Hot news

• Non-farm payrolls have exploded, and expectations of interest rate cuts have steadily declined

The January non-agricultural report showed that the number of employed people surged beyond expectations, showing that the labor market is still hot and the economic growth momentum is strong. The swap market shows that bets on the Fed's interest rate cut in March have declined, and the Fed is no longer fully priced to cut interest rates in May. Analysts believe that part of the reason the US economy is still resilient is that the combination of factors such as the government continues to inject large amounts of capital into society and a virtuous cycle of wage and inflation has temporarily prevented the US economy from entering recession.

• Federal Reserve Governor Warns: It's Too Early to Cut Interest Rates, and Prices Are Still at Risk of Upside

After the Fei Nong night, Federal Reserve Governor Bowman pointed out that she was concerned about the upward pressure on prices brought about by rising wages; she warned against cutting interest rates too soon and expressed caution about future changes in policy positions; she also reiterated that if progress in inflation stagnates, she is still willing to raise interest rates.

• In 2024, US companies may start a wave of trillion-dollar repurchases! This will be a potential catalyst for US stocks

The market currently anticipates that companies' share repurchase plans will increase this year. The reason is that corporate profit expectations will increase, which will enable companies to have more cash in their hands. According to Deutsche Bank's latest estimates, the total amount of corporate stock repurchases in 2024 may rise to 1 trillion US dollars at an annual rate, and will become an important driving force for the stock market. According to Goldman Sachs's latest opinion, this year's share repurchases are expected to increase by at least 4%, while last year's share repurchases fell 15%.

• Deutsche Bank: The Fed's interest rate cut this year may be far lower than market expectations, a repeat of 1995

Deutsche Bank said that the futures market predicts that interest rates will be cut five to six times this year, and the Federal Reserve Fund interest rate will drop by more than 100 basis points by the end of the year, but interest rates may not drop as drastically as predicted. Analysts pointed out that the current economic situation is similar to 1995. Artificial intelligence technology is driving a new productivity cycle. The US economy's sensitivity to interest rates has been drastically reduced, and interest rate cuts may be lower than market forecasts.

• The three major industries of technology, energy, and healthcare have exceeded expectations, and US stocks are “unexpectedly strong” this earnings season

The US stock earnings report is more than halfway through the quarter. The media pointed out that the results of the company's “cost reduction and efficiency” were remarkable. 80% of the company's profit reports exceeded expectations, slightly higher than the normal trend, and the average profit exceeded expectations by more than 6%. The fourth quarter is expected to be the best performing season in 2023. Among them, the performance of the technology, energy, and medical industries was particularly impressive.

Resumption of US stock trading

• There is no fear of “exploiting” non-agricultural industries, and the S&P 500 index reached a record high

On Friday, there was a negative impact of non-agricultural data exceeding expectations during the early trading phase of US stocks, but with the strong charge of tech giants Meta and Amazon, market sentiment picked up positively during the day. In the end, the three major stock indexes closed higher across the board. Among them, the S&P and Dow continued to reach record highs, and the NASDAQ was still about 2% from its previous high at the end of 2021.

By the close, the S&P 500 was up 1.07%, the NASDAQ was up 1.74%, and the Dow was up 0.35%. The three major indices also recorded their fourth consecutive week of gains this week.

Most of the tech giants strengthened, with Microsoft up 1.84%, Amazon up 7.87%, and Nvidia 4.97%. Popular Chinese securities fell, with Ali down 0.84%, Baidu 2.09%, Pinduoduo down 1.58%, and JD down 1.98%

• The market capitalization soared by nearly $300 billion in January! Nvidia's “red hair purple”, Bank of America is still raising the target price

$NVIDIA (NVDA.US)$The stock price cumulatively rose by more than 24% in January, and the market capitalization increased by an unprecedented amount of nearly 300 billion US dollars, the biggest monthly increase in history. This week, US tech giants successively released financial reports that exceeded expectations. Executives mentioned “you have to spend money on AI to make money,” and promises to increase AI spending continue to boost Nvidia's stock price. As Nvidia's stock price continues to reach new highs, Bank of America raised Nvidia's target share price from $700 to $800 per share, reaffirmed its buy rating, and designated it as the preferred stock.

• Meta gives tech stocks a new high valuation template! Wall Street: I want AI, I want profit, and I want dividends!

$Meta Platforms (META.US)$After announcing the first dividend in history, Wall Street$Alphabet-A (GOOGL.US)$,$Amazon (AMZN.US)$Dividend expectations are heating up. Analysts expect that by the end of this year, Meta's revenue growth will fall below 10% at most, and Amazon and Alphabet's growth expectations are even lower. This fully indicates that calls for capital allocation measures may only get louder and louder.

• Meta's stock price soared 20% to a record high, and the investment bank said it could rank in the top three of the “Big Seven” with AI potential

Last Friday,$Meta Platforms (META.US)$It rose more than 20%, and the stock price reached a record high. Josh Beck, an analyst at investment bank Raymond James, said, “Forget the 'Big Seven. 'The popular club for technology stocks is probably' MNM '(Microsoft, Nvidia, and Meta). These three big tech companies will become leaders in the AI era. The results report was combined to announce the first dividend. Investment banks such as Citibank, Barclays, Wedbush, and Goldman Sachs raised their target prices for Meta's stock price due to numerous favorable bombings.

• AMD increases its bet on AI PCs

$Advanced Micro Devices (AMD.US)$President Victor Peng told the media that the AI PC market will continue to expand, and it is expected that more AI PCs will be adopted in the second half of this year. Also, in response to news, AMD's first batch of Instinct MI300X has begun shipping to major customers such as supercomputing and data centers.

• Tesla is left behind! Wall Street buzz: Who will replace the “Seven Sisters of Technology”?

$Tesla (TSLA.US)$Its position as one of the “Big Seven Tech Stocks” is in jeopardy. Since this year, its stock price has continued to fall, with a cumulative decline of 24%. Analysts say the next “takeover” Tesla may be “a company that successfully monetizes the booming momentum of AI”, for example$Broadcom (AVGO.US)$und$Advanced Micro Devices (AMD.US)$. The more common view is that the “seven sisters” of technology stocks may be reduced to six members and become the “six sisters” of technology stocks.

• At a time when Amazon is rising, Bezos plans to sell for the first time in two years, to sell 50 million shares

Last Friday,$Amazon (AMZN.US)$Documents submitted to the US Securities Regulatory Commission and SEC revealed that Bezos has formulated a trading plan to sell 50 million Amazon shares by January 31, 2025. This means that Bezos plans to sell 50 million shares within the next year. Based on Amazon's current stock price, the value of this batch of stocks is about 8.6 billion US dollars.

Top 20 US stock turnover last Friday

Hong Kong Market Outlook

• Beishui sells Hong Kong stock ETFs and once again sells Tencent for nearly HK$1.2 billion

On February 2 (Friday), Southbound Capital sold Hong Kong stocks at a net sale of HK$3,987 billion.

$WUXI APPTEC (02359.HK)$,$WUXI BIO (02269.HK)$,$CHINA MOBILE (00941.HK)$Received net purchases of HK$218 million, HK$193 million and HK$34.6 million respectively;

$TENCENT (00700.HK)$,$TRACKER FUND OF HONG KONG (02800.HK)$,$Hang Seng H-Share Index ETF (02828.HK)$Net sales were HK$1.18 billion, HK$1,075 million and HK$495 million respectively.

• Yao Ming Kant: The company did not pose a national security risk to any country in the past, present, or future

$WUXI APPTEC (02359.HK)$A further announcement was issued on clarifying matters. The company has no human genomics business, nor does the company collect human genomics data in any of its current businesses. Furthermore, the company has no connection with any government or military organization. The company firmly believes that Pharmacovigant did not pose a national security risk to any country in the past, present, or future, and therefore should not be pre-defined as a “biotech company to pay attention to” in the draft.

Today's attention

Keywords: service/non-manufacturing PMI, Powell interview

In terms of economic data, investors can pay attention to China's Caixin Services PMI, US Markit Services PMI, and ISM non-manufacturing data for January.

The ISM non-manufacturing index was the biggest focus for January, which is also one of the most important leading indicators of the US economy. The agency predicts that the data is expected to remain above the expansion line, showing that the momentum of the US economy was still stable at the beginning of the year. This may also further suppress the outlook for future interest rate cuts and help the US dollar regain some momentum.

In terms of the incident, Federal Reserve Chairman Powell will be a guest on CBS's “60 Minutes” program on the morning of the 5th Beijing time to be interviewed on topics such as inflation, interest rate cut expectations, and the banking system. Considering that CBS has already revealed that Powell will talk about interest rate cuts, if it once again suppresses market expectations of interest rate cuts from the Federal Reserve, it may once again trigger market pricing revisions.

Alex McGrath, adviser to Northend's private wealth team, said, “I think we can officially say goodbye to the March interest rate cut, and it is likely that the interest rate cut will be in May.” Jason Pride, chief investment officer of Glenmede, said, “Now it seems less and less likely that the Fed will cut interest rates in March. The more likely trajectory of interest rate cuts this year starts around summer, and the number of interest rate cuts is only 2 to 3 times.”

In terms of financial reports,$McDonald's (MCD.US)$Release the results before the market,$Palantir (PLTR.US)$,$NXP Semiconductors (NXPI.US)$The results market came later.

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