Hang Seng Index: Stimulus Hopes and Fed Rate Cut Bets Lift Tech Stocks
AMP Head of Investment Strategy and Chief Economist Shane Oliver commented on the labor market data, saying,
“Aust Nov jobs +35.6k with unemployment falling to 3.9% as participation fell. On its own this argues against a Feb rate cut, so we stick to May for now but its hard to square with weak GDP so could reverse in Dec.Given weak GDP & falling infl we still see a hi chance of a Feb cut.”
China’s Central Economic Work Conference: Day Two
Meanwhile, the second day of China’s two-day Central Economic Work Conference got underway on Thursday morning. President Xi Jinping and senior policymakers are expected to draw stimulus plans for 2025 to bolster the Chinese economy.
On Monday, investors gained insights into potential policy maneuvers after the Politburo announced intentions to loosen monetary policy and introduce fresh fiscal stimulus measures. The stimulus measures would target domestic consumption and broad-based demand.
The announcement underscored Beijing’s determination to bolster the economy as potential US tariffs loom. US President-elect Donald Trump recently warned of 10% tariffs on Chinese goods.
On Wednesday, Natixis Asia Pacific Chief Economist Alicia Garcia Herrero commented on China’s economy and potential policy measures, saying,
“As there will not be so much support from #exports next year, China will need to introduce some consumption-based stimulus in 2025 to meet an estimated around 4.5 percent GDP growth. If there is no stimulus, the growth could be between 4.1 and 4.2 percent.”
If implemented, stimulus measures targeting consumption could ease concerns about the effect of potential US tariffs on China’s economy. Improving optimism toward the economy may boost demand for Hong Kong and Mainland China stocks.