Tianfeng Securities According to the released research report, the Hong Kong dollar is subject to the uncertainty of the US Hong Kong interest rate gap and whether the US economy can achieve a soft landing, and the support for internal and external liquidity of Hong Kong stocks may be relatively limited. Against the background of a significant improvement in domestic and foreign capital sentiment, Hong Kong shares have contributed to a relatively significant rebound. The subsequent sustainability and rising space need more consolidated fundamental data to cooperate with it. During the verification period of economic recovery, Hong Kong shares remain cautious and optimistic. Under the benchmark assumption of soft landing of the U.S. economy and continued easing of the financial condition index, the U.S. stock market may maintain an upward trend in the medium-term dimension, while the short-term sentiment of the market once again comes to a neutral and low level, and the U.S. stock market may have a certain allocation cost performance ratio.

Hong Kong stock market: internal and external liquidity support of Hong Kong stock is relatively limited

1) Hong Kong stocks ended up in shock, with outstanding performance in the public utilities sector. From June 3 to 7, after two consecutive weeks of adjustment, Hong Kong shares showed signs of staged stabilization, and the main broad base indexes rebounded to varying degrees. The Hang Seng Index and Hang Seng Technology rose 1.6% and 2.2% respectively. At the style level, low volatility and quality factors led the market, and only the small market style recorded negative returns; At the strategic level, the multi factor combination is superior to risk control and the Shanghai Shenzhen Hong Kong Stock Connect AH smart index; At the industry level, utilities and information technology both rose by more than 3%, while telecommunications, mandatory consumption and energy industries were slightly adjusted;

2) In terms of internal liquidity, the Hong Kong dollar is subject to the US Hong Kong interest margin or is difficult to provide significant capital increase. When the Hong Kong dollar touches the guarantee of the weak side, the Hong Kong Monetary Authority will passively tighten the liquidity of the Hong Kong dollar under the linked exchange rate system, so that the difference between Libor and Hibor cannot continue to expand, and the pressure on the exchange rate side will be transferred to equity assets, so Hong Kong shares often fall further after the Hong Kong dollar reaches the weak guarantee. Therefore, as far as short-term interest rates are concerned, considering that there is still a period of time before the Federal Reserve's interest rate cut operation, the probability of rapid decline of three-month Libor may not be large, so the interest margin between the United States and Hong Kong will remain at a positive level, and the Hong Kong dollar may be subject to this or difficult to provide significant capital gains for Hong Kong stocks;

3) In terms of external liquidity, whether the US economy can achieve a soft landing or not is the key factor affecting the external financial conditions of Hong Kong shares. In the first three rounds of interest rate cut cycles since 1990, American credit standards were in a marginal or historical relatively loose range, and the financial condition index also kept low. The improvement of external liquidity supported the valuation of Hong Kong stocks; In contrast, the last three rounds of interest rate cuts have all presented a coping feature, that is, the Federal Reserve responded to interest rate cuts only after the US economy experienced recession pressure. At this time, the accumulated interest rate increase pressure in the earlier period has been transmitted to the credit side, driving the liquidity environment to tighten and squeezing the valuation of Hong Kong stocks. If the US economy remains resilient in the future and the Federal Reserve starts the process of preventive interest rate reduction, the external financial conditions of Hong Kong stocks may be more improved;

4) In the future, Hong Kong shares have led to a relatively significant rebound against the background of the substantial improvement of domestic and foreign capital sentiment. The subsequent sustainability and upside space need more consolidated fundamental data to cooperate with it. During the verification period of economic recovery, Hong Kong shares remain cautious and optimistic. In terms of allocation, on the one hand, public utilities, energy, finance, telecommunications and other sectors with high dividend yield are expected to provide considerable relative returns in this environment even if the market volatility increases in the future; On the other hand, the technology industry represented by semiconductor and Internet will still be the main focus of industrial transformation, which is expected to benefit from government support and domestic substitution.

US stock market: market sentiment returns to neutral and low level again

1) The US stock market resumed its rise, and technology and growth style rebounded significantly. From June 3 to 7, the ISM manufacturing industry recorded 48.7 in May, lower than the expected 49.6 and 49.2, while the number of non farm payrolls in May increased by 272000, far more than the market's expected 180000. The US stock market fluctuated but ended up as a whole under the combination of long and short. Within the observation range, the three major stock indexes rose collectively, and the NASDAQ index hit a new historical high again; In terms of style, momentum and growth factors rank first, while small cap and high dividend styles are relatively backward; At the strategic level, style rotation is superior to multi factor and GARP strategies; At the industry level, the information technology sector rebounded significantly by 3.8%, and the high level of utilities and energy dropped by more than 3%;

2) The pressure on labor supply and demand in the United States has eased, and cyclical inflation may tend to fall back. Tianfeng Securities believes that the labor situation described in the household survey may be more accurate, the actual employment situation may not be as strong as the non farm data, and the pressure of labor supply and demand may be eased. If this trend continues, the U.S. unit labor cost may further reduce, and its leadership also guides PCE's cyclical inflation to maintain a downward trend, but the decline still depends on the degree of inflation stickiness;

3) Trading sentiment in US stocks eased and negative reaction became passive. Although macro and micro factors catalyze more frequently in the near future, the volatility and skewness of the S&P 500 and NASDAQ 100 have both dropped, indicating that investors have not panicked because of weak economic data or the delayed time point of interest rate cut, and market expectations remain stable. In addition, the shock adjustment of the US stock market since mid to late May has brought the market width to a relatively low level in history again. The negative sentiment has been fully digested, and the US stock market may continue to rise in the future;

4) In terms of investment strategy, under the benchmark assumption of a soft landing of the U.S. economy and continued easing of the financial condition index, the U.S. stock market may maintain an upward trend in the medium-term dimension, while the short-term sentiment of the market once again reaches a neutral low level, and the U.S. stock market may have a certain allocation cost performance ratio. In terms of industry configuration, first, if the subsequent manufacturing PMI confirms the upward trend, the cycle sector represented by energy and raw materials may show some performance; second, the AI industry trend is still in the verification stage, and focus on the configuration opportunities of some scientific and technological segments.

Risk warning: overseas liquidity is rapidly tightened; The risk of a hard landing of the US economy; The international situation is complicated.