Trend Notes | Bear King Michael Burry hits the nail on the head pointing out the Hang Seng Index's fatal flaw

Hong Kong stocks are falling hard—so hard it hurts. On Friday (June 26), bodies were everywhere. In a special article, Michael Burry, from the movie The Big Short, pointed out the weak spot of Hong Kong stocks: “Hong Kong stocks are falling sharply because the chip narrative is pulling funds out of Hong Kong and pushing them toward South Korea and Japan.” At present, the market has increased its projections for the likelihood of a U.S. rate hike. If that happens, changes in the Hong Kong–U.S. interest rate spread will further drive capital out of Hong Kong stocks.
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