Weekly Updates 17/7/23 –21/7/23 July 17, 2023

Weekly Updates 17/7/23 –21/7/23

Weekly Updates 17/7/23 –21/7/23


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 (10 July 2023 – 14 July 2023)

Weekly Updates 17/7/23 –21/7/23*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.


Last week, the stocks recorded a week of strong gains as investors welcomed data showing a continued cooldown in inflation but analysts expect the FOMC would hike rates one final time in July while starting to cut rates in 2024. S&P index ended the week 6.5% below all-time intraday high in early 2022. The Nasdaq Composite recorded an even stronger gain but remained 12.94% below its record peak. The US Treasury prices jumped due to the 10 year US Treasury note yield falling below 4%. Analysts forecast that 4% is the peak in yields for this tightening cycle as it has struggled to break through 5% since the failure of Silicon Valley Bank and Signature Bank.


Updates for the week (17 July 2023 – 21 July 2023)

The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.

Weekly Updates 17/7/23 –21/7/23


This week’s macro news mainly focuses on the production data from the US, China is releasing its GDP, Industrial production and retail sales data. US Analysts are expecting retail sales to continue rising as households still have the capacity to spend where there will be a continued spending in the summer months. Survey data has continued to demonstrate pessimism and weak activity for industrial production due to higher cost in capex spending (higher interest rates and stricter bank lending standards). For China, analysts expect its GDP YoY to rise by 7.1% which shows that recovery from Covid is great. However, data from Industrial production is giving contradicting results thus investors are still on the sideline.

Weekly Updates 17/7/23 –21/7/23


This week, most of the corporate earnings releases are from the financial institutions as reporting season ramps up. From last week’s release, JP Morgan posted a record of $41.3b in revenue for Q2, stronger than expected which was driven by the high net interest income. The same goes for Black Rock with its Q2 revenues came in largely in line with expectations at $4.46b. This gives market participants a forward guidance of how the banking sector is doing, indicating that the market has priced in the rising interest rates. Besides, some investors are also looking at Tesla’s earnings release due to the steep discounts given on its models to spur demand, this helps to play a favor in Tesla’s upcoming results. Next in line, investors are also focused on Netflix as its earnings results are one of the important parameters for market sentiment after a strong bull run of tech stocks in Q1 2023. Netflix’s newly launched ad-supported tier and password-sharing crackdown policies are the focus of its upcoming earnings report.

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.


Weekly Updates 17/7/23 –21/7/23


S&P 500: Riding the Bullish trend- by Annabelle

Weekly Updates 17/7/23 –21/7/23

Trade Set-up:

  • From the chart above, we note that S&P has been trending up consistently throughout the year. Many has noted that S&P has been trending to the point of hitting past its 14 month high.
  • Several factors can be attributed to the bullish growth such as the flight to safety, but to tech stocks instead since Apple stock and other big tech names have continued to show unprecedented growth amidst economic uncertainty.
  • Furthermore, since earnings have remained steady over past quarters, investors may be feeling more assured with this safety net they have drawn for themselves. Despite that being the case, it is still imperative for traders to keep in mind the possibility of recession looming just around the corners.
  • Hence. we advise traders to remain cautious and to not blindly chase after the market.


Trade Execution:

  • A channel has been identified and drawn in the chart above. Traders should long when prices hit support, and apply a trailing take profit technique as prices reaches resistance. This would allow traders to not only benefit from the current bull market and reap in gains from possible further rallies, but at the same time set in a sensible point of entry.


Weekly Updates 17/7/23 –21/7/23


EUR/USD eases from multi-month high past 1.1200

Weekly Updates 17/7/23 –21/7/23

Trade Set-up:

  • EUR/USD retreats from the highest level since February 2022 amid mixed concerns. Euro bulls were rampant last week with downbeat US inflation numbers flagging concerns about Fed’s nearness to policy pivot, alongside ECB members staying hawkish despite mixed Eurozone data.
  • On the technical front however, EUR/USD seems stalling on the bid but underlying momentum is undeniable. RSI also signals the pair is currently overbought. The pair has entered a new channel with immediate resistance coming from the previous channel line.


Trade Execution:

  • Technically, the pair is considered on an uptrend. There could be some downward pressure as the pair attempts a retracement back to the 1.1100 handle for a more sustained up-move. This could indicate sell pressure in the short-term, while buy pressure remains in the long-run.
  • Investors looking to trade should trade with these technical levels in mind. Immediate top-side resistance at 1.1280 while down-side support is sought at 1.1100.


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.

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.

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