Weekly Updates 8/1/24 –12/1/24 January 8, 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 (01 Jan 2024 – 05 Jan 2024)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week marks the first week of 2024 where most markets are losing their winning streaks as market participants lower their expectations of interest rate cuts from the European Central while there is an unexpected upward revision to European PMI data. Also, US companies ramped up hiring in December with private payrolls increasing 164,000, the most since August. In summary, ultra dovish views are being tempered, this skew in positioning and uncertainties plants a seabed for volatility for the coming weeks.
Updates for the week (08 Jan 2024 – 12 Jan 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s macro news mainly focuses on the inflation data as it is seen as key in deciding the Fed’s course for rate cuts. Analysts are expecting CPI MoM to increase due to year end Santa rally where many people tend to spend more on festive seasons or go on a holiday. This is boosting the figure for PPI Final Demand to be expected at 0.2%. China is also releasing its inflation data on Friday where it is expected to have a deflation of 0.3% due to the weight of bad debts on Chinese finance where the collapse of residential real estate development has destroyed the consumer confidence leaving Chinese households to cut back on spending. The slowdown of US economy and near recession in Europe have reduced the demand for China’s exports where the expected boost in China’s exports from $68b to approximately $76bn is only due to the holiday season.
Traders should position their portfolio before the macro news release to not be negatively affected and have good risk management.
This week’s corporate earnings focus on US big financial institutions like JP Morgan, Bank of America, Wells Fargo, Citi Group and Blackrock. As quoted by CFRA Research Analysts, most financial stock turned in stellar performance on the price charts in Q4 2023 surging 21.5% on a total return basis vs the S&P 500’s 11.7% due to interest rates rose quite a fair bit in 2023. Market participants are taking the earnings reports to determine whether there is further degradation of credit in Q4 2023. This helps to adjust investors’ expectations against the credit quality in 2024 as lower expected rate environment should lead to lower defaults given more manageable debt payments. Whereas for Delta Airlines, it has been one of the beneficiaries of a robust global travel demand given Delta’s strong footing in both domestic and international travel markets but in the Q4 2023 report, investors will focus on management’s commentary to detect any bullishness in booking pricing, capacity growth from local and international travel due to global travel recovery.
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.
City Developments Limited: Key support level – by Alex Lee
Key Entry Price Pivot(s)
- $6.00
Recommended Trade
- Long at $6.30
- Stop Loss at $5.96
- Take Profit 1: $7.50
Alternative Case
- Short at $5.95
- Stop Loss at $6.76
- Take Profit at $4.77
Remarks
- Looking at the weekly chart of CityDev, we can see that price has bounced from a key support level.
- Currently, price is rejecting the support level with strong volume thereby presenting an opportunity for going long.
- We may see price extending towards the next resistance level.
- An alternative case is presented in the event of a breakout towards the short side.
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.
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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.
