【Tan Sir on Stocks 25.7.31】U.S. technology stocks are performing strongly, does the Hong Kong market have a chance to test new highs?

Although U.S. stock indices showed signs of a pullback from their highs this week, overall performance remained strong. Some technology companies, such as $Meta Platforms(META.US)$ and $Microsoft(MSFT.US)$ saw significant gains in after-hours trading following their earnings reports. However, not all technology stocks performed strongly after their earnings announcements. For example, $Arm Holdings(ARM.US)$ provided weak guidance, leading to pressure on its stock price after the earnings release.

The focus this week is on the non-farm payroll data due Friday. Given the recent wave of corporate layoffs, the data may not maintain the strong momentum seen last month. If the data is weaker than expected but the unemployment rate does not rise significantly, it could lead to a positive market sentiment driven by expectations of interest rate cuts. Closely monitor the performance of the non-farm payroll data for short-term direction.

Hong Kong's Hang Seng Index $Hang Seng Index(800000.HK)$ $Hang Seng TECH Index(800700.HK)$ experienced more pronounced adjustments this week. However, the overall market sentiment was not as negative as some had anticipated. $KUAISHOU-W(01024.HK)$ Today, the stock prices continued to show strength, and there was no significant profit-taking in the biotech sector. $WUXI APPTEC(02359.HK)$ Even with share placements at high levels, the stock prices did not immediately fall below the placement price.

The Hang Seng Index is testing a key support level of 24,800-24,900. The author believes that the non-farm payroll data will have a greater impact on the Hong Kong stock market. If the US dollar interest rate is expected to further decline, it would be more favorable for the short-term performance of the Hong Kong stock market.

If investors lack direction in the short term, they may consider low-risk investment products, such as ETFs tracking long-term US Treasury bonds, like $CSOP FTSE US Treasury 20+ Years Index ETF(03433.HK)$ or $iShares 20+ Year Treasury Bond ETF(TLT.US)$ 。

(The above content is for educational purposes only and does not constitute any recommendation)