Hong Kong stocks closed higher, led by healthcare, conglomerates, and real estate/construction sectors, while discretionary consumption, industrials, and materials underperformed. Net southbound inflows totaled HK$4.29 billion, with XIAOMI-W (01810), XPENG-W (09868), and POP MART (09992) seeing the largest net purchases, while BABA-W (09988), HUA HONG SEMI (01347), and SMIC (00981) recorded the most net selling.

Mainland A-shares declined, dragged by electrical equipment, machinery, and software services, though diversified industrials, home appliances, and petrochemicals outperformed. Government bond yields stabilized, while the RMB strengthened against the USD.

Chinese equities underwent a sector rotation, with undervalued or previously lagging sectors—such as chemicals, consumer goods, and banking—leading gains, while high-flying sectors retreated. This trend may persist until mid-December, when next year’s policy priorities become clearer.

US stocks edged up, supported by healthcare, financials, and materials, while energy, communication services, and discretionary consumption lagged. The end of the federal shutdown and easing liquidity conditions boosted risk appetite. However, concerns over an AI bubble triggered a shift from tech to value stocks, with the Dow Jones outperforming the Nasdaq. Warren Buffett’s acquisition of OxyChem further fueled this rotation.

US Treasury yields continued to decline, and the USD retreated after an earlier rally. Notably, US subprime auto loan delinquencies (60+ days overdue) hit a record 6.65% in October—the highest since 1994—highlighting rising financial stress among low-income borrowers.

Recent unofficial data suggests weakening employment, softening consumption, and moderating rent and oil prices, pointing to near-term disinflation rather than a rebound. This raises the likelihood of the Fed cutting rates twice within the next six months.