There are more variables in Hong Kong stocks. There are still downside risks. The stock market has a long-term resistance to the stock market.

The PBOC pushed the counter-cyclic factor on Friday to stimulate the yuan’s rebound, which will bring support to the market in the short-term. However, Guo Qiangsheng, head of equity strategy at Morgan Stanley Asia and Emerging Markets, which accurately predicts the direction of Hong Kong stocks at the beginning of the year, believes that the market is still full of uncertainties, unless the two major trends change: (1) China’s economic recovery and (2) the United States The pace of interest rate hikes will slow down, otherwise the market outlook will continue to decline.

The economy in the Mainland needs to stabilize, and the interest rate hike needs to slow down.

The investment team headed by Jonathan Garner, ranked first in the stock strategy in the All-Asian Research Team Rankings of Institutional Investor Weekly this year. In an exclusive interview with the newspaper, he said that in July, a series of economic data in China fell, consumer confidence weakened significantly, and the US dollar rose, the currency depreciated, and the possibility of further deterioration of the Chinese economy, so the bank We are closely watching China’s attitudes in fiscal and monetary policy, as well as indicators such as the credit environment and market liquidity.

In order to stabilize market confidence, the PBOC restarted the counter-cyclic factor on Friday, and the RMB rushed. The blue-chip stocks also maintained their upward trend in the ADR. If the Hong Kong stock market opened today, the Hang Seng Index opened up about 197 points. The short-term market is expected to be stable, but the uncertainties are still mixed, and the outlook is still slightly weak.

Guo Qiangsheng believes that the stock market has never been in a straight line, but Hong Kong stocks are more vulnerable to China’s economic slowdown, tight liquidity, and downward pressure on corporate earnings forecasts. Therefore, the downside risks of the market still exist. He stressed that only if China’s macroeconomic data improves, commodity prices stabilize, or the Fed’s rate hike is not as aggressive as market expectations, will it be more optimistic about the market.

Emerging market stocks have fallen 20% from their January highs, and they have entered a bear market technically, while the Turkish currency Lira’s earlier rush has triggered market worries about a new round of emerging market crises. “Reference to the performance of the emerging markets in the bear market in recent years, from the high level in 2015 to 2016, the price dropped by more than 30%. In 2011, the adjustment was also more than 30%. In 2008, the adjustment was the deepest, exceeding 50%. The scenario is a 28% drop.”

Guo Qiangsheng said that he does not like to use the word “crisis”, but the emerging markets as a whole are in a difficult period. As US interest rates are rising, the dollar is expected to rise. Some Asian central banks have begun to raise interest rates to cope with the impact of the appreciation of the dollar on capital outflows. I believe there will be more countries to follow.

Refers to the bear market in emerging markets, which is expected to fall by 28%.

On the 16th of this month, the company will cut the target price of the HSI in June next year to 25,900 points, with a potential decline of about 6.4%. Guo Qiangsheng said that the current market of the HSI is not strong and is plagued by six major risks. Three of them have a relatively large impact on Hong Kong stocks, namely: (1) the strong US economy and the Fed’s interest rate hike push up the US dollar; The economic growth slowed down, and the global PMI index and copper price both fell in July; (3) China’s liquidity deteriorated further, and there was no indication that the credit environment of domestic enterprises had improved.

He pointed out that the funds are being redrawn from the Asian shares and flowed to the developed countries. The current outflows only account for about 20% of the total inflows last year. It is expected that the funds will continue to withdraw from the emerging Asian shares.