After experiencing a short period of increase, the Hong Kong stock market has gradually softened recently. FSMOne stated that the rebound in the mainland and Hong Kong stock markets in the past two months was mainly benefited from China's new round of real estate support measures and GDP data. The target price for Hong Kong stocks is still maintained at 18,500 points, while the US economy remains strong and is unlikely to cut interest rates this year. Chen Jianhao, Portfolio Management Manager of FSMOne (Hong Kong), stated that based on a target P/E ratio of 9, the target price for the Hang Seng Index in 2024 is 18,500 points, continuing the pattern of "fluctuations without increases." He mentioned that the upside and downside potential of Hong Kong stocks is limited, and the mainland government may implement a series of favorable policies to drive rebounds at low points, but not for a long-lasting upward trend. Chen Jianhao also mentioned that the recent rebound in the mainland and Hong Kong stock markets in the past two months was mainly due to China's new round of real estate support measures and better-than-expected GDP data. Although the proactive attitude of the mainland government to support the market has provided some support to the overall mainland and Hong Kong stock markets, the recent introduction of the 517 new policies released a positive signal of government market rescue, but it has not fully reflected in the fundamentals. The real estate sector still faces five major challenges: sluggish sales; discounted sales; financing difficulties; rigid expenses and taxes for completed projects; and the inability to use presale regulation funds for debt repayment. Looking ahead to the second half of the year, Chen Jianhao expects that inflationary pressures in the US will remain high and are unlikely to fall to the target level of 2% in the short term. The escalation of geopolitical tensions in the Middle East, as well as the strong momentum of the US economy, will lead to sustained high inflation for a longer period. If the Federal Reserve acts prematurely to cut interest rates while the economy remains robust, it may lead to the risk of inflation getting out of control again. Therefore, the Fed is expected to maintain a cautious stance and will not easily cut interest rates until inflation is fully under control. Shi Jiasong, Assistant Research Manager of the Global Bond Department of FSMOne (Hong Kong), stated that the current high inflation is likely driven by structural factors. Factors such as rising rents, wages, commodity prices, deglobalization, and geopolitical tensions will keep inflation rates high, and high bond yields and interest rates are expected to be maintained for a longer period, with no guarantee of a rate cut this year. Overall, FSMOne stated that the Federal Reserve is unlikely to cut interest rates in 2024. FSMOne (Hong Kong) has also selected multiple funds for a recommended core portfolio. Details are as follows: