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[Weekly Market Insights] Wash's testimony releases dovish signals, how far is the policy shift?

Guide to this week's strategies for the US and Hong Kong markets:

Semiconductors lead Nasdaq surge, how to seize the repricing window in US stocks?

Hong Kong stocks continue to fluctuate, is the valuation repair logic still valid?

[Live Broadcast Reservation] Today at 16:30 PM, Futu's Chief Investment Research Expert will join you to look ahead at this week’s market and decode CPU investment opportunities!

Intel Surges 20% in a Strong Comeback: How to Seize the Opportunity for CPU Value Reassessment?

[I. Macroeconomic Observations]

1.1 International Macroeconomic:

Wash attended the hearing; can rate cuts and balance sheet reduction become the Fed's new policy stance?

Wash stated during the hearing,Trimmed mean and median inflationare better indicators of underlying price pressures than core inflation, with a dovish bias. He also reiteratedsupport for balance sheet reduction, reducing FOMC over-communication and forward guidance, and establishing a new inflation frameworkWait and see.

The market widely believes that Wash's appointment will bring a dovish interest rate policy inclination, but uncertainty about the short-term policy direction will continue to weigh on market expectations. AdditionallyThe possibility of implementing the 'significant balance sheet reduction in exchange for rate cuts' plan is extremely low.：

First, the ample reserves framework enjoys high support within the Fed;

Second, the Treasury can offset the impact of balance sheet reduction by adjusting the structure of debt issuance;

Third, raising long-term interest rates will push up mortgage rates, exacerbating housing affordability issues, and lacks political support.

Overall, the Fed’s policy path has marginally improved in the short term, but a significant decline in interest rates is not yet on the horizon.

$iShares 20+ Year Treasury Bond ETF (TLT.US)$$U.S. 10-Year Treasury Notes Yield (US10Y.BD)$$U.S. 20-Year Treasury Bonds Yield (US20Y.BD)$

1.2 Domestic Macroeconomics:

Marginal improvement in fiscal revenue; can the signals of consumption recovery be sustained?

In the first quarter, national general public budget revenue increased by 2.4% year-on-year, while expenditure rose by 2.6%. Fiscal data for March showed notable improvement: general fiscal revenue grew 6.9% year-on-year, up more than 6 percentage points from February; tax revenue increased 9.1% year-on-year, rebounding by 9 percentage points from February. Domestic value-added tax and excise tax both marginally recovered, and personal income tax rebounded significantly. However, real estate-related taxes and state-owned land transfer fees fell 24.4% year-on-year, dragging down performance.Local fiscal balance pressure remains significant.。

On the RMB exchange rate, trade fundamentals and strong corporate foreign exchange conversion intentions provide support.The RMB still has room for short-term appreciation.Currently, our country is in a window period of low tariff rates, with export resilience expected. Banks’ foreign currency deposits remain at $1.1 trillion, indicating high potential for foreign exchange conversion, further solidifying the RMB exchange rate's relative strength.$USD/CNY (USDCNY.FX)$

[Section Two: Market Views]

2.1 US Stock Market

The Nasdaq rose 1.5% in a week. How to seize the repricing window?

$S&P 500 Index (.SPX.US)$ For the whole week, it rose 0.55%,$NASDAQ 100 Index (.NDX.US)$ Up 1.5%, capital flowed into semiconductors, technology hardware, and energy, while flowing out of software and services, concentrating on tech assets that provide earnings certainty and long-term growth narratives.

US stocks remain cautiously bullish in the short term, currently in a repricing window driven by improved geopolitical expectations, stable long-term interest rates at high levels, and earnings reports validating growth logic.At the index level, it is not advisable to linearly extrapolate to new highs across the boardbutThe Nasdaq, semiconductors, and Mega Cap Techstill have a relative performance advantage, prioritizing allocation to the AI theme, semiconductors, and large-cap tech with strong earnings realization capabilities.

Anthropic's annual recurring revenue has risen to approximately $30 billion currently,The AI investment thesis has shifted from thematic development to revenue realization.The S&P 500 forward 12-month P/E ratio is 21.56 (as of April 23), and if subsequent earnings reports fail to consistently exceed expectations, or if geopolitical tensions worsen again, volatility in broad-based indices could significantly increase.

Focus Stocks -$Vertiv Holdings (VRT.US)$ ：Core beneficiaries of the global AI infrastructure wave.At the beginning of this year, the company's order backlog reached 15 billion US dollars, and it is expected to exceed 21 billion US dollars by early 2027, significantly higher than the revenue guidance of 14 billion US dollars for 2026.

The continuous increase in power density of AI servers is drivinga nonlinear surge in demand for liquid cooling and power management.NVIDIA’s next-generation Rubin chip density is about four times higher than Blackwell Ultra, and the rack power of Feynman chips by 2028 is expected to reach 1,000 kW, seven times the current level, creating unprecedented demands on data center power and thermal management.

Vertiv is expanding production globally: after the completion of two new factories in South Carolina, regional capacity will increase approximately sevenfold, and power-related capacity at the Mexico factory will rise by about 45%. In terms of valuation, the forward two-year price-to-earnings ratio is 28.5x, at a one-year historical -1 standard deviation level.If demand for AI infrastructure continues to materialize, the current valuation remains attractive.

2.2 Hong Kong Stock Market

The Hang Seng Index edged lower; how much room is there for recovery within the volatile pattern?

The Hang Seng Index fell 0.7% for the week, with average daily turnover at HKD 233 billion, down HKD 4 billion from last week, while southbound Stock Connect recorded cumulative net inflows of HKD 16.8 billion. Southbound funds reduced positions in Hang Seng Tech but added to dividend stocks via Stock Connect; semiconductors, hardware equipment, and household goods led gains, while autos and auto parts led declines.

Repeated geopolitical disturbances and overseas liquidity constraintsare suppressing the pace of risk appetite release, but the potential upside for Hong Kong stocks still outweighs downside risks. Once clear signs of easing geopolitical tensions emerge, the dissipation of risk premiums will rapidly translate into upward momentum.Hong Kong-listed technology stocks remain the main theme of the rebound, while dividend assets are a core allocation.

Chip stocks performed strongly on April 24,$HUA HONG SEMI (01347.HK)$ /$SMIC (00981.HK)$Surging over 15%/10% in a single day respectively, southbound funds net purchased HKD 3.46 billion worth of stocks that day, showing capital inflow back into the technology growth sector amid adjustments. The peak lock-up period in March has passed.and April is the month with the smallest lock-up size for Hong Kong stocks this year, significantly reducing supply-side pressure.The Hang Seng Index's forward 12-month P/E ratio stood at 11.57 (as of April 24), making it an attractive valuation.

Focus Stocks -$MUYUAN (02714.HK)$: The world's largest hog farming enterprise. Relying ona vertically integrated model of full-chain self-breeding and self-raising,the company has built the deepest cost moat within the industry.The hog farming industry is currently in the second bottom-probing stage of deep losses, and the cycle bottom may have been established in April 2026.

Amidst deep losses across the entire industry in Q1, the company kept its fully-loaded costs controlled at RMB 11.5-12.0 per kilogram, with a per-head loss of only RMB 50-60.Significantly lower than the industry average loss level of 119 yuan. Core advantage: The proportion of soybean meal in the self-developed feed formula is only 7.3%, significantly lower than the industry average of 10%-17%, effectively mitigating the risk of rising feed raw material costs.

Based on a biological cycle of approximately 10 months, the destocking initiated in September 2025 will likely result in supply contraction and price improvement more evident in the second half of 2026. Combined with an optimized capital structure following the Hong Kong stock listing and the launch of slaughtering and overseas operations as the second growth curve, there is potential for cyclical recovery.In the short term, focus should be on the progress of industry capacity reduction in Q2-Q3 and the timing for hog prices to bottom out and rebound.

[III. Focus for This Week]

[4. Major bank views]

US Stock Summary:The US stock market remains cautiously optimistic in the short term, with sector performance expected to outpace index performance, driven by improved geopolitical expectations, stable long-term interest rates at high levels, and earnings reports verifying growth logic during a repricing window.At the index level, it is not advisable to linearly extrapolate to new highs across the board, considering the significant rebound from recent lows and that while geopolitical tensions have eased considerably, uncertainties remain.Before regaining upward momentum, the US stock market will likely enter a short-term consolidation phase.The technology sector remains the growth engine, with earnings growth expected to significantly outperform the broader market; prioritize AI-focused investments, semiconductors, and Mega Cap Tech.

Hong Kong Stock Summary:Repeated geopolitical disruptions and overseas liquidity constraints suppress the pace of risk appetite release. If US-Iran relations evolve along a path of fighting while negotiating, Hong Kong stocks' upside potential will still outweigh downside risks. Improvement in China's macroeconomic data, coupled with easing competition in the food delivery sector and the launch of DeepSeek or new large-scale models, could all contribute to valuation recovery.Overweight raw materials, industrials, healthcare, and technology growth in the China market; underweight real estate-related sectors. Hong Kong-listed technology stocks remain the main rebound theme, dividend assets are core holdings, and a barbell strategy is currently the optimal choice.

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