Weekly Updates 5/2/24 –9/2/24 February 5, 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 (29 Jan 2024 – 02 Feb 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 mainly revolves around Hong Kong court ordering the liquidation of Evergrande Group, a real estate developer which is gravely indebted for approximately $300 billion and was unable to restructure their debt. This drawn-out liquidation has caused the HSI to fall by 6.54%. On the other hand, last week Fed left its benchmark interest rate unchanged which is largely expected by investors where the rate cuts are expected to be after March as inflation cooled towards the central bank’s target. This expected outcome has sent most US indexes up ranging from 1.17% to 1.41%.
Updates for the week (05 Feb 2024 – 09 Feb 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s macro news mainly focuses on PPI and CPI from China. China has been affected by deflationary pressure from weak demand and a property market in crisis with the collapse of Evergrande. Analysts expect more deflationary pressure (CPI of -0.5%), more weakness to be expected from the China markets. Investors and traders should position their portfolio accordingly to manage the downside risk. The US is releasing both trade balance and initial jobless claims data, which are expected to be similar with prior data. Unless there is a major surprise, investor and trader’s sentiment will be the same.
This week’s corporate earnings focus on major US companies like McDonalds, Palantir, Snap, Walt Disney, Paypal, Roblox and more. As major US tech companies have published earnings already, analysts and market participants have already adjusted expectations for companies releasing earnings this week. Investors are not just looking out if company’s earnings releases hit expectations, forward guidance and company’s comments on the outlook of upcoming quarters are as important. This week consists of quite a few highly volatile stocks like Roblox, Snap and Pinterest.
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.
Nasdaq Trade Opportunity: Closing The Gap – by Annabelle Tang
Key Entry Price Pivot(s)
- Short at 17470.33
- Stop Loss at 17520
- Take Profit at 17372
- Looking at the 15 minutes chart of Nasdaq, we can see two very distinct gaps has yet to close even after two days. As a result, we recommend traders to short and either take profit at 17372 (for more conservative/risk averse traders) or employ a trailing take profit method.
- For traders who prefer the latter, the methodology can be to first take a partial profit at 17372 (e.g. 50%), then another take profit at 15352 (e.g. 30%) and let the remaining portion of tp continue to run (if a continuous bearish trend is present), while taking note to take profit again at 15352/17372 in case of reversion back to bullish.
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.