Weekly Updates 19/8/24 – 23/8/24 August 19, 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 (12 Aug – 16 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 movement revolved around US stock volatility fell and markets regained some of their previous losses where all of them posted gains for the week. The VIX slide back to its previous low levels after a weeklong spike. This cooling off is fueled by better-than-expected US inflation and job data. Therefore, market participants are expecting a 50-basis point cut in the next FOMC meeting in September. The big short famous Michael Burry shrank the size of his portfolio but increased his investments in Alibaba by 24%, while Bill Gates Foundation went 40% heavier into Berkshire, which now represents around 21% of his overall portfolio.
Updates for the week (19 Aug – 23 Aug 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s main macroeconomic release focuses on FOMC minutes of July’s meeting, employment data, and property and manufacturing data from the US. With the recent volatility in the equity markets, most market participants focus on US macroeconomic releases to speculate on the FOMC’s next rate cut. The FOMC minutes will give market participants insight on what was discussed and the overall stance of FOMC members.
This week, investors remain front and centre for the company earnings release. First up from the US, Lowe will be releasing their earnings report, where the consensus is expecting Lowe to reduce its same-store sales, considering the short-term macro backdrop remains volatile, led by the uncertainty around interest rate cuts. Analysts expect the company to report revenue of $23.9 billion, down by 4.4% YoY. The next noteworthy earnings release is Target, where retailers are targeting consumer staples stocks to take advantage of any dips in the share price due to the uncertain consumer environment. Also, many analysts are bullish about Intuit as they believe Intuit is in a good position as compared to its peers, like its resilient tax and small business segment
as well as a good history of dividend growth.
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.
Alibaba (9988.HK): Bullish Setup by Donny Lew
Key Entry Price Pivot(s)
- HK$76
Recommended Trade
- Long at level HK$76
- Take Profit at HK$86
- Stop Loss at HK$73
Alternative Case
- Short below HK$73
- Take Profit at HK$65
- Stop loss at HK$76
Remarks
- Looking at Alibaba’s daily chart, we can see that the price has been in an upward
trend channel. - Currently, the price is around HK$80 to HK$83. We can potentially wait for the price to return to HK$76 and look for a long trade at the support level in a lower timeframe with confluence, such as a bullish bar with significant volume at the
support level.
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.
