Weekly Updates 22/1/24 –26/1/24 January 25, 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 (15 Jan 2024 – 19 Jan 2024)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week, China’s GDP release showed that the China economy is still greatly affected by the deteriorating state of the property market. Furthermore, deflation is starting to be a serious problem and forward GDP is expected to be weak, market participant’s sentiment are deeply bearish. Causing the Hong Kong indexes to close 5-8% lower, some investors are not looking at the Chinese government for any policy response to reassure confidence among market participants.
Updates for the week (22 Jan 2024 – 26 Jan 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s macro news mainly focuses on US and China economic releases. US retail sales are expected to tick higher at 0.4% due to the strong unit auto sales and higher gasoline prices; US industrial production most likely to fall by 0.1% in Dec 2023 as manufacturing hours worked slid lower where utilities output was 1.4% lower on warmer-than-usual winter weather thus lowering heat demand and driving energy consumption down slightly. On the other hand, despite increased liquidity injections from People Bank of China (PBoC) where M2 YoY is expected to rise, many market participants are expecting Retail sales growth to slow to 8% YoY while the industrial productions are expected to remain the same at 6.6%. Any downside surprises in the data may reinforce the trend of weaker economic conditions.
Traders should position their portfolio before the macro news release to not be negatively affected and have good risk management.
This week’s corporate earnings release focuses on the US companies like Tesla (EV), Netflix (Content Streaming), Caterpillar (Construction & Equipment), Visa & American Express (Credit Card), Lam Research and Intel (Semiconductor / Chip manufacturing). With BYD surpassing Tesla in terms of production, market participants are eager to see how Tesla is going to perform and forward guidance. Visa and American Express earnings will give investors a more detailed picture on the strength of the US consumer. From personal spending and consumption to the velocity of money. A key matric for upcoming GDP guidance and if there will be a potential recession in 2024.
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.
Gold: Trading Opportunity- by Jun Yuan Kwong
Key Entry Price Pivot(s)
- USD$2040
Recommended Trade
- Short at USD$2040
- Stop Loss at USD$2000
- Take Profit at USD$2065
Alternative Case
- Long at USD$2050
- Stop Loss at USD$2085
- Take Profit at USD$2025
Remarks
- Looking at the 4 hours chart of GLD, we can see that the price has been in a downtrend trend channel since the start of the year.
- Currently, the price is moving toward resistance at USD$2040. We can potentially look for a short trade at the resistance level with a confluence of a bearish bar.
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.
