The rise in US interest rates led to the appreciation of the US dollar against a variety of currencies. The US dollar index reached a peak at 105 once. It has been an increase of 7.5% from the low of 97.68 in April. As a result, the US stock fell for the 8th consecutive week. And it stabilized the Dow and S&P 500 as low as 30,635.76 and 3,810.32 respectively. But at the time of writing, they were still 2.6% and 3.7% lower than the previous month's closing price. If readers follow the advice of "Sell in May and go away", they should be able to "avoid a disaster". The problem facing the US stock is that inflation remains high. In April, the CPI rose by 8.3% year-on-year, and the core CPI rose by 6.2% and is far from market expectations and still at a 40-year high. Therefore, avoiding a "hard landing" for the US economy has become the top priority. In the minutes of the Fed meeting, it is difficult for US stocks to perform well in the short term under the situation that all officials support the reduction of the balance sheet, and most officials support the increment of interest rates by 0.5% in Fed's next meeting. In the same way, the upward trend of gold prices will continue to restrain.

On the other hand, virtual currencies that advertise "decentralization" also dropped sharply while the risk aversion was heating up. In addition to the epic collapse of the LUNA coins on will small scale, leading products such as ETH and Bitcoin are also implicated. In fact, besides the problems caused by individual algorithmic stable coins, the virtual asset market itself lacks liquidity and relies on specific exchanges to provide liquidity. With factors such as insufficient supervision and safety, a "bank run" is easy to occur when the market is full of negative emotions. It is difficult to change into the US dollar, and it caused the early increment in the US dollar to a certain extent. The epic collapse of the LUNA coin proves that the so-called "stable coins" are not stable at all, and it is entirely caused by an underestimation of the investors on the relevant risks. In any case, the popularity of short-term "coin speculation" will cool down. It is very usual that "people always repeat the same mistakes". All we can do is minimize the chances of making mistakes and diversifying risks.

The volatility of Hong Kong stock weakened in May, and the trend was similar to the author's expectation last month. At the beginning of the month, it reached a high of 21,291, and it gradually entered a pattern of contention near the MA20 after a low test of 19,178. It reached 20,145 at the time of writing. However, the valuation of Hong Kong stocks is far lower than that of US stocks, and the appreciation of the Hong Kong dollar along with the US dollar is a very good opportunity for foreign investors to earn money. Moreover, the impact of the closure of the mainland on the economy is gradually decreasing. Under the situation that the local financing cost is still low, the inflow of funds into Hong Kong stock is an ideal choice, which can earn both the exchange rate and the price. Therefore, the author expects that there will be an alleviation in downward pressure in the future.

Even though the Hang Seng Index is still below the 20MA at 20,287, the width of the Bollinger Bands has narrowed. The MACD trend further improved and gradually stabilized at 20,000. There is a large triangle pattern formed in the range of 18,235 - 22,523 and expected that a more obvious direction will happen in June and the chance of turning positive is slightly higher. However, the export stocks with RMB as the main cost should be a better investment target when the US dollar is still strong. Instead, shares with the mainland as the main market will be relatively weak and they need particularly favourable policies by the central government for a better trend.

As for the green bond (4252), the subscription response was quite satisfactory, but the final rise will be a slight loss due to the impact of the sharp rise in US bond yields during the same period. From the author's point of view, a bond price slightly lower than 100 is not a big problem. It is almost impossible for investors to find a "stable" deposit with a return of more than 2.5%. Comparing the Hong Kong government bonds with the same maturity, the yield is less than 1.9%, not to mention the low-interest rates obtained by deposits in banks! Therefore, the current price is actually a very ideal buying price if you have spare money that can be stored for a long time.

The performance of Hysan (0014), which was introduced last month, was as expected. Although it fell with the market trend and hit a low of 21.80 dollars during the month, it turned around in a single day and later reached a high of 24 dollars. The shares were more than 2% higher than that at the end of April. As mentioned last month, the company and HKRI (0480) project will be for sale, so still can hold it.

As for this month, I chose Techtronic (0669) according to the strategy of being optimistic about US dollars. Techtronic is mainly engaged in the two major businesses of power tools, floor care and cleaning. By the end of last year, the company's revenue from North America accounted for more than 77%. Among the "export stocks" listed in Hong Kong, sales in North America accounted for the highest proportion of total turnover.

Among them, the largest customer, "Home Depot" contributed a total turnover of US$6.275 billion (about 47.5% of the annual revenue). Home Depot announced a 3.8% year-on-year increase in net sales in the first quarter of this year and raised its full-year performance guidance for this year, which is positive for Techtronic in the first half of the year. On the other hand, the company has achieved a high turnover record for 12 consecutive years, and its gross profit margin has increased for 13 consecutive years. Obviously, the industry is in the growth stage. After the sharp adjustment of the stock price in recent months, the current valuation is relatively much more attractive. Company strategy plans to increase inventory that reduces the risk of a tight supply of raw materials and rising prices. The current price-earnings ratio is about 20 times, and it can still be held at the midline if it does not fall below 90 dollars.

Kay Ho (CE No.: ANV293)

Acer King Capital Hong Kong Limited

Statement: The author is a licensee of the 1st, 4th, and 9th types of licenses of Securities and Futures Commission, SFC. Acer King securities Limited and Acer King Capital Hong Kong Limited are affiliated companies of Hantec Group and were invited to contribute articles in Hantec Group's monthly newsletter. The writing does not represent the position of Hantec Group. As the author does not personally hold the above-mentioned shares, investors should exercise caution when buying or selling relevant securities and investment instruments.