Ge Long Hui·2025-05-20 01:27Global Market Overview - Last week, global stock markets experienced a broad rally, with MSCI global index rising by 4.2%, MSCI developed markets up by 4.3%, and MSCI emerging markets increasing by 3.0% [2] - In developed markets, the Nasdaq index showed the strongest performance with a gain of 7.2%, while the Nikkei 225 had the weakest performance with only a 0.7% increase [2] - Emerging markets saw the Taiwan Weighted Index perform best with a 4.4% rise, while the Shanghai Composite Index lagged with only a 0.8% increase [2] Sector Performance - Financials, consumer discretionary, technology, and materials sectors led the performance in global stock markets [10] - In the Hong Kong market, financials and industrials were the top performers with increases of 3.8% and 2.8% respectively, while utilities and real estate sectors underperformed [10] - In the US market, information technology and consumer discretionary sectors led with gains of 8.1% and 7.7% respectively, while healthcare and real estate sectors lagged [10] Trading Volume and Investor Sentiment - Trading volumes across major markets showed a significant increase, with the Hang Seng Index trading volume rising to 180 billion shares and $718 billion, while the S&P 500 saw a trading volume of 46 billion shares and $56.769 billion [13] - Investor sentiment in the Hong Kong market remains high, with short-selling ratios slightly increasing to 13.3%, while the North American sentiment is also at elevated levels [13] Valuation Metrics - Developed markets' valuations improved, with the latest PE and PB ratios at 22.6x and 3.7x, respectively, indicating high valuation levels compared to historical data [19] - In emerging markets, the latest PE and PB ratios were 15x and 1.9x, showing a decrease from the previous week [20] - Specific sectors in Hong Kong, such as healthcare and real estate, showed the highest PE valuations at 42.5x and 34.5x, while financials and energy sectors had the lowest [22] Earnings Expectations - Earnings expectations for global markets were mostly revised upwards, with the Hang Seng Index's 2025 EPS forecast adjusted from 2209 to 2215 [25] - The S&P 500's EPS forecast remained stable at 265, while the Eurozone STOXX50 index's EPS forecast was unchanged at 348 [25] Global Liquidity Conditions - Global liquidity conditions tightened marginally, with interest rates in major economies like the US, China, and Europe showing an upward trend [31] - Market expectations for interest rate cuts by central banks have been delayed, with the implied rate for the Federal Reserve indicating 2.0 cuts this year, down from previous expectations [31] Economic Outlook - The economic outlook for Europe showed marginal improvement, with the Eurozone manufacturing PMI at 49% and service PMI at 50.1%, indicating stability [42] - In contrast, the US economy showed signs of a slight downturn, with the manufacturing PMI at 48.7% and service PMI at 51.6% [39][40] - The economic surprise indices indicated a positive shift for Europe while showing a decline for the US, reflecting differing economic conditions [44]