Nasdaq Futures Plunge Erases Four-Day Rebound
The Nasdaq 100 fell 411 points on October 29 to close at 29403, down about 1.4%, with the Philadelphia Semiconductor Index down about 1.4% in tandem. The market had rebounded for about four days since last week, with earlier views of a bounce after the fall and AI not dead, before sentiment shifted again after Google's results. Amazon reported results after the close, with revenue and earnings slightly below expectations and weak advertising business, its shares at one point falling over 7%. Intel's fourth-quarter guidance came in sharply below expectations, at one point down over 20% after hours and in overnight trading. Dragged by the two, Nasdaq futures at one point fell over 500 points, erasing the past four days of rebound in just a day and a half, returning to near last Friday's lows.
Hong Kong Stocks Diverge as Heavyweights Attract Inflows
On October 30, Hong Kong stocks did not uniformly follow overseas markets. The Hang Seng Index opened up about 52 points at 23011, then briefly turned down, seeing the day's low in the first 5 minutes after the open before rebounding, showing an upward bullish-candle trend, reaching a morning high of 23292, at one point up nearly 300 points, with the tech index turning higher after opening lower. Sector performance diverged, with the real decliners being the AI hardware chain, Lenovo at one point down over 6%, while Kingboard Laminates, SMIC and Hua Hong also fell about 4% to 6%. Heavyweight stocks instead saw capital inflows, with AIA opening higher then rising nearly 4%, while HSBC and HKEX held steady. The market rhythm looked more like overseas pressure on technology with local funds shifting to heavyweights, rather than following the Nasdaq lower.
Backtest: Early-Year Peak Years Often Stabilize in October
The Hang Seng Index saw its full-year high of about 28056 on January 29 this year, then pulled back. Backtesting 2018, 2021, 2022 and 2023, all were years that peaked early in the year then moved lower, with many not stabilizing until October, for example the 2022 and 2018 lows roughly landed near the end of October, followed by a rebound.
Safe-Haven Return Still Awaits Closing Flow Confirmation
This time, with the Nasdaq falling again on AI spending and earnings guidance, if funds treat Hong Kong stocks as a relative safe haven, it is easy to recall the scene in July this year, when US AI hardware was under pressure while the Hang Seng Index instead recorded a double-digit gain, with funds also rotating from hardware to internet and large-cap stocks. Of course history does not repeat mechanically, and whether this counts as a safe-haven return still depends on closing fund flows, heavyweight performance and early-November market conditions, and whether the gains can hold. With bullish voices on the Nasdaq rebounding after its fall and bearish voices on Hong Kong stocks loud early in the week, whether market sentiment can allow Hong Kong stocks to rebound higher as the backtest data suggests is worth watching.