The Hang Seng Index opened higher but closed lower on the first trading day in the year of the Dog and HSBC Holdings PLC (005.HK) was a key stock to look at.
On 4 January 2018, the Dow Jones Industrial Average surged above 25,000 points. Almost immediately, President Trump cheered and promised to deliver another 20 percent gain to the US stock market.
At the end of last year, the Hang Seng Index (HSI) plunged by 2000 points after breaking above 30,000 points for the first time. The plunge spooked many retail investors who lacked confidence. Consequently, when the HSI broke above 30,000 points for the second time, it shot up to 32,000 points with irresistible force.
It was nothing short of a bull market since the start of 2018 with the US market jumping higher and higher. The three major US indices kept on creating record highs as the Dow Jones Industrial Average (DJIA) hurdled past the psychological 25,000-mark, which was a dream level especially when the US bull market has been surging for the past nine years.
After the Hang Seng Index had risen for 14 consecutive days, bearish investors finally made a right bet, but a small one—the Hang Seng merely stopped rising for a day, but resumed “normal service” on Tuesday (16 Jan). This time, the Hang Seng registered an even more rapid rise. After shooting up by 565 points in one go, it was just 54 points away from its historical high in 2007.
On 10 January 2018, the Hang Seng Index (HSI) set the record, rising for the 12th consecutive day in the longest uninterrupted streak in history.
The Hang Seng Index broke above 30,000 points upon opening on the first trading day of 2018. However, an immediate correction ensued almost immediately. It seemed that 30,000-points level was deemed too high by some, leading to some profit taking.
Back in December 2016, numerous media reports circulated predictions of a catastrophic year for stocks in year 2017. Despite the negativities, I encouraged investors not to be swayed by fear-mongering. As it turned out, 2017 was a year where global equities went on a meteoric rise.
In a bat of an eye, the year has come to an end again. Not surprisingly, many newspapers and magazines have reviewed the stock market for the year 2017. Along with it, they also featured market experts' forecasting how the stock market will pan out next year. Readers should take note of the “experts’ “forecasts and review them at the end of the year to see how accurate they are.
The US Senate and House of Representatives have already presented their own version of the long-awaited tax reform bill and key differences were reconciled in the conference committee. The final tax bill is now one House vote away before it becomes official.