US stocks registered the largest one-day adjustment since the start of the Trump-driven bull run. The reason reported by the media is that investors are getting impatient about the delays to Trump tax cuts. The suggested reason for the fall of bank stocks was the cooling expectations for future Fed rate hikes and the expectation of widening spreads.
The property market remains hot after the Fed rate hike, with new property sales launched one after another and sold out in the blink of an eye. Many foresee that the property market will keep rising, while others think that the property bubble is going to burst soon.
The US stock market had gone through quite an amazing run - a 14-day winning streak - which investors have attributed to the Trump presidency. While the US market has been rising on expectations of a reduction in corporate taxes, the Hong Kong and Singapore markets did not participate in this mini bull run.
The share price of Powerlong Real Estate Holdings Ltd (1238.HK), since its listing in 2009, had stayed low for a couple of years, but it finally surfaced on 9 March and broke above its initial public offering (IPO) price of HK$2.75. Now that it is no longer a “tied up stock”, I think its price stands to increase even further. In fact, the stock has been on an uptrend since 9 March, registering an increase of about 11 percent.
As the market odds of March rise in US interest rates hit 80 percent or even 90 percent a few days ago, the Hang Seng continued rising, until it registered a sudden crash on 9 March (Thurs). What had been gained in the few days before that had all been lost in a day.
Donald Trump became the US President despite not having had experience in political office. Similarly, most of Trump's Cabinet members are “political greenhorns”. This explains the cavalier attitude that he adopts and, when coupled with political naivety and greenhorns from the military, has overturned the US political culture.
The Hang Seng opened 268 points higher yesterday, and at its highest point, it was up by 304 points. But who would have thought that it closed at 48 points lower at the end of the day, with a stunning difference of 386 points between the peak and the low? It’s scary.
CLP Holdings Ltd (002.HK) and Hong Kong Exchanges & Clearing Ltd (388.HK) announced their annual results on Monday. The former reported an 18.8 percent fall in net profit, while the latter’s net profit fell by 27 percent. However, while HKEX’s share price fell by 1.31 percent, CLP’s share price rose by 0.45 percent.
The Dow Jones Industrial average rose eight consecutive times at an amazing magnitude, and closed at a level that is close to historical high. Things are starting to look crazy. I wonder if those who have the guts to chase the market at a high price are betting on a ninth consecutive rise. Or perhaps, could it be the power of derivatives that forced hedge funds to indulge in a buying frenzy?
Relations between China and Singapore have normalized with the return of the nine military vehicles seized by the Hong Kong authorities, signifying positive news for the local stocks market. Singapore’s economy is slowing and we can expect some good news when the 2017 Budget Announcement is made on 20 February.