Weekly Market Summary

💡1. US stocks ended higher on Tuesday following a choppy trading session and Treasury bond yields were mixed ahead of the Federal Reserve’s latest monetary policy decision. The US central bank on Wednesday announced its first 0.5 percentage point interest rate rise in more than 20 years, while Fed chair Jay Powell also appeared to rule out 0.75 percentage point increases at upcoming meetings. On Wall Street, the blue-chip S&P 500 index ended the day 0.5 per cent higher and the Nasdaq Composite inched up 0.2 per cent. Trading volumes on the Nasdaq were 10.4 per cent below the 100-day average and 1.7 per cent below the 100-day average for the S&P 500.The yield on the two-year Treasury note, which moves with interest rate expectations rose 0.04 percentage points to 2.77 percent. The dollar index, which measures the US currency against six others and hit a 20-year high last week, dropped 0.3 per cent.

💡2. The Bank of England has warned the UK economy will slide into recession this year as higher energy prices push inflation above 10 per cent, a forecast that pushed sterling to a two-year low. Despite forecasting a severe fall in household incomes, the bank’s Monetary Policy Committee voted on Thursday to squeeze them further, raising the main interest rate a quarter-point to 1 per cent, its highest level since February 2009. The bleak economic forecast took its toll on sterling. The pound dropped 2 per cent against the dollar at $1.2364. With the gloomy outlook, financial markets now expect fewer interest rates rises, leading to a fall in government borrowing costs.

💡3. Stocks fell in Asia on Friday and the dollar was firm as high inflation, rising borrowing costs and China’s Covid lockdowns darken the economic outlook and depress investor sentiment. The COVID-19 breakout in China weakened sentiment and led 10-Year US Treasury yields to fall from a three-year high to 2.88%. Similarly, the 2-Year US Treasury yield ended lower at 2.70% and the 2s10s spread narrowed to 18 bps. Internationally, risk-off sentiment amid Chinese lockdowns drove 10-Year UK Gilt and German Bund yields lower to 1.91% and 0.94%, respectively. While shares in the Chinese ecommerce giant-Alibaba fell as much as 9.4 per cent at the open in Hong Kong. And the politburo statement, released late on Friday, did provide a shot in the arm to Chinese tech stocks on Wall Street, where the Nasdaq Golden Dragon index rose 2.4 per cent on Monday.

💡4. Hong Kong stocks retreated from a two-week high technology stock tumbled after some company insiders cut their stakes in Meituan and JD Health (Meituan sank 4.6 per cent to HK$164.50 while JD Health plunged 13 per cent to HK$43.60). The city faces heightened recession risks while traders brace for higher US interest rates. The Hang Seng Index fell 1.1 per cent to 20,869.52 at the close of Wednesday trading, the biggest drop in a week, and bringing the decline this year to 11 per cent. The Tech Index slumped 3.3 per cent. Chinese stocks have weakened in the past three months even as Shanghai prepares to allow more manufacturers to reopen their factories as infections dropped.

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Showing your market sense and ability to provide feasible investment ideas would help to differentiate you from other candidates. Therefore, apart from the weekly news update / investment insights, we have also generated this Weekly Market Summary for you to have a quick understanding of the market development and tips to answer some hot discussion topics. Take a look of the summary and WhatsApp us in the group if you have questions."