The trend of Hong Kong stocks last week was still dominated by overseas interest rate expectations. After an extreme one-sided pessimistic interpretation, the US non-agricultural sector was far below market expectations and the unemployment rate rose on Friday. Expectations of interest rate hikes in the October market fell sharply. Subsequent markets may usher in a short-term recovery against the backdrop of 10/8 restoration of the southbound channel and high-frequency data for travel on the 11th filling the fundamental vacuum. However, it should be noted that the “higher and longer” interest rate center has not wavered, and the trending inflection point between macroeconomic policies and corporate profits has not yet been confirmed, so a mid-term turnaround may not yet occur. We recommend structural responses, offense and balance, rather than chasing beta. In terms of allocation, oil prices and US bond yields are still the main contradictions that limit Hong Kong stock valuations and repair space. Dividends continue to be used as bottom positions, mainly for operating assets such as railways, highways, and ports. Innovative pharmaceuticals and CXO leaders have an advantage and resonate with China and the US, and can continue to be held, focusing on stock selection and take-profit opportunities; overseas technology and hardware sentiment is picking up but is concentrated on a few giants with strong catalysis. Hong Kong stocks are dominated by domestic chains, so we still have to wait for a trend to increase.

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