Weekly Updates 29/7/24 – 02/8/24 July 29, 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 (22 July 2024 – 26 July 2024)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week’s US economic release shows that the soft landing is in sight as the Fed preferred measure of underlying US inflation rose at a take pace at 2.6% in June while consumer spending remained healthy, all positive signs for the Fed as it seeks to cool inflation without going too far. This also bolstered investors’ bets on the Feds to signal at its meeting this week that they will start to unwind tight monetary policy in September with a 0.25% interest rate cut. US stocks pulled back from record high last week, where most are in the reds. Technology names led the retreat driven by concerns over potentially stronger restrictions on semiconductor exports to China. The yield on the benchmark 10 year Treasury note also ended the week slightly lower at 4.18%.
Updates for the week (29 July – 02 Aug 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week ahead, market participants are anticipating the rate decision by the FOMC. Many Wall Street analysts have hinted that there should be a rate cut; estimated at 25 basis points with the concern towards rising inflation (PCE) data and decreased personal savings data. US small caps are performing better as seen from the Russell 2000 index in the current month amid slowing inflation rate at 3%. Meanwhile for Asian equities, investors should look forward to China & Hong Kong’s GDP data release and the possibility of rate cuts to facilitate economic growth. SG June unemployment rate is due for release this week with monthly historical data showing a slow uptrend since 2023.
This week’s corporate earnings mainly focuses on the magnificent 7 which includes Apple, Microsoft, Meta and Amazon where 4 of these companies account for nearly 20% of the S&P 500 index. When Microsoft disclose its earnings, investors are laying their eyes on the company’s Azure cloud section, ROI in AI investments and trends in capital expenditure. Analysts are expecting Microsoft earnings to be up by 8.9% YoY, while revenue is forecasted to rise by 14.5%. For Apple, investors are paying attention to its services growth where they take it as a guidance for its Q3 due to the expectations of iPhone 16 launch. Investors believe that Apple’s AI initiatives will support long-term growth for its services segment.
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.
PetroChina (0857.HK): Trend Trade by Sean Ng
Key Entry Price Pivot(s)
- $7.01
Recommended Trade
- Long above $7.01
- Take profit at $8.18
- Stop loss at $7.25
Alternative Case
- Short below $6.73
- Take profit at $5.84
- Stop loss at $7.25
Remarks
- Price previously formed an upward channel on the weekly chart and has since broken out of the channel
- Now price has retraced to the upper channel once again
- Traders can potentially look to take a long trade above $7.01 if price bounces off of supports
- Otherwise, a potential short trade could be taken below $6.73 if price breaks back into the channel
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.
