Futu Tan Zhile: Guiding the way on the investment front.-transcript
On May 13, 2025, the US-China tariffs significantly decreased! Let's look at the different impacts on Hong Kong and US stocks one by one.
Recent US-China trade negotiations have made significant progress beyond expectations, stimulating the Hong Kong and US stock markets to rise sharply on Monday. After talks in Geneva, both sides reached a 90-day 'ceasefire' on tariffs, with US tariffs on China dropping from 145% to 30%, and Chinese tariffs on the US decreasing from 125% to 10%. The remaining 20% gap is solely due to the issue of fentanyl tariffs. Up to now, the news surrounding the entire trade negotiations has mainly focused on the controversy over fentanyl, with both sides expressing a willingness to cooperate and releasing friendly signals, showing a clear shift in attitude compared to a period in the past, enhancing the market's hopes for consensus in US-China trade talks. Additionally, if a long-term agreement is not reached within 90 days, tariffs may rise again to 54% (US) and 34% (China), but analysts believe both parties do not wish to move towards 'economic decoupling' and will strive to maintain trade balance.
This year, the focus of negotiations in the USA will center on semiconductor and pharmaceutical trade, as the USA seeks to reduce its trade deficit with China and protect intellectual property rights, while China may relax import restrictions on US semiconductors and pharmaceuticals. At the very least, the goals for both sides in the trade negotiations are clear and defined.
In the next 90 days, progress in negotiations between the USA and China in the semiconductor field will significantly impact the performance of the Hong Kong stock market, particularly in the Technology and Manufacturing sectors. So far, the details of the semiconductor negotiations remain unclear, which is one reason for today's market pullback after the sharp rise. However, considering that both sides' negotiation goals are relatively clear at present, the possibility of easing trade tensions remains relatively high. It is believed that the situation can still be viewed optimistically.
However, in terms of short-term market performance, the US stock market may have the edge. After all, tech stocks in the Hong Kong market are more reliant on trade negotiations regarding semiconductor demand, and in the short term, attention is also focused on the first-quarter performance of various tech companies. As for the USA and China reaching a trade agreement with other allies to avoid the risk of economic recession, this would benefit the stock market in rebounding in the short term.
Short-term outlook for the US stock market.
From a technical perspective, $S&P 500 Index(.SPX.US)$ if the resistance level at the neckline of the double top pattern at 5773 points is broken, as long as the short-term market stabilizes above the Monday low of 5786 points, the momentum of the rebound is expected to continue.
However, from the rotation of capital sectors, it can be noted that some stocks that were previously unaffected by the trade war are showing signs of capital outflow, such as streaming platforms. $Netflix(NFLX.US)$ 和 $Spotify Technology(SPOT.US)$ This week has underperformed the market. In contrast, Technology stocks that are highly sensitive to trade wars, such as$Tesla(TSLA.US)$ $NVIDIA(NVDA.US)$ $Apple(AAPL.US)$ $Amazon(AMZN.US)$ have shown technical breakthroughs. Short-term capital is more likely to chase some stocks that are somewhat related to trade wars.
In addition, as concerns about the macroeconomic environment decrease, it is believed that the investment track for AI remains unchanged. For example $Palantir(PLTR.US)$ 和 $Applovin(APP.US)$ These AI application sectors should be monitored under certain conditions.
Short-term outlook for the Hong Kong stock market.
$Hang Seng Index(800000.HK)$ 和 $Hang Seng TECH Index(800700.HK)$ Today's technical analysis is quite awkward, as the Hang Seng Index has evaporated the gains from yesterday's market situation (May 12, 15:00-16:00). Fortunately, today is not characterized by a large decline in volume (big drop with high turnover), and if the market continues to maintain an average daily transaction amount of about 2000 to 250 billion, the short-term scenario is likely a pattern of high-level consolidation waiting for change. Most of the changes to wait for are likely to be relevant news from future negotiations between China and the USA.
From a technical analysis perspective, the KDJ has issued a 'sell' signal, but the Candlestick does not belong to any reversal pattern; it merely signals resistance at the high point of 23,494. On the daily chart, the 50-day moving average at 22,800 is the first significant support level, while resistance is at 23,500 to 23,600.
If viewed from the hourly chart, the upward trend has not yet been broken today. In the short term, attention can be paid to the aforementioned upward channel, with the bottom currently at the 23,000 mark. This will more effectively determine the market performance at the extreme levels.
One possible reason for today's sharp drop might be the street inventory of bull-bear certificates.
It is a relatively rare ratio of 75:25 for bull-bear certificates recently.
This has led to profit-taking.
In terms of Fundamental Analysis, large Technology stocks listed in Hong Kong remain relatively passive in the ongoing US-China trade negotiations, and whether Chinese enterprises will be able to successfully procure NVIDIA H20 chips in the future remains uncertain, which will limit their valuation uplift space. However, in the long run, it is believed that the development trend of technology enterprises remains positive without particular concerns. In the short term, it is believed that the Autos sector, which is less affected by the Semiconductor news, still holds an advantage. $BYD COMPANY(01211.HK)$ 、 $GEELY AUTO(00175.HK)$ 、 $XPENG-W(09868.HK)$ Pay attention to this type of leading technology Autos.
The market is likely to maintain a pattern of 'speculating on stocks, not on the market.' Recently, several domestic demand stocks that previously outperformed the market have weakened. $ANTA SPORTS(02020.HK)$ 和 $HAIDILAO(06862.HK)$ It cannot be ruled out that the stocks already outperformed the market when the trade war news hit in April and are currently facing short-term pressure from capital rotation. In the long term, it is believed that the domestic demand Sector still has conditions to be Bullish, provided that these domestic Consumer stocks have strong brand advantages.
For short-term speculation, it is recommended to maintain a perspective based on Technical Analysis to determine trend changes.
For medium-term investments, attention should be paid to the outlook and profit performance after this month's earnings announcement. $JD-SW(09618.HK)$ $TENCENT(00700.HK)$ $BABA-W(09988.HK)$ Large earnings will be announced this week, and relevant stocks will also be closely monitored. $KUAISHOU-W(01024.HK)$ $XIAOMI-W(01810.HK)$ $MEITUAN-W(03690.HK)$ (Meituan's date has not been confirmed) will announce its earnings.
