Weekly Updates 12/8/24 – 16/8/24 August 12, 2024
This weekly update is designed to help you stay informed and relate economic and company earnings to potentially value-add your CFD (Contract For Difference) trading via hedging (risk reducing). This article should be used for educational purposes only and not as financial advice. We urge all traders to carry out your own due diligence before submitting trades.
Recap for last week (05 Aug – 09 Aug 2024)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week’s market sold off sharply with Wall Street’s fear gauge reaching levels seen only during the pandemic calamity, global financial crisis and the Dotcom crash. A market shakeout was inevitable where overconfident investors are heavily invested in riskier trades. The AI optimism wavered and hopes for a smooth economic landing diminished, a yen rally prompted investors to unwind their carry trades. This put Japan at the epicenter of global sell-off with the Nikkei 225 recording its worst one day drop since 1987. Warren Buffet announced that Berkshire Hathaway had halved its Apple Holdings; even Nvidia’s share price fell about 30% from the record high it hit back in June. Weak US job data sounded the recession alarm which helped drive last week’s market sell off, but an update from the US Labour Department on Thursday likely eased some fears with unemployment claims falling further than they have in nearly a year. This data sparked some hopes for market participants that the job market might return to pre-pandemic normalcy. Bonds rallied by 3.23%, providing a cushion against the stock market dip.
Updates for the week (12 Aug – 16 Aug 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week ahead mainly focuses on US economic releases where investors will lay eyes on inflation data, housing market and retail sales after a volatile week for markets. Tuesday’s PPI will offer an update on wholesale inflation. At the same time, Wednesday’s release of the July CPI will show whether consumer inflation will continue its downward trend as the consensus are expecting a 0.2% increase in July. This inflation data will impact the Fed’s approach to interest rates. An expectation of higher inflation could raise concerns that interest rates will stay elevated. Investors will monitor Thursday’s weekly initial jobless claims data to assess whether the labor market remains resilient, following last week’s report that helped alleviate concerns about the economy. Meanwhile, China’s industrial production will also be closely watched after the latest PMI data indicates that manufacturing output growth slowed in July.
This week’s earnings releases are mainly from the US and Singapore. Investors could get more updates on the health of consumer spending when major retailers like Walmart and Home Depot report their earnings. Cisco earnings on Tuesday highlight the tech infrastructure spending while it has plans to eliminate thousands of jobs this quarter as reported by Reuters. Investors will also observe international retail trends this week with reports from Chinese mega e-commerce Alibaba and JD.com.
If you hold equity positions in these stocks, you can hedge your positions using CFDs to mitigate the risk of disappointing earnings releases.
For those looking to speculate or capitalize on the increased volatility, CFDs provide leverage and ease of going long and short across a broad range of products available. As CFD is traded on margin, there is a risk of losing more than your initial deposit amount and traders need to adopt proper risk assessment and management to determine if CFD is the product for you.
Potential Slide in Gold Prices by Tan Peng Chien
Key Entry Price Pivot(s)
- 2452.00
Recommended Trade
- Short at 2424.5
- Stop Loss: 2452
- Take Profit: 2350
Alternative Case
- Long at 2452
- Stop Loss: 2413
- Take Profit: 2532
Remarks
- Gold prices failed to form a higher high last week.
- U.S. Dollar Index has swept bearish liquidity, recovering from the dip.
- Prices are currently in an area of interest.
- Target liquidity resting below around price of 2350 with stop loss above area of interest at 2452.
- Alternative trade would be long at the pivot point of 2452, targeting new highs around price of 2532.
If you have any feedback or questions, feel free to email us at samht@phillip.com.sg or onishathyeyn@phillip.com.sg or cfd@phillip.com.sg.
Disclaimer
This material is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the investment product mentioned. It does not have any regard to your specific investment objectives, financial situation or any of your particular needs.
Accordingly, no warranty whatsoever is given and not liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of your acting based on this information. Investments are subject to investment risks.
The risk of loss in leveraged trading can be substantial. You may sustain losses in excess of your initial funds and may be called upon to deposit additional margin funds at short notice. If the required funds are not provided within the prescribed time, your positions may be liquidated.
The resulting deficits in your account are subject to penalty charges. The value of investments denominated in foreign currencies may diminish or increase due to changes in the rates of exchange.
You should also be aware of the commissions and finance costs involved in trading leveraged products. This product may not be suitable for clients whose investment objective is preservation of capital and/or whose risk tolerance is low.
Clients are advised to understand the nature and risks involved in margin trading. You may wish to obtain advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a qualifies financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest and we do not offer any advice in this regard unless mandated to do so by way of a separate engagement.
You are advised to read the trading account Terms & Conditions and Risk Disclosure Statement (available online at www.poems.com.sg) before trading in this product. Any CFD offered is not approved or endorsed by the issuer or originator of the underlying securities and the issuer or originator is not privy to the CFD contract. This advertisement has not been reviewed by the Monetary Authority of Singapore.
CFD Disclaimer
Investments are subject to investment risks. The risk of loss in leveraged trading can be substantial. You may sustain losses in excess of your initial funds and may be called upon to deposit additional margin funds at short notice. If the required funds are not provided within the prescribed time, your positions may be liquidated. The resulting deficits in your account are subject to penalty charges. The value of investments denominated in foreign currencies may diminish or increase due to changes in the rates of exchange. You should also be aware of the commissions and finance costs involved in trading leveraged products. This product may not be suitable for clients whose investment objective is preservation of capital and/or whose risk tolerance is low. Clients are advised to understand the nature and risks involved in margin trading.
You may wish to obtain advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a qualified financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest and we do not offer any advice in this regard unless mandated to do so by way of a separate engagement. You are advised to read the trading account Terms & Conditions and Risk Disclosure Statement (available online at https://www.poems.com.sg/) before trading in this product.
Any CFD offered is not approved or endorsed by the issuer or originator of the underlying securities and the issuer or originator is not privy to the CFD contract.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
This material is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should seek advice from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products.
About the author
Sam Hei Tung (Dealing) and Onisha Thye (Dealing)
Sam graduated from National University of Singapore with a Master of Science in Finance. He personally manages his own investment portfolio and does equity and economic research in his free time. Sam believes that education and information is essential to making good financial decisions.
Onisha is a dealer at the CFD Dealing Desk. She graduated from Monash University with a double major in finance and econometrics. Her natural curiosity for finance is what drove her to be in this field as she is fascinated by all the possibilities and opportunities that are available to grow one’s wealth, either through trading or investment.
