On Tuesday, US markets closed lower, with the Dow Jones Industrial Average declining for the fourth straight session. In contrast, Google’s stock defied the broader market, surging over 5%. Investors are closely watching the upcoming US CPI inflation data to gain more clarity on the Federal Reserve’s future monetary policy.
Michael Brown, Senior Market Analyst at Pepperstone Group, commented, “Tuesday’s market was relatively calm as participants await the crucial US CPI report. Given strong earnings growth, stable economic expansion, and the ‘Fed put’ market sentiment, I remain inclined to buy on market dips.”
The US Bureau of Labor Statistics is set to release November’s CPI data today. According to a research note from Goldman Sachs, the bank expects the core CPI for November to rise 0.28% month-on-month, slightly below the market consensus of 0.3%. On a year-on-year basis, core CPI is forecasted to increase by 3.27%, also slightly below the consensus estimate of 3.3%.
On the corporate front, Google’s stock soared more than 5% on Tuesday. Google (GOOG) closed up 5.3%, while its Class A shares (GOOGL) jumped around 5.6%. The surge followed Google’s announcement on Monday of its new quantum computing chip, Willow. The chip is said to have groundbreaking error-correction capabilities, solving a key problem that has stumped researchers for nearly 30 years. The news fueled gains in quantum computing stocks, with Rigetti Computing (RGTI) closing up over 45%.
Meanwhile, Oracle’s stock fell more than 6% after reporting quarterly results that fell short of expectations. The company’s revenue grew 9% year-on-year, while cloud revenue rose over 24%. However, EPS growth slowed to 9.7%, falling slightly short of analysts’ projections. Bloomberg Intelligence analyst Anurag Rana commented, “Investors may have been expecting a more significant beat, but the actual results did not meet those elevated expectations.”
US Markets
Fundamental Analysis:
Large-cap tech stocks saw mixed performance. Google surged over 5% following its breakthrough in quantum computing with the “Willow” chip. Apple and Meta rose slightly, while Nvidia fell more than 2%. Microsoft, Amazon, and Intel also recorded small losses.
Semiconductor and chip stocks faced heavy pressure, with AMD, Qualcomm, and TSMC all sliding over 2%, while Advanced Micro Devices (AMD) dropped more than 8%, Micron fell 5%, and Intel lost over 3%. Oracle dropped 6.67% after its Q2 earnings and Q3 guidance came in below expectations.
Chinese ADRs faced broad declines. The Nasdaq Golden Dragon China Index slumped 4.34%, while the Direxion Daily FTSE China Bull 3X Shares ETF (YINN) plunged nearly 13%.
Key names in the sector saw steep drops — Tiger Brokers fell over 14%, Futu Holdings sank more than 11%, and Bilibili lost over 11%. NIO slid more than 7%, Xpeng fell over 6%, while Pinduoduo, Li Auto, and NetEase each fell more than 5%.
Technical Analysis:
Market Trends:
- Dow Jones: -154.10 points (-0.35%), closing at 44,247.83
- Nasdaq: -49.45 points (-0.25%), closing at 19,687.24
- S&P 500: -17.94 points (-0.30%), closing at 6,034.91
Hong Kong Markets
Fundamental Analysis:
Hong Kong’s three major indexes opened higher but gave up gains throughout the session. Technology stocks were mixed, with Baidu rising over 1%, while JD.com and Meituan fell around 1%. The medical device sector saw strong gains, led by a 24% surge in MicroPort Robotics.
Dairy stocks also saw notable gains, with Yoyuan Dairy rising more than 11%. On the downside, insurance stocks were under pressure, with Ping An Insurance falling over 3%.
Fosun Tourism and Culture Group soared 81% after resuming trading. The company announced a buyout offer to acquire its shares through a scheme of arrangement at a cash price of HKD 7.8 per share, representing a 95% premium to the pre-suspension closing price. The total transaction is valued at approximately HKD 2.122 billion.
After the deal’s completion, Fosun International and Fosun Holdings will own approximately 98.44% and 1.56% of the company’s shares, respectively. The company’s listing status on the Hong Kong Stock Exchange will be withdrawn.
Technical Analysis:
Technical Analysis:
- Hang Seng Index: Flat, closing at 20,310.34
- Hang Seng Tech Index: -0.23%, closing at 4,581.18
- Hang Seng China Enterprises Index: +0.08%, closing at 7,312.22
FTSE China A50 Index
Fundamental Analysis:
Mainland Chinese A-shares saw modest gains in early trading. By midday, the combined turnover across the market stood at CNY 1.1427 trillion, down CNY 381.1 billion from the previous session. More than 3,500 stocks rose, marking a broad-based advance.
Leading sectors included consumer electronics, Shanghai state-owned enterprise reform, quantum computing, and food processing. On the other hand, the insurance and “Sora” concept sectors faced selling pressure.
Shanghai state-owned enterprise reform stocks saw strong gains, with shares of Shanghai International Port Group, Shanghai Industrial Holdings, Shanghai Shentong Metro, and Shanghai Electric all hitting their upper price limits.
Consumer electronics stocks were among the top gainers, led by Tianjian, Xingxing Electronics, Shengli Precision, Zowee Tech, and Edifier, which all closed limit-up.
Food processing stocks continued their rally, with Yiming Foods logging its 12th consecutive limit-up, while Haixin Foods, Barbeque Nation, HuiFa Foods, and Taoli Bread also closed limit-up.
Quantum computing stocks rose sharply, driven by Google’s announcement of its new chip. Dahua Intelligent, Fudan Fuhua, Digital China, and Geke Software all hit limit-up.
On the other hand, insurance and banking stocks were among the biggest laggards, with Tianma Holdings hitting limit-down, while New China Life Insurance and Ningbo Bank fell.
The “Sora” concept sector saw sharp declines, with Huayang Lianzhong hitting limit-down, while Yidian Tianxia and Fengyu Zhuzhuang both dropped over 7%.
Technical Analysis:
Market Trends:
- Shanghai Composite Index: +0.22%, closing at 3,430.25
- Shenzhen Component Index: +0.43%, closing at 10,859.05
- ChiNext Index: +0.08%, closing at 2,265.80
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