Weekly Updates 28/10/24 – 1/11/24 October 28, 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 (21 Oct – 25 Oct 2024)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week S&P 500 finished lower by 1.29% after posing gains in the previous 6 weeks. Although Tesla outpaces the board market and Magnificent Seven, it helped the SP500 from a steeper decline. Large-cap stocks are doing better than small-caps while growth stocks outperformed value thus, the tech-heavy Nasdaq Index rose slightly by 0.34%.
Updates for the week (28 Oct – 01 Nov 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week ahead, consumer confidence in the US might rebound slightly to 99.3 in Oct after the largest decline since Aug 2021. The last decline in Sep 2024 has reflected the expectations of the public towards future business, income and labour market conditions. Although this negative momentum will still persist, most are still with jobs and are willing to spend on entertainments and travels. Analyst expects the GDP to have a solid pace at 3% for Q3 due to strong consumer spending where it is expected to rise by 0.4%. Initial Jobless claims will most likely rise by 232k similarly to last week’s reading as Boeing Co ongoing work stoppage continues to ripple through supply chains where it continues to elevate claims from several states in the US. Also, it is expected that US Changes in NFP to show the first negative changes since Dec 2020 to be situated at 120k change. This weakness is due to a slowdown in cyclical sectors and weather-related disruptions. Analyst expects the job data will keep the Fed on path to cut rates by 25bp at each of the 2 remaining FOMC meetings in 2024.
Earnings releases for this week mainly focuses on 5 (Google, Microsoft, Meta, Apple and Amazon) out of the 7 magnificent seven heavy weights releasing earnings. The earnings releases and forward guidance by these companies will set the overall tone for the sector and market in general due to their immense size, influence and dominant position. A significant number of companies are releasing earnings from all market segments, therefore market participants should stay vigilant and manage their portfolio’s risk when necessary.
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. If you hold equity positions in these stocks, you can hedge your positions using CFDs to mitigate the risk of disappointing earnings releases.
EUR/USD: How much more will the USD rise? By: Tan Peng Chien
Key Entry Price Pivot(s)
- 1.08936
Recommended Trade
- Long at 1.07945
- Stop Loss: 1.07398
- Take Profit: 1.08918
Alternative Case
- Short at 1.08936
- Stop Loss: 1.09503
- Take Profit: 1.07902
Remarks
- Price swept liquidity on previous market structure low and tapped into an area of imbalance
- Targeting a price correction move with a long at current levels to fill internal price balance at the level of 1.08918. Stop loss can be placed below the fair value gap level which would render the trade invalid at 1.07398
- Alternatively, we can wait for prices to finish the correction before continuing its dip, shorting at 1.08936 with stop loss at 1.09503 and target profit of 1.07902 for a decent risk-to-reward
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 (Assistant Manager, 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.
