US markets stabilised last night following a big pullback the previous day. Will Trumponomics continue to support this bull market? This is probably the biggest question facing the market right now. 

As the prospect of the White House passing a major tax cut or infrastructure plan any time soon seems unlikely, the market is now focusing on the current healthcare policy proposed by the Republican Party, to replace ‘Obamacare’ with 'Trumpcare'.  

Debates heated up surrounding the controversial plan due to concerns that the new healthcare policy might considerably increase health insurance premiums for millions of US residents, especially the elderly. Meanwhile, market participants stated to question the credibility and capability of the new administration to fulfil its promises on fiscal stimulus and tax reform plans. This resulted in profit-taking over the past two days. 

The Hong Kong market is now at the peak of earning season. The recent rally in the Hong Kong stock market was backed by upbeat earnings forecast, stablisation of China’s economy and ample liquidity. Yesterday, Tencent (700 HK) and Ping An Insurance (2318 HK) announced their earnings, both beating market consensus. 

Hong Kong-listed China enterprises have long been traded below their market value in the A-share market, creating an ‘A-H Premium’ gap. The gap is now narrowing down to around 13% from 30% a year ago, as more capital is flowing to Hong Kong to take advantage of the valuation gap. 

Technically, the Hang Seng Index has entered into a correction phase this week, with immediate support and resistance levels at 24,170 and 24,570 respectively. 

Hong Kong 50 - Cash

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