Top traded counters in October 2023 November 16, 2023

Top traded counters in October 2023

Start trading on POEMS! Open a free account here!

The market at a glance:

  • The start of the conflict between Israel and Hamas led to higher oil prices
  • The Federal Reserve (FED) committed to its 2% inflation mandate, holding rates within the range of 5.25% to 5.5%
  • 10-year U.S. Treasury yields reached a 16-year high of 5% before retracing downwards
  • NFLX’s move to curb password sharing has boosted subscriber growth


The 3 major indices were headed for 3 straight months of losses in October.

NASDAQ DOW JONES S&P 500
Month Open 13,217.98 33,455.50 4,284.52
Month Close 12,851.24 33,052.88 4,193.81
Monthly return -2.77% -1.20% -2.12%


The last quarter of 2023 commenced amidst the conflict between & Hamas conflict1. In contrast to the Russian-Ukraine war in March 2022, which caused a significant one-day drop of nearly 3% in the S&P 500 index2, the Israel-Hamas conflict did not trigger a widespread market sell-off. This is notable given that the S&P 500 index only fell by 2.12% in October 2023. The market’s relative composure suggests that investors may view the latest conflict as a continuation of long-standing regional tensions, with limited impact on global markets. However, the situation remains dynamic and could evolve as events unfold… As for Russia and Ukraine, they are significant commodity producers and exporters. Hence, their conflict has far-reaching price effects across various resources.

The Israel-Hamas conflict did, however, lead to higher oil prices due to concerns about oil3. With the situation still developing, market implications are being closely monitored.

Federal Reserve Chairman Jerome Powell addressed signs of cooling inflation in a recent speech to the Economic Club of New York. While he expressed the central bank’s commitment to its 2% inflation mandate, he did not outline a specific policy direction or indicate a leaning towards hiking interest rates. This led market traders to subsequently scale back expectations for rate hikes in the remaining months of the year.

In line with traders’ expectations, the Federal Reserve(FED) has decided to maintain its benchmark interest rates of between 5.25% and 5.5%, holding them steady for the second consecutive meeting4. This decision comes as the economy and labour market continues to grow, and inflation rates persisting above the central bank’s target. The Federal Open Market Committee unanimously agreed on this move, following a series of 11 rate hikes in 2023. Despite the rate hikes, the economy continues to perform well, with GDP expanding at a 4.9% annualised rate in the third quarter. The labour market remains resilient, with more job openings than available workers in September. Core inflation is at 3.7%, above the Fed’s 2% target. The Fed’s decision to maintain interest rates suggests that the economy has yet to fully show the full effect of the rate hikes due to the policy lag effect.

The 10-year US Treasury yield briefly exceeded 5%5, a level not seen in 16 years, before receding. This surge signalled significant fluctuations in the global bond markets, which were driven by expectations that the US Federal Reserve would maintain high-interest rates for an extended period. Additionally, concerns about the US government’s large budget deficit and a credit rating downgrade by Fitch Ratings contributed to the pressure on yields. Yields on longer-term US Treasury bonds have risen due to the Fed’s indication of a slower pace of interest rate cuts in 2024 and 2025. Strong US economic data and apprehensions about the government’s borrowing plans have further fuelled the increase in yields.

In the current context of sustained high-interest rates, investing in telecommunications services might be advantageous due to its stability and consistent cash flows. The telecommunications industry is well established, with a low need for loans and with the current high interest rate environment, the industry will be able to minimise any increase in cost due to financing. Additionally, telecommunication services are now considered an essential, providing the sector with a recurring revenue due to the steady demand.


Vanguard Communication Services ETF (NYSE-ARCA: VOX.US)

VOX is an ETF that aims to track the performance of the MSCI US Investable Market Communication Services 25/50 Index6, which emcompasses US companies within the communications services sector. These companies provide communication services primarily through fixed-line, cellular, wireless, high-bandwidth, and/or fiber-optic cable networks. 71% of the ETF holdings are in large capital stocks with the top 3 stocks being Alphabet Inc (GOOG.US), Meta Platforms Inc (META.US), and Comcast Corp (CMCSA.US). VOX was launched on 23 Sep 2004 with an expense ratio of 0.10%. As of 30 September 2023, VOX’s 5-year performance stands at 4.87%.

VOX opened at US$105.35 and dropped by 1.93% to close at US$103.32 in October 2023.

Technical Analysis

Top traded counters in October 2023

Status: Slightly bearish

Support: US$99.50 to US$100.85

Resistance: US$104.85 to US$105.35

The price broke from the previous range area with price rejecting the immediate support zone. The price will have to sustain above US$105.00 for further upside movement, otherwise we should see the price targeting immediate support again.


Fidelity MSCI Communication Services Index ETF (NYSE-ARCA: FCOM.US)

Fidelity MSCI Communication Services Index ETF (NYSE-ARCA: FCOM.US)

FCOM is an ETF that aims to track the performance of the MSCI USA IMI Communication Services 25/50 Index. All securities in the index are classified within the Communication Services sector. The top three holdings are Meta Platforms Inc (META.US), Alphabet Inc CL A (GOOGL.US), and Alphabet Inc CL C (GOOG.US). The ETF is almost entirely invested in US equities, at 99.99%, with the remainder held in cash and other net assets such as fund receivables and fund payables. FCOM was launched on 21 October 2013, featuring an expense ratio of 0.084%. As of 30 September 2023, FCOM’s five-year performance is recorded at 5.64%.

FCOM opened at US$39.79 and declined by 1.73% to close at US$39.10 in October.

Technical Analysis

Top traded counters in October 2023

Status: Slight bearish

Support: US$37.70 to US$38.20

Resistance: US$39.50 to US$39.90

The price broke from the previous range area with the price rejecting the immediate support zone. The price will have to sustain above US$40.00 for further upside movement, otherwise we should see price targeting immediate support again.

Here are some of the more popular US stocks – not ranked in any order – traded by POEMS customers in October 2023.


Tesla Inc (NASDAQ: TSLA)

In October, TSLA reported its Q3 2023 earnings. Earnings per share fell short at US$0.66 compared with the forecasted US$0.73. Revenue totalled US$23.35 billion, slightly below the projected US$24.1 billion.

Elon Musk has announced that the company is endeavouring to reduce the prices of its vehicles. He expressed concerns about high interest rates and acknowledged the impact these have on buyers’ monthly payments. Regarding the Cybertruck, Musk underlined the significant challenges of scaling up production and achieving positive cash flow, projecting a timeline of 12-18 months for these goals. Further details on pricing and specifications are yet to be announced. With initiatives to decrease car prices, alongside concerns about reduced cash flow and the postponed production of the Cybertruck, the forthcoming quarterly performance of TSLA might not be very promising.

In October, TSLA opened at US$244.81 and fell by 17.96% to close at US$200.84.

According to a Phillip Securities Research report dated 23 October 2023, the recommendation for TSLA is to ‘Accumulate’.

Technical analysis

Top traded counters in October 2023

Status: Slightly Bearish

Support: US$180.50 to US$186.80

Resistance: US$210.10 to US$219.00

The price broke from the previous range area with the price rejecting the immediate support zone. The price will have to sustain above US$220.00 for further upside movement, otherwise we should see price targeting immediate support again.


Netflix Inc (NASDAQ: NFLX)

In Q3 2023, NFLX saw substantial subscriber growth, attributed to its anti-password-sharing initiatives and the introduction of a new ad-supported tier. The company added 8.76 million global subscribers, significantly exceeding the forecast of 5.49 million, marking the largest increase since the pandemic in 2020. Earnings per share reached US$3.73, surpassing the anticipated US$3.49, while revenue hit the mark at US$8.54 billion. Total membership soared to 247.15 million, outstripping the projection of 243.88 million.

Looking ahead to the full year of 2023, NFLX now anticipates a 20% operating margin, which is at the upper end of the previously estimated range of 18-20%. For 2024, NFLX is projecting operating margins between 22-23%. These projections signal the company’s growing confidence in its profitability over the coming years, a favourable indicator for investors, as higher operating margins are typically reflective of more robust financial health7.

In October, NFLX opened at US$377.48 and gained 9.06% to close at US$411.69.

According to a Phillip Securities Research report dated 20 October 2023, the recommendation for NFLX is to ‘Accumulate’.

Technical analysis

Top traded counters in October 2023

Status: Neutral

Support: US$400.70 to US$409.00

Resistance: US$445.10 to US$452.30

The share price experienced a strong gap up following the earnings release, resulting in a significant price imbalance between US$350.00 and US$400.00. For further upside momentum, the price must remain above US$400.00. Conversely, a bearish candlestick closing below US$400.00 could indicate a potential retracement towards the US$350.00 to US$370.00 range.


Spotify Technology S.A. (NYSE: SPOT)

In October, SPOT shares surged by 10% following the company’s unexpected third-quarter profit announcement, marking its first profitable quarter in 18 months and outperforming Wall Street’s forecasts. SPOT’s earnings per share were reported at US$0.35, significantly better than the anticipated loss of US$0.23. Revenue reached US$3.56 billion, marginally above the expected US$3.53 billion. The number of premium subscribers also exceeded expectations, totalling 239.6 million against an estimate of 238.4 million.

SPOT’s recent venture into audiobooks marks its latest foray beyond music and podcasts. CFO Paul Vogel has voiced confidence in the positive impact this expansion will have on both authors and consumers. Looking forward, the company anticipates continued profitability into the fourth quarter and through 2024, signalling a pivotal shift. Vogel has underscored his optimism for maintaining consistent quarterly profits.

In October, SPOT opened trading at US$155.29 and climbed by 6.10% to close at US$164.76.

According to a Phillip Securities Research report dated 26 October 2023, the recommendation for SPOT is to ‘Accumulate’.

Technical analysis

Top traded counters in October 2023

Status: Neutral (Range-bound)

Support: US$148.90 to US$159.10

Resistance: US$173.00 to US$180.50

Microsoft Corporation (NASDAQ: MSFT)

Microsoft saw a substantial rise of 6% in after-hours trading following the announcement of its fiscal Q1 results, which exceeded Wall Street’s forecasts. The profit surge was largely due to controlled growth in operational expenses. Standout figures included earnings per share of US$2.99, surpassing the anticipated US$2.65, and revenue of US$56.52 billion, which outperformed the expected US$54.50 billion. Notably, revenue from Microsoft’s key growth driver, Azure, leapt by 29%, exceeding projections.

The company’s strategic cost management was highlighted by an increase of only 1.3% increase in operating expenses, the slowest since 2016. Looking ahead, Microsoft projects around 5% revenue growth in the fiscal second quarter.

Additionally, the company has been expanding its offerings, introducing new cybersecurity services and preparing for the launch of the Microsoft 365 Copilot AI add-on. The recent acquisition of video game publisher Activision Blizzard for US$68.7 billion is expected to influence future financial performance, a point that will likely feature in forthcoming guidance.

In October, MSFT shares opened at US$316.28 and climbed by 6.90% to conclude at US$338.11.

According to a Phillip Securities Research report dated 27 October 2023, the recommendation for MSFT is to ‘Accumulate’.

Technical analysis

Top traded counters in October 2023

Status: Neutral (Range-bound)

Support: US$328.50 to US$332.00

Resistance: US$346.50 to US$352.20

Alphabet Inc (NASDAQ: GOOGL)

GOOGL released key figures from the earnings report in October. The figures revealed earnings per share of US$1.55, which exceeded expectations of US$1.45. The company’s revenue reached US$76.69 billion, surpassing the forecasted US$75.97 billion. YouTube’s advertising revenue performed robustly at US$7.95 billion, outdoing the anticipated US$7.81 billion. However, Google Cloud’s revenue was slightly below expectations at US$8.41 billion, against a projected US$8.64 billion. Traffic acquisition costs were marginally higher than expected, totalling US$12.64 billion, as opposed to the predicted US$12.63 billion. These factors may have contributed to the stock’s nearly 10% decline following the earnings announcement.

The return to double-digit revenue growth marks a significant turnaround after four consecutive quarters of single-digit increases. Google’s core advertising business faced challenges due to economic softening and heightened competition from rival platforms such as TikTok.8

In October, GOOGL shares opened at US$131.21 but saw a decline of 5.43% to close at US$124.08.

According to a Phillip Securities Research report dated 27 October 2023, the recommendation for GOOGL is to ‘Buy’.

Technical analysis

Top traded counters in October 2023

Status: Bearish

Support: US$119.90 to US$120.00

Resistance: US$126.50

The price has broken out of the previous range, with a notable rejection at the immediate support zone. To maintain upward momentum, the price must hold above US$129.00. Should it fail to do so, we could see it revisiting the immediate support level once again.


CONCLUSION

The final quarter of 2023 was marked by the Israel-Hamas conflict, which, unlike the Russia-Ukraine conflict in March 2022, did not lead to a significant market downturn, possibly due to the perception that such conflicts tend to be regionally contained. Nevertheless, the situation contributed to an escalation in oil prices amid concerns about potential supply disruptions. Under the stewardship of Jerome Powell, the Federal Reserve opted to hold interest rates steady, reflecting a belief in the economy’s ability to withstand earlier rate increases even amidst signs of cooling inflation and robust economic growth. The sharp rise in the 10-year US Treasury yield to a level unseen in 16 years highlights the volatility in global bond markets, influenced by expectations of enduring elevated interest rates and the US government’s fiscal deficit concerns. In this environment of higher interest rates, the telecommunications sector emerges as a potentially attractive option for investors, offering stability and predictable cash flow.


Bloomberg analysts’ recommendations

The following table consolidates the consensus ratings and average ratings provided by all analysts on Bloomberg over the past 12 months. These consensus ratings have been derived by standardising analysts’ ratings on a scale from 1 (Strong Sell) to 5 (Strong Buy). Additionally, the table includes the number of analysts recommending ‘buy’, ‘hold’, or ‘sell’ for each stock, along with their average target prices.

Security Consensus Rating BUY HOLD SELL 12 Mth Target Price (US$)
Microsoft Corporation (NASDAQ: MSFT) 4.81 59 (92.2%) 5 (7.8%) 0 402.45
Alphabet Inc (NASDAQ: GOOGL) 4.67 54 (85.7%) 9 (14.3%) 0 153.32
Netflix Inc (NASDAQ: NFLX) 4.17 38(65.5%) 17 (29.3%) 3 (5.2%) 461.43
Spotify (NYSE: SPOT) 3.94 19 (54.3%) 14 (40%) 2 (5.7%) 183
Tesla Inc (NASDAQ: TSLA) 3.43 21 (39.6%) 23 (43.4%) 9 (17%) 242.13



Get yourself educated! Join our free webinar here!


Top traded counters in October 2023


Trade Smarter and Faster
With our newly launched POEMS Mobile 3 Trading App

Explore a myriad of useful features including TradingView chartings to conduct technical analysis with over 100 technical indicators available!

Take this opportunity to expand your trading portfolio with our wide range of products including Stocks, CFDs, ETFs, Unit Trusts and more across 15 global exchanges available for you anytime and anywhere to elevate you as a better trader using our POEMS Mobile 3 App!


Alternatively, you can reach out to our Night Desk representatives at globalnight@phillip.com.sg / (+65) 6531 1225. Join us today and embark on a thrilling adventure in our lively Telegram community, where we’re eager to share even more enlightening insights!

Open an account and trade the US market today!


Reference:


Disclaimer

These commentaries are intended for general circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any person who may receive this document. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. Investors may wish to seek advice from a financial adviser before investing. In the event that investors choose not to seek advice from a financial adviser, they should consider whether the investment is suitable for them.

The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.

Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you

IMPORTANT INFORMATION

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  

 

Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com