Hong Kong’s stock exchange reported its highest quarterly profit in nearly four years after China’s stimulus measures boosted trading and listing volume.
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BEIJING — Mainland Chinese investors are piling into the Hong Kong stock market at record volumes as its tech-heavy Hang Seng Index trades around three-year highs.
Net mainland Chinese purchases of Hong Kong stocks hit a record 29.62 billion Hong Kong dollars ($3.81 billion) on Monday, according to the Wind Information database.
That was the most since the Hong Kong stock market launched its “connect” program with the mainland, allowing local investors easier access to a select number of stocks traded offshore. The Shanghai Connect launched in November 2014, while the Shenzhen Connect opened in December 2016.
The Hang Seng Index traded around 0.7% lower Tuesday morning following a sharp sell-off in U.S. stocks overnight on worries about the impact of tariffs on global growth.
Net buys via the Shanghai Connect reached nearly 18 billion HKD on Monday, while those from the Shenzhen Connect reached 11.63 billion HKD, the data showed.
Hong Kong-traded shares of Alibaba and Tencent, both of which are not traded in mainland China, saw the largest net purchases, according to Wind data.
China last week affirmed its pro-growth stance by emphasizing plans to support private sector tech innovation, and increasing its fiscal deficit to a rare 4% of gross domestic product — including an expanded consumer subsidies program.
Citi’s global macro strategy team on Monday upgraded its view on Chinese stocks — namely the Hang Seng China Enterprises Index — to overweight, while downgrading the U.S. to neutral.
“One key reason why we have not been focused on Chinese equities is tariff risk,” the analysts said.
“Abstracting from this issue, we believe the case for China tech was clear. A) DeepSeek proved that China tech is at the Western technological frontier (or beyond), despite the export controls. This was followed by the release of Tencent’s Hunyuan (an AI video generator) and Alibaba’s QwQ-32B,” they added.
“We have seen some degree of consumption boost in the form of what the policymakers have been doing since January. It is not yet to the full extent that the market would like to have but at least it is a departure from the trend of many years,” he continued.
“So, right on top of my list, it would still be Hong Kong, China, the internet stocks, the large internet platforms and also some of the consumption-related names, mostly in athleisure, the restaurant stocks and other travel and tourism-related names,” Raychaudhuri said.
— CNBC’s Sam Meredith and Anniek Bao contributed to this report.
New York Attorney General Letitia James speaks during a press conference at the office of the Attorney General on July 13, 2022 in New York City.
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A group of 42 state attorneys general are calling on Meta to curb the rise of investment scams on Facebook that fraudulently use the images of Warren Buffett and other famous figures, New York Attorney General Letitia James said Wednesday.
James said in a news release criminals are consistently evading Meta’s automated and human review systems to post fake ads that leave retail investors saddled with millions of dollars in losses. Her office continues to see the scams months after reporting them to Meta, she added.
The ads, touting access to Buffett, Elon Musk or Ark Invest’s Cathie Wood, lure Facebook users to join chat groups on Meta-owned messaging platform, WhatsApp, according to the New York AG.
There, users are unwittingly involved in alleged pump-and-dump schemes, where criminals boost the price of thinly traded stocks and quickly sell for a profit, leaving small investors with losses.
Meta, the parent company of Facebook, Instagram and WhatsApp, is struggling to control the rise of cyber scams on its platforms and is a “cornerstone of the internet fraud economy,” the Wall Street Journal reported last month. The problem is global in nature, with one notable lawsuit being brought by an Australian billionaire who alleges that Meta’s artificial intelligence-run advertising program created and amplified false ads using his likeness.
“Thousands of Facebook users have lost hundreds of millions of dollars to these scams and Meta must do more to stop these fraudulent ads from running on its platforms,” James said. “I am leading a bipartisan coalition calling on Meta to step up its review of ads to stop these scams. I also urge all New Yorkers to be extra careful before putting their money in investments they see advertised on social media.”
Source: New York State Attorney General’s office
The AGs urged Meta to boost its policing of ads, including with more human review, saying that unless they curb the scams, Meta should stop running investment ads altogether.
Joining James were AGs from states including California, Connecticut, Georgia, Massachusetts, Michigan, New Jersey and Pennsylvania.
Check out the companies making the biggest moves midday: Oklo — The advanced reactor company surged more than 25% after receiving a notice that it will likely win an award to power an Air Force base. Oklo would deploy one of its Aurora powerhouse plants at Eielson Air Force Base in Alaska. The award is not finalized and Oklo’s reactor design has not been approved by the Nuclear Regulatory Commission yet. GameStop — Shares slipped nearly 5% after GameStop posted first-quarter revenue of $732.4 million, down from the $881.8 million figure seen in the same period a year prior. Bread Financial — The fintech’s stock jumped 5% as key credit indicators showed improvement in May. The company’s net loss rate fell to 8.0% from 8.8% in May 2024, while its delinquency rates also improved, easing to 5.7% in May from 5.9% a year ago. Tesla — The electric vehicle maker rose 1%, on track for its fourth straight winning day. Shares cratered last week following CEO Elon Musk’s online feud with President Donald Trump. Musk said on Wednesday that he regrets some of the social media posts he made regarding Trump. The stock also got a bump after Musk touted the company’s robotaxis overnight. Chewy — The pet-focused e-commerce retailer tumbled 10% after posting 15 cents in earnings per share for the first quarter, missing the consensus forecast of 20 cents from analysts polled by LSEG. On the other hand, Chewy saw $3.12 billion in revenue, exceeding Wall Street’s prediction of $3.08 billion. Quantum computing — Quantum computing stocks advanced after Nvidia CEO Jensen Huang said at a developers conference that the space was reaching an inflection point . Shares of Quantum Computing surged 24%, while Rigetti Computing soared about 17%. Lockheed Martin — The defense contractor slumped about 5% after the Pentagon cut its request for new F-35 fighter jets in half, to 24 planes from 48, according to Reuters, citing news first reported by Bloomberg. Sunrun — The solar stock dropped nearly 3% after a Jefferies downgrade to underperform from hold. Jefferies said the company could face headwinds if residential solar initiatives do not make the federal budget. Steel stocks — Shares of U.S. steelmakers dropped after Bloomberg and Reuters reported, citing sources, that the U.S. and Mexico are nearing a deal to remove President Donald Trump’s 50% tariffs on steel imports up to a certain volume. Cleveland-Cliffs fell more than 9%, while Nucor and Steel Dynamics dropped more than 5% and 2%, respectively. GitLab — The online software developer platform dropped more than 8% after the company issued a disappointing revenue forecast. GitLab sees second-quarter revenue ranging between $226 million and $227 million versus the LSEG consensus estimate of $227 million. Goldman Sachs — Shares advanced about 2% after Bank of America highlighted a rosy outlook for the investment bank. Analyst Ebrahim Poonawala noted that Goldman is well positioned to handle a shifting macroeconomic backdrop, noting that it has the “proven DNA to adapt to an ever-changing world.” BofA has a buy rating on the stock and a $700 price target. Dave & Buster’s — Shares jumped more than 14% after the company’s comparable sales fell less than expected. “We are encouraged by what we are seeing so far in June as results month to date continue to improve,” Kevin Sheehan, interim CEO, said in a statement .
The annual inflation rate increased slightly in May as an uptick in grocery inflation somewhat offset lower prices at the gasoline pump.
And while inflation was relatively tame, economists said they expect President Trump’s tariff policy to raise consumer prices in coming months — and that there was already some evidence of their impact.
The consumer price index, an inflation barometer, rose 2.4% in the 12 months through May, up from 2.3% in April, the Bureau of Labor Statistics said Wednesday.
The monthly inflation rate paints a rosier picture and gives a better indicator of underlying trends, economists said: CPI increased 0.1% from April to May, down from 0.2% the prior month, the BLS said.
A consistent monthly rate around 0.2% would generally be adequate to bring inflation down to the Federal Reserve’s long-term target, economists said.
“It was a very good report,” said Mark Zandi, chief economist at Moody’s. “Basically, it says inflation has finally gotten back to the Federal Reserve’s annual inflation target.”
However, tariffs President Trump levied on many countries and products will likely start to show up noticeably into the summer and fall, he said.
“I think it’s the calm before the inflation storm,” Zandi said. “This [report] still reflects the disinflation that began a few years ago and continued on through the month of May.”
Housing inflation has also moderated, an important element since the category is the largest component of the consumer price index, economists said.
Indeed, monthly inflation for rent and “owners’ equivalent rent” (a rent measure applied to homeowners) have “returned to their pre-pandemic norms,” Stephen Brown, deputy chief North America economist at Capital Economics, wrote in a research note Wednesday.
These trends together signaled “a steady downtrend in inflation” back to the Fed’s long-term target at least by the end of this year or early next year, Oxford Economics’ Yaros said.
The Yale Budget Lab estimates the average U.S. household would pay about $2,500 more in 2025 due to tariff policy in effect as of June 1.
There were some early signs of tariff impacts in the May CPI report for people “looking through a microscope,” Brown wrote.
For example, major appliance prices jumped 4.3% for the month, and toy prices by 2.2%, he wrote, citing CPI data.
“Unless all retailers are raising prices at the same time, it may trickle not flood into the data,” Elizabeth Renter, senior economist at NerdWallet, wrote Wednesday.