US Federal Reserve Chairman Jerome Powell said publicly yesterday that interest rate decisions will not consider short-term political or market pressures, and the market is seen as aiming to cool down interest rate cuts in July.
Pay attention to whether the US will increase the trend of personal consumption
Zhang Minhua, Asia investment strategist at Citi Private Bank, said that the Fed’s monetary policy is still unclear. The interest rate cut will depend on inflation data and the outcome of the Sino-US trade war negotiations will make a major blow to the US economy. The bank expects the Fed to have a 50-point cut in interest rates. It should be noted whether the US will further increase tariffs on China and whether the US core personal consumption index will show an upward trend.
Expected funds tend to local consumer stocks, public stocks
In terms of Hong Kong stocks, she said that the automotive and semiconductor industries have higher incomes from the United States, so earnings growth will be relatively weak. However, compared with US stocks, the discount is still over 30%. It is expected that the cheap valuation will attract capital into Hong Kong stocks. Therefore, every time there is new progress in the trade war, Hong Kong stocks have a good rebound in the low position.
She believes that under the trade uncertainty, investors will be more cautious about export stocks and technology hardware stocks, so funds will tend to flow into domestic consumer stocks, public stocks, domestic banks and Chinese property stocks, hoping to receive higher prices under volatile market conditions. Dividends.
On the renminbi side, she said that if there is any progress in the Sino-US negotiations, the renminbi will have a chance to rise to about 6.7 against the US dollar. However, if there is no major breakthrough or even worse, the devaluation rate and magnitude of the renminbi may be large, but in the long run, the renminbi is not considered to be significantly depreciated. As the economic growth in China is expected to increase by about 6.1 to 6.4%, the United States also has a good chance to cut interest rates, and the long-term US dollar will be relatively soft.