Weekly Updates 16/9/24 – 20/9/24 September 16, 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 (09 Sep – 13 Sep 2024)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week’s market movement revolved around US stocks rose as investors evaluatednew inflation and labour data alongside solid expectations of a 0.25% interest rate cutnext week. S&P 500 rose by 3.38% whereas Nasdaq also rose 5.04%, most of it isfueled by tech stocks (with Nvidia and Meta each gaining approximately 2%). LastThursday, the Aug 2024 PPI gave an indication that inflation is cooling down with only1.7% rise on an annualized basis which are in line with expectations.
Updates for the week (16 Sep – 20 Sep 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week ahead, many investors are laying their eyes on major banks including the Federal Reserve (Fed), Bank of England (BoE) and Bank of Japan (BoJ) where all are set to announce interest rate decisions one after another. The big question faced by the market participants is whether the 25 basis points cut by the Fed is enough to stave off further damage to the labour market. While most traders trimmed their expectations to a 25 basis points cut since inflation in the US is closer to its 2% target and the labour market is showing signs of weakness, some are betting on a cut that is 50 basis points. This is mainly due to the Fed that was widely criticized by the public of acting too slow here this could risk a further increase in unemployment rate and a potential recession in the US economy. For BoJ and BoE, traders are expecting both to remain their interest rate as BoJ has been the only bank that hike interest rate that sent a shockwave through the financial markets thus most likely BoJ is in no rush to hike.
This week’s corporate earnings release revolves around FedEx and General Mills from the US. Market participants are pricing in bullish momentum for FedEx stock price with its ~13% Year To Date gains compared to its competitors who are struggling. Analysts are eager to know FedEx’s forward guidance to know how FedEx sees the trajectory of the US economy.
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.
AEM: Potential Long Setup by Alex Lee
Key Entry Price Pivot(s)
- $1.24
Recommended Trade
- Long at $1.28
- Take Profit at $1.50
- Stop Loss at $1.22
Remarks
- The daily chart for AEM shows a substantial decline in price following the earnings report, but a strong support level has formed with increased volume indicating buyer’s interest.
- Currently, price has closed above the 20-moving average line
- We may see price extending towards $1.50 as it aims to close the gap.
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.
