Hong Kong Rises As Tariffs Bite US Economy
5 Min. Read Time
Key News
Asian equities were mixed but mostly higher overnight as Thailand and the Philippines outperformed while Pakistan and Korea underperformed. Hong Kong and Shenzhen saw gains, while Shanghai was slightly lower.
Tariffs are beginning to bite in the US economy, as GDP for the first quarter, reported this morning, declined by -0.3% year-over-year (YoY) while jobs growth slowed. This is weighing on US markets more than export slowdowns are weighing on China's markets.
China released trade data overnight showing a slowdown in manufacturing growth in April compared to March, when orders were front-loaded ahead of tariffs. While headlines are screaming about a major slowdown, the Caixin survey showed expansion year-over-year. New export orders, nonetheless, were abysmal as tariff uncertainty weighs on purchases of goods.
Alibaba is expanding "Instant Commerce" in China through a new segment of the TaoBao app. Alibaba boasts one of the the widest selections of items that can be ordered for same-day delivery. While Meituan is king in local services and speedy deliveries, Alibaba could become a strong competitor to their business with this new launch, especially in non-food products. Alibaba also has the Ele.me food delivery service, though Meituan retains strong market share in food delivery.
President Xi met with AI companies at the SMC Shanghai Foundation Model Innovation Centre, highlighting China's potential leadership position in the space. His visit also included some foreign researchers and entrepreneurs in attendance, which is a signal that foreign talent will be welcomed in China in the AI industry.
Southbound flow into Hong Kong from Mainland investors turned positive again overnight after outflows on Monday and Tuesday. The year-to-date (YTD) net flow is over $75 billion, which is near the full year flow for 2024. April was the second highest inflow month for the program in its history, with inflows averaging $1 billion per day. Southbound flow is regularly accounting for 30% to 50% of Hong Kong's turnover. This trend could lead to more differentiation between stock performance in Hong Kong and the US, for stocks that are listed in both places. This should be reason enough for companies to relist in Hong Kong and maintain listings in both Hong Kong and New York, in our opinion.
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.5% |
| Hang Seng Tech | HSTECH Index | 1.3% |
| Hong Kong Turnover | HKTurn Index | 13.4% |
| Hong Kong Short Sale Turnover | HKSST Index | 24.7% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 13.9% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 108.5 |
| China (Shanghai) | SHCOMP Index | -0.2% |
| China (Shenzhen) | SZCOMP Index | 0.7% |
| China (STAR Board) | Star50 Index | 0.9% |
| Mainland Turnover | .chturn Index | 14.6% |
| Nouthbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -1.1% |
| Japan | NKY Index | 0.6% |
| India | SENSEX Index | -0.1% |
| Indonesia | JCI Index | 0.3% |
| Malaysia | FBMKLCI Index | 1.6% |
| Pakistan | KSE100 Index | -3% |
| Philippines | PCOMP Index | 1.6% |
| South Korea | KOSPI Index | -0.3% |
| Taiwan | TWSE Index | 0% |
| Thailand | SET Index | 2.2% |
| Singapore | STI Index | 0.7% |
| Australia | AS51 Index | 0.7% |
| Vietnam | VNINDEX Index | 0% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 99 | Not Available |
| Advancing Stocks | 59 (Hang Seng) | 147 (CSI 300) |
| Declining Stocks | 24 (Hang Seng) | 145 (CSI 300) |
| Outperforming Factors | Growth, Small Caps | Growth, Small Caps |
| Underperforming Factors | Value, Large Caps | Value, Large Caps |
| Top Sectors | Information Technology, Health Care, Energy | Health Care, Information Technology, Consumer Discretionary |
| Bottom Sectors | Financials, Materials, Utilities | Financials, Utilities, Energy |
| Top Subsectors | Technology Hardware, Semiconductors, Media & Entertainment | Internet, Computer Hardware, Auto Parts |
| Bottom Subsectors | Banks, Consumer Durables, Consumer Services | Port, Land Transport, Banking |
| Southbound Connect Buys | Meituan, CCB, Xiaomi, Alibaba | N/A |
| Southbound Connect Sells | ICBC, Xpeng, China Mobile | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 0.7 |
| Communication Services | 9 | 1.03 |
| Consumer Discretionary | 28 | 0.67 |
| Consumer Staples | 13 | 0.98 |
| Energy | 7 | 1.2 |
| Financials | 23 | -1.15 |
| Health Care | 13 | 1.23 |
| Industrials | 20 | 0.29 |
| Information Technology | 10 | 4.44 |
| Materials | 10 | -0.56 |
| Real Estate | 6 | 0.28 |
| Utilities | 12 | -0.04 |
| Mainland China Listed | 404 | -0.19 |
| Communication Services | 6 | -0.11 |
| Consumer Discretionary | 31 | 0.59 |
| Consumer Staples | 24 | 0 |
| Energy | 13 | -0.46 |
| Financials | 64 | -1.31 |
| Health Care | 31 | 1.25 |
| Industrials | 64 | -0.38 |
| Information Technology | 91 | 0.9 |
| Materials | 58 | -0.45 |
| Real Estate | 6 | 0.21 |
| Utilities | 16 | -0.53 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.9 |
| Alibaba HK | 9988 HK Equity | 2.2 |
| JD.com HK | 9618 HK Equity | -0.8 |
| NetEase HK | 9999 HK Equity | 2 |
| Yum China HK | 9987 HK Equity | 0.4 |
| Baozun HK | 9991 HK Equity | 3.2 |
| Baidu HK | 9888 HK Equity | -0.2 |
| Autohome HK | 2518 HK Equity | -0.3 |
| Bilibili HK | 9626 HK Equity | 1 |
| Trip.com HK | 9961 HK Equity | 0.9 |
| EDU HK | 9901 HK Equity | 2 |
| Xpeng HK | 9868 HK Equity | -1 |
| Weibo HK | 9898 HK Equity | 1.8 |
| Li Auto HK | 2015 HK Equity | 1.1 |
| Nio Auto HK | 9866 HK Equity | -5.1 |
| Zhihu HK | 2390 HK Equity | 0.2 |
| KE HK | 2423 HK Equity | -0.6 |
| Tencent Music Entertainment HK | 1698 HK Equity | 0.5 |
| Meituan HK | 3690 HK Equity | -1.4 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| XIAOMI CORP-CLASS B | 5.3 |
| ALIBABA GROUP HOLDING LTD | 2.2 |
| TENCENT HOLDINGS LTD | 0.9 |
| MEITUAN-CLASS B | -1.4 |
| CHINA CONSTRUCTION BANK-H | -2.9 |
| AIA GROUP LTD | 6.5 |
| IND & COMM BK OF CHINA-H | -2.9 |
| BYD CO LTD-H | -0.3 |
| SEMICONDUCTOR MANUFACTURING | 2.5 |
| BANK OF CHINA LTD-H | -0.5 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TALKWEB INFORMATION SYSTEM-A | 4.1 |
| CHINA MERCHANTS BANK-A | -3 |
| BYD CO LTD -A | -0.5 |
| IND & COMM BK OF CHINA-A | -3.6 |
| GIGADEVICE SEMICONDUCTO-CL A | 1.6 |
| KWEICHOW MOUTAI CO LTD-A | 0.2 |
| EAST MONEY INFORMATION CO-A | 0.4 |
| LEO GROUP CO LTD-A | -1.1 |
| LUXSHARE PRECISION INDUSTR-A | 1 |
| IEIT SYSTEMS CO LTD-A | 4.5 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD
- CNY per EUR
- Yield on 10-Year Government Bond
- Yield on 10-Year China Development Bank Bond
- Copper Price
- Steel Price
