Investment Insights

CIO Viewpoints

How would Trump’s latest tariff threats rattle the stock markets?

Daily Insights

Focus of the Day

  • Sino-US trade tensions escalated, causing the S&P 500 to approach its 50-day moving average

Other Commentaries

  • US consumer sentiment remained subdued in October, yet exceeded expectations; Japan's decades-long ruling coalition fractured; oil prices fell to a five-month low

Market Analysis

FX Markets Analysis

Latest Technical Highlights

XAU - Uptrend↗

Support / Resistance

vs HKD(Oz) 29,953 / 34,232

vs USD(Oz) 3,850 / 4,400

The US has failed to fulfill its security commitments to its Middle Eastern allies, sparking concerns among oil-producing countries in the region about the dollar system. The market is concerned about whether oil transactions will continue to be denominated in US dollars in the future. Any development that weakens the dollar's status is seen as a positive factor for gold prices.

 

Legends

Uptrend ↗  Sideways →  Downtrend ↘

Pertaining to historical trend technical analysis only and do not reflect any forecasts.

Provided by Hang Seng Investment Services Limited

Stock Markets View

  • Recent remarks by Trump regarding tariffs and software export controls on China have prompted a sell-off in US equities. Elevated valuations may exacerbate a near-term correction. This comes as earnings season is set to begin
  • Inflation risks in the Eurozone remain, complicating the ECB’s capacity to further cut rates to stimulate growth. Coupled with renewed political instability in France, the market is adopting a cautious stance towards European equities
  • Asian markets continue to benefit from the long-term prospects of artificial intelligence and ongoing capital market reforms across the region. Sustained US rate cuts and a weaker dollar could further support capital inflows into Asian assets
  • While emerging Latin American markets have performed well year-to-date, renewed trade-related rhetoric from Trump may weigh on risk appetite, potentially leading to short-term volatility in the region’s equities and currencies
  • Hang Seng Index has retreated from recent highs as markets await clarity on potential Sino-US trade negotiations. The short-term trading range for the index is expected to be between 24,800 and 26,500
Legends

Positive - Expect that the particular asset class potentially may perform well relative to the relevant major global benchmark(s) in the long run
Neutral - Expect that the particular asset class potentially may perform in line relative to the relevant major global benchmark(s) in the long run
Cautious - Expect that the particular asset class potentially may not perform well or in line relative to the relevant major global benchmark(s) in the long run

Provided by Hang Seng Investment Services Limited

Bond Markets View

  • Safe-haven flows into US Treasuries, driven by renewed tariff concerns, have pushed yields to their lowest level in nearly one month
  • Tariff-related uncertainty has bolstered demand for high-quality assets, supporting a weekly gain in US investment-grade corporate bonds
  • India's positive service sector outlook in September has spurred growth in new orders, exports, and employment, supporting the performance of select Indian issuers
  • Widening spreads and softer primary market activity reflect increased risk premiums amid elevated political and economic uncertainty in near term
  • Asian high-yield bonds remain stable. While average consumer spending during China’s holiday period trailed last year’s levels, September sales among the top 100 property developers rose 20% month-on-month, with markets monitoring the impact of recent property support measures
  • Emerging market debt remains supported by inflows and spread compression. Bond and currency markets in Argentina rebounded following US aid, improving sentiment across the asset class
Legends

Positive - Expect that the particular asset class potentially may perform well relative to the relevant major global benchmark(s) in the long run
Neutral - Expect that the particular asset class potentially may perform in line relative to the relevant major global benchmark(s) in the long run
Cautious - Expect that the particular asset class potentially may not perform well or in line relative to the relevant major global benchmark(s) in the long run

Provided by Hang Seng Investment Services Limited

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