Weekly Updates 22/7/24 – 26/7/24 July 22, 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 Jul 2024 – 19 Jul 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 investors flocking towards haven assets where gold price rose to a record high on last Tuesday after the comments from the Fed where they cemented expectations of a US interest rate cut in Sept. Lower US interest rate put pressure on the dollar and bond yields which increase the appeal of non-yielding bullion. The benchmark US 10 Year bond is hovering near a 4-month low. However, with concerns over 81 year old Joe Biden’s ability to serve another term, markets has priced in his lower chances of success where markets have generally seen benefiting from Trump’s advocacy of looser fiscal policy, weaker regulations and higher tariffs where all these supported the dollar to rise by 0.2% while US 10 year bonds also rose by 0.22%. Last Friday sessions, most of the indexes ended lower due to the largest global tech outage. This is because the cybersecurity firm CrowdStrike rollout a software update where it crashed countless Microsoft Windows computer systems across multiple industries including airlines, banking and healthcare.
Updates for the week (22 July – 26 July 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week ahead, investors will brace for heightened volatility in the markets with Joe Biden dropping out of the Presidential race. This impact might put markets in risk off mode as traders might have a selloff in equities and flight off towards safe-haven assets. There are key reports from the US including the GDP QoQ, Initial Jobless Claims, Personal Spending, etc. GDP QoQ as the Fed’s favorite measure of inflation are expected to rise by 1.7% which signals a healthy rise as inflation are on track towards Fed’s 2% target. All eyes will be on Friday’s consumer spending where it is still likely to be decent as the consensus are expecting it to rise by 0.3% due to inflation is starting to ease back to a level where the Fed is comfortable. Thus, lifting expectations that the central bank to cut interest rates by Sept where exports will start growing again after a slower rise in Q1 while businesses are likely to stop cutting inventories as they expect future sales to rise. SG is releasing it’s CPI YoY data where the consensus expects inflation to only rise by 2.8% due to global supply chain frictions, energy and food commodity prices have eased.
This week’s corporate earnings mainly focus on the US which includes Google, Tesla, Amazon, Coca-Cola, etc. Google and Tesla are the first two Magnificent 7 companies to release its Q2 earnings report on Tuesday US market close. With a large amount of companies releasing earnings this week, market participants should be wary of not just the earnings but the forward guidance of companies as well.
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.
NASDAQ Seeing Profit Taking and Selling Pressure After Testing Channel High By Jeraldine Tan
Key Entry Price Pivot(s)
- 19,468
Recommended Trade
- Long at 19,117
- Stop Loss at 20,168 (700 pts)
- Take Profit at 18,768(700 pts)
Alternative Case
- Long above 19,798
- Stop Loss at 19,298 (500 pts)
- Take Profit at 20,598 (800 pts)
Remarks
- Nasdaq was up with strong momentum from tech stocks which recently saw fund flow out (sector rotation).
- This is after Nasdaq tested the channel high which introduced selling pressure.
- In the short run, Nasdaq is poised to test lower hence recommended trade is a short-term trend following trade.
- Alternative trade is presented for traders who remain bullish on tech for a trend resumption trade to the upside. Price breaking through support followed by a quick recovery may provide more conviction for this trade.
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.
