AI chips, causing fluctuations in NVIDIA; Samsung's poor performance dragged down Micron and Intel. SpaceX was included in the NASDAQ-100 but saw its stock price drop, with Morgan Stanley and others giving it a buy rating. Amazon plans to issue $25 billion in bonds to support AI development, while Microsoft and Meta rose. U.S. bond yields increased, and New York Federal Reserve President Williams expects inflation to ease, alleviating rate hike pressures" datetime: "2026-07-08T03:42:43.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/292008608.md) - [en](https://longbridge.com/en/news/292008608.md) - [zh-HK](https://longbridge.com/zh-HK/news/292008608.md) --- # The Hong Kong stock market may have bottomed out and rebounded or is experiencing a dead cat bounce; further observation is needed｜Gu Tianhou On July 8, it was generally cloudy with occasional showers and thunderstorms, with heavier rain in some areas at first. The US stock market adjusted yesterday, with semiconductor stocks being sold off and international oil prices rebounding, putting pressure on the US market on Tuesday. The Dow opened up 48 points, with the gain expanding to a maximum of 233 points, reaching a new intraday record of 53,289, but then turned from gains to losses, fluctuating down 281 points to a low of 52,774 points. At the close of the US market, the Dow fell 130 points or 0.25%, closing at 52,925; the S&P 500 dropped 33 points or 0.45%, closing at 7,503; and the Nasdaq fell 302 points or 1.16%, closing at 25,818. According to Reuters, China's DeepSeek is developing its own artificial intelligence (AI) chips, causing Nvidia (NVDA) stock to drop 2.3%, but it closed up 0.7%. South Korea's Samsung Electronics reported preliminary results that fell short of market expectations, with Micron Technology (MU) and Intel (INTC) dropping 4.7% and 9.7%, respectively. ## Several Major Banks Begin Tracking SpaceX SpaceX has officially entered the NASDAQ-100 index, with its stock price falling 6.8%. However, several major banks have begun tracking SpaceX, giving it a "buy" investment rating, with an average 12-month target price of $236, indicating a 47% upside from the current price. Among them, Morgan Stanley is more optimistic, stating that Neoclouds will be the company's largest business in the short term, with future growth mainly driven by demand for AI services, setting a target price of $300. In other heavyweight stocks, Amazon is reportedly planning to issue bonds to raise $25 billion to fund AI business development, with its stock rising 0.8%, Microsoft up 0.5%, and Meta increasing by 2.4%. The yield on the US 10-year Treasury bond rose by 7.4 basis points to 4.553%; the yield on the more interest-sensitive 2-year Treasury bond rose by 6 basis points to 4.185%. New York Federal Reserve Bank President Williams, in an interview with Fox Business, predicted that falling energy prices would drive overall US inflation down in the coming months, reiterating that the authorities' policies are in a good position, reflecting that the pressure for interest rate hikes is gradually easing. The US dollar index rose by 0.28% to 101.13, while the yen appreciated by 0.26% to 161.67 per dollar. The cryptocurrency "king" Bitcoin fell by 3.1% to $62,623 but later stabilized. ## Global Fund Reallocation After Half-Year End Hong Kong stocks adjusted yesterday, with the Hang Seng Index opening down 47 points, rising 204 points to a high of 23,820, but faced resistance after touching the 20-day line. It then turned from gains to losses, dropping 218 points to a low of 23,398, before narrowing the decline to 119 points, closing at 23,496, with a turnover of HKD 319.7 billion. As expected, the rebound path for Hong Kong stocks is not smooth, with the 20-day line encountering resistance. Although the rebound faced obstacles, the Hang Seng Index has rebounded over a thousand points from the June low of 22,518. Currently, there is a divergence in the market regarding whether Hong Kong stocks have completed adjustments during the "five poor and six dead" months, successfully finding a low in June and embarking on a mid-term upward trend, or if it is merely a technical rebound from severe overselling. In the first half of the year, Hong Kong stocks began to decline from the over four-year high of 28,056 in January, with a maximum cumulative drop of 5,538 points or 19.74%. Technically, it is extremely oversold, coinciding with the easing of the US-Iran conflict and the decline in international oil prices. Additionally, after the half-year end, global funds are reallocating assets, with some funds beginning to flow into the severely underweighted Hong Kong stocks, becoming a key external catalyst At the same time, listed companies have started to actively repurchase shares. Taking Tencent (700) as an example, there was a repurchase every trading day in June, involving a total of HKD 9.774 billion, doubling from HKD 4.513 billion in May, with the cumulative repurchase amount for the year exceeding HKD 25 billion; AIA Group (1299) and Xiaomi (1810) also did not hold back, spending HKD 13.645 billion and HKD 10.957 billion on repurchases respectively since the beginning of the year; meanwhile, Meituan (3690), whose stock price has been declining for the past few years, also spent nearly HKD 100 million on repurchases over two consecutive days at the end of last month, following management's statement at the annual general meeting that "the value is severely underestimated." ## Hang Seng Index Continues to Rebound, Needs to Stabilize Above the 20-Day Line The large-scale repurchases by several companies help accelerate the bottoming process of Hong Kong stocks. However, the external market has just begun to adjust, and under the macro environment, the shadow of rising overseas interest rates still looms. Although the current price-to-earnings ratio of Hong Kong stocks is only 11 to 12 times, there is still a distance from the single-digit price-to-earnings ratio of about 8 to 9 that previously triggered foreign capital inflows to buy severely undervalued Hong Kong stocks. From a technical perspective, the moving averages are still in a bearish arrangement, and the basic 20-day line has not yet been reclaimed. Facing a bumpy rebound journey, it is difficult to say whether Hong Kong stocks have successfully found the bottom of this cycle. It remains to be seen whether the rebound is a dead cat bounce or if it will build a bottom for recovery. Currently, short-term support is around the 5-day and 10-day lines at approximately 23,200-23,250 levels, with the next support at the psychological level of 23,000. If this level is broken again, there may be a chance to break the bottom once more. To continue the rebound momentum, it is necessary to return to stabilize above the 100-week line at around 23,550 and the 20-day line at 23,800, breaking through the psychological level of 24,000, and then gradually challenge the 50-day line at around 25,000, which also happens to be the top of the daily Bollinger Bands. **Gu Tianhou** ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [META.US](https://longbridge.com/en/quote/META.US.md) - [INTC.US](https://longbridge.com/en/quote/INTC.US.md) - [MU.US](https://longbridge.com/en/quote/MU.US.md) - [04335.HK](https://longbridge.com/en/quote/04335.HK.md) - [.DJI.US](https://longbridge.com/en/quote/.DJI.US.md) - [.NDX.US](https://longbridge.com/en/quote/.NDX.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [.IXIC.US](https://longbridge.com/en/quote/.IXIC.US.md) - [MSFL.US](https://longbridge.com/en/quote/MSFL.US.md) - 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