KGI Asia Commentary
Hang Seng Index rose 272 points on Friday
The Hang Seng Index opened 156 points higher on Friday, at 17,370 points, and the day's gain expanded to 272 points, or 1.6%, to 17,486 points. The H-Share Index rose 86 points, or 1.5%, to 5,974 points. The Hang Seng Technology Index rose 58 points, or 1.5%. , reported 3,816 points. The total daily turnover of the market was HK$ 47.9 billion. Cathay Pacific Airways (293) and Haidilao (6862) rose between 2% and 3% on Friday, driven by domestic consumer demand and tourism stocks.
U.S. non-farm payroll data for September exceeded market expectations
U.S. stocks closed higher on Friday, led by technology stocks. The Dow Jones index rose 288 points, or 0.87%, to 33,407 points; the Nasdaq rose 211 points, or 1.60%, to 13,431 points; the S&P 500 index rose 50 points, or 1.18%, to 4,308 points. Last week, the Dow fell 0.3%, the S&P 500 rose 0.48%, and the Nasdaq rose 1.6%. In fact, in the early hours of the U.S. market, investors were assessing strong labor market data and its impact on Federal Reserve policy.
The latest US non-farm payrolls report for September. The U.S. Department of Labor reported that non-farm payroll employment increased by 336,000 in September after seasonally adjusting, the largest increase since January 2023, far exceeding the average economist's expectation of 170,000. In addition, the report showed that the number of non-farm employment in July was revised up from 157,000 to 236,000; the number of new non-farm employment in August was revised up from 187,000 to 227,000. After the revision, the total number of new jobs in July and August was 119,000 higher than before the revision. Non-farm payroll far exceeded expectations, strengthening the Federal Reserve's reasons for raising interest rates this year and maintaining high interest rates for a long time. U.S. stocks were under pressure in the early hours of the market.
Non-farm payroll drives up Treasury yields
In the bond market, strong non-farm data caused the U.S. 10-year Treasury yield to rise to 4.887%, setting a new high since 2007. The 30-year Treasury bond yield rose to 5.04%, the highest level since 2007. When U.S. stocks closed on Friday, gains in U.S. bond yields narrowed, with the 10-year Treasury yield falling back to 4.79%. The current futures swap market price shows an increase in the possibility of the Federal Reserve raising interest rates this year, and fully pricing in the delay of the Federal Reserve interest rate cut from July 2024 to September. Even though rates are at or very close to the peak, but the question is how long the Fed needs to keep rates high.
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
The materials contained herein are provided by KGI Asia Limited ("KGI") for information only. While such materials are based on or derived from sources believed to be reliable, KGI makes no representation or warranty (express or implied) as to their accuracy or reliability. Neither the information nor the opinions expressed herein constitute, or are to be construed as, an offer or invitation or solicitation of an offer to buy or sell any securities or investments. KGI and its officers, employees, agents and affiliates may have interests in the securities or investments covered herein and accept no liability whatsoever for any loss or consequence whatsoever (whether direct or indirect) resulting from any use of or reliance by you on such materials.