Market Highlight

The global selloff in stocks deepened, with Japanese and South Korean equities dropping more than 1%. US futures dipped. Treasuries edged lower. The pound extended gains for a fourth day. WTI headed for its first quarterly decline since 2020.

The Hang Seng Index opened 0.4% higher at 17,240.16 in Hong Kong. HSBC Holdings Plc contributed the most to the index gain, increasing 1.7%. Country Garden Holdings Co. had the largest increase, rising 7.2%. In early trading, 48 of 73 shares rose, while 25 fell; 3 of 4 sectors were higher, led by finance stocks.

China's CSI 300 Index rose 0.3%, while the Shanghai Composite gained 0.2%. CSI 300 Health Care Index stocks led the benchmark higher, with 7 of 10 sectors rising. On the CSI 300, 178 of 296 stocks fell, while 118 rose. BYD Co. led the declines, falling 4.6%, while Hundsun Technologies Inc. gained, rising 3.5%.

Top News from the Morning

• Chinese manufacturing activity unexpectedly grew in September, breaking two straight months of declines as a mix of stimulus measures and easing COVID lockdowns helped factories resume production. PMI read 50.1 in September, beating expectations of 49.6, and higher than last month’s reading of 49.4.
   
• A nearly $16 billion JP Morgan fund is expected to reset its options positions on Friday, potentially adding to equity volatility at the end of a gloomy quarter for stocks. Analysts have in the past pointed to the JPMorgan Hedged Equity Fund’s quarterly reset roiling markets, and see it as a source of potential volatility during Friday's session. Options dealers - typically big financial institutions that facilitate trading but seek to remain market-neutral - take the other side of the fund's options trades. To minimize their own risk, they typically buy or sell stock futures, depending on the direction of the market's move. Such trading related to dealer hedging has the potential to influence the broader market, especially if done in size, as is the case for the JPM trade.
   
• Nike Inc cautioned on Thursday that gross margins would remain under pressure through the year as the world's largest sportswear maker joined peers in warning of a blow from ramped up discounts and a rapidly strengthening dollar. The company's shares, already one of the worst performing Dow components for the year, fell 10% in extended trading.
   
• Micron Technology reported Q4 EPS of $1.45, $0.04 better than the analyst estimate of $1.41. Revenue for the quarter came in at $6.64 billion versus the consensus estimate of $6.81 billion.
   
• U.S. mortgage lender Fannie Mae on Thursday named Priscilla Almodovar, a former managing director at JPMorgan Chase & Co, as its chief executive officer effective Dec. 5.
   
• Elon Musk posted on Twitter Thursday that the company’s much-anticipated Cybertruck will be “waterproof enough to serve briefly as a boat, so it can cross rivers, lakes & even seas that aren’t too choppy.”
   
• A U.S. judge on Thursday dismissed Peloton Interactive Inc's lawsuit seeking a declaration it did not infringe Lululemon Athletica Inc's patents in developing its own line of apparel.
   
• Facebook-parent Meta Platforms will freeze hiring and further restructure amid an uncertain macroeconomic situation, quoting Chief Executive Mark Zuckerberg's communication with employees.
   
• Bed Bath & Beyond said it is seeing early signs that efforts to clear excess inventory are working and it expects its cash flow to break even in the fourth quarter, even as it reported a bigger-than-expected second-quarter loss.
   
• The U.S. SEC fined the Chinese affiliate of Deloitte, one of the "Big Four" accounting firms, $20 million for letting some clients, including foreign companies listed on U.S. exchanges, conduct their own audit work.
   
• Google said on Thursday it would wind down its consumer gaming service, Stadia, as it failed to attract enough interest from gamers after nearly three years of being launched.
   
• New York Governor Kathy Hochul announced Thursday that the state plans to adopt California's rules approved in August that would require all new vehicles sold in the state by 2035 to be either electric or plug-in electric hybrids.
   
• Exuberance and fear. A combined $6.7 billion rushed into the biggest ETFs tracking US stocks, bonds and high-yield credit in Wednesday's window of optimism. But Wall Street's widely followed gauge of fear is flashing signs of stress. The VIX rose to 31.84, and has hovered above 30 every day this week. Before that it hadn't pierced 30 since June.
   
• IPhone maker Foxconn is teaming up with Lordstown to make EVs in the US.
   
• The RBI will probably raise its key rate 50 bps to 5.9%, its third consecutive hike amid higher inflation and as the rupee sees record weakening. Bangladesh's central bank raised its key rate to 5.75% from 5.5%, effective from Oct. 2.
   
• The US imposed sanctions on a crude storage operator and nine other entities from China, Hong Kong, Iran, India and the UAE after accusing them of violating restrictions on Iranian oil exports. The Treasury Department said the sanctions focused on a network of firms tied to the sale of hundreds of millions of dollars' worth of petrochemicals and petroleum products from Iran to South and East Asia.
   
• China will allow nearly two dozen cities to lower mortgage rates for purchases of primary residences through year-end. Analysts said the move may provide only limited help for the struggling housing market.
   
• Singapore boosted maximum housing loan limits after a jump in borrowing costs, raising the interest rate floor used to calculate the total debt and mortgage services ratio by 50 bps.
   
• Elon Musk wanted Twitter to include the word "Trump" in a search of corporate communications and documents to better understand the company's problem with fake accounts, as the name is often associated with spam, the billionaire's attorney said.
   
• Chart of the Day: Mexico and Colombia both hiked, by 75 bps and 100 bps respectively, extending record tightening cycles of 525 bps by Banxico and 875 by Banco de la República. Long a region plagued by elevated inflation, Latin America saw its central banks start hiking earlier than others, and authorities have been more aggressive than their developed economy peers in addressing surging prices as the world emerges from the pandemic.

Hong Kong

Option Name

Last Price

1928 HK 10/28/22 C23 Equity

0.27

700 HK 10/28/22 P265 Equity

11.2

1928 HK 10/28/22 C21 Equity

0.7

883 HK 10/28/22 C9.75 Equity

0.2

3988S HK 10/28/22 C2.7 Equity

0.02

902 HK 11/29/22 C3.4 Equity

0.27

700 HK 10/28/22 P270 Equity

13.8

700 HK 12/29/22 P265 Equity

19.73

700 HK 10/28/22 C300 Equity

2.44

902 HK 11/29/22 C3.6 Equity

0.17

US

Option Name

Last Price

AAPL US 09/30/22 C150 Equity

1.88

AAPL US 09/30/22 P145 Equity

0.57

TSLA US 09/30/22 C285 Equity

6.89

TSLA US 09/30/22 C290 Equity

4.1

AAPL US 09/30/22 C152.5 Equity

0.81

AGNC US 01/20/23 C12 Equity

0.11

TSLA US 09/30/22 P280 Equity

2.5

AAPL US 09/30/22 C155 Equity

0.28

BABA US 01/20/23 P180 Equity

98.6

AAPL US 09/30/22 C148 Equity

3.18

Edward Liu

Head

Tiffany Cheung

Product Specialist

Jenny Luo

Trader

Email

advisory@goldhorse.com.hk