Weekly Updates 26/8/24 – 30/8/24 August 26, 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 (19 Aug – 23 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 Federal Reserve Chair Jerome Powell’s comments on the economy, jobs and FOMC’s stance on upcoming rate cut decisions. Acknowledging that rate cuts are near as soon as by September meeting. Sending all US indexes higher to end off the week. With strong new home sales and no surprises in initial jobless claims, the US equity markets ended higher while bond yields dropped across Singapore and US (pricing in the rate cut cycle).
Updates for the week (26 Aug – 30 Aug 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week ahead is mainly focused on GDP, Personal Income, Personal Spending and initial jobless claims data coming out of the US. All market participants and analysts are eager to see how the US economy did for the last quarter and the overall strength of the US consumer, which contributes, to ~68% of US GDP. Personal income is expected to remain the same as prior to increasing 0.2% while Personal spending is expected to increase to 0.5% over prior of 0.3%. Any surprises may result in fears over the slowdown of the US economy and potential recession fears.
This week’s corporate earnings releases focus on chip manufacturer NVIDIA with high expectations from both analysts and market participants on it’s AI chip demand and overall growth. Furthermore, investors are eager to know the forward guidance from retail stores like Dollar General and Best Buy to have a glimpse of the strength of the US consumer. Meituan, Haidilao, Trip.com and BYD are set to release earnings this week. With China’s GDP growth slowly picking up, market participants are looking for positive signs in both the earnings releases and forward guidance.
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.
Japan 225 Index (N225.JP): Channel Trade By Jun Yuan Kwong
Key Entry Price Pivot(s)
- 38,210
Recommended Trade
- Short at level 38,210
- Take Profit at 37,570
- Stop Loss at 38,645
Alternative Case
- Long at level 38,650
- Take Profit at 38,930
- Stop Loss at 38,300
Remarks
- Observing the 4-hour chart of the Japan 225 Index, we can see that the price is in an uptrend channel.
- However, the price pulled back when it reached its previous high, which is a strong resistance level. A potential double top might be forming.
- Currently, the price is rejecting the resistance of the channel and, we may see the price extending towards the support of the channel and towards the 200 EMA.
- Traders can potentially look to take a short trade when a significant bearish bar forms at the channel resistance. This indicates that the price might be rejecting the channel resistance and suggests that the price may extend towards the channel’s support.
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.
