Weekly Updates 2/10/23 – 6/10/23 October 2, 2023
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 (25 Sep 2023 – 29 Sep 2023)
*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 higher crude oil prices and higher rates. With US 10 year bonds reaching 4.57% and Brent crude oil prices climbing above $95 in the week. Traders and investors worry that the high crude oil prices due to OPEC+ reducing oil production and putting upward pressure on global inflation. Furthermore, higher long term rates has cause most major US indices to end lower for the week.
Updates for the week (02 Oct 2023 – 06 Oct 2023)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s macro news mainly focuses on employment data (Both ADP employment change, change in nonfarm payrolls and unemployment rate) and manufacturing data coming out of the US. These macro data will give market participants more information on the state of the US job market which is a key forward indicator of an impending weakness in the US economy or even recession. Investors and traders need to take note of the economic releases to adjust portfolios and trading strategies when necessary.
This week’s corporate earnings focuses on McCormick and Constellation Brands releasing earnings in the US. With the start of the last quarter of the year, analysts and portfolio managers are eager to digest any Q3 earnings and forward guidance they can get from companies. McCormick and Constellation Brands will give market participants guidance on the strength of the retail side of business with McCormick focusing mainly on Spices and Seasoning while Constellation Brands focuses on alcoholic beverages like beer, wine and spirits.
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.
HKEX(0388.HK): Potential Bearish Continuation
Key Entry Price Pivot(s):
- HK$300
Recommended Trade:
- Short at HK$300
- Stop Loss at HK$320
- Take Profit 1: HK$280. Take Profit 2: HK$269. Take Profit 3: Trailing stop.
Alternative Case:
- Long at HK$320
- Stop Loss at HK$279
- Take Profit at HK$336
Remarks:
- Looking at the daily chart of HKEX, we can see that price is in a downwards channel.
- Currently, price is rejecting the resistance of the channel with strong volume thereby presenting an opportunity for shorting.
- We may see price extending towards the support of the channel however partial profit taking is recommended.
- An alternative case is presented in the event of a breakout towards the long side.
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.
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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.
