Weekly Updates 8/4/24 – 12/4/24 April 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 Apr 2024 – 05 Apr 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 Powell’s speech last week indicating Feds decision to delay rate cuts due to strong employment and inflation data released. This sparked a retreat in global bonds within the traders which sends bond yields significantly higher with US 10 year government bond yields spiking 2.61% to 4.42%. Equity markets retreated from recent highs and ended the weak lower with exception of Hang Seng Index.
Updates for the week (08 Apr 2024 – 12 Apr 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
Key macro news releases this week are mainly focused on CPI,PPI and FOMC Meeting minutes coming out of US. With all market participants abit spooked with comments from FOMC members last week, all eyes are on CPI and PPI data coming out on Wednesday and Thursday. A softer than expected CPI and PPI will be bullish for the markets as it justify a sooner than later rate cut by the Fed, while hotter than expected inflation number will most likely keep rates higher for longer. Investors of the Chinese markets are looking at CPI and PPI data of China to determine if its economy is still in the deflationary spiral or has it under control.
This week’s corporate earnings mainly focuses on major banks releasing earning for Q1 2024 such as JPM, Wells Fargo, BlackRock and Citi Group. These financial institutions will be setting the benchmark for the remaining banking sector who is yet to release their earnings, as investors will pay close attention to these earnings to set their expectations for upcoming quarters. Other countries like HK and SG are relatively quiet with no companies releasing earnings. However, Bank of Beijing is releasing their earnings on Friday which traders will also take its earnings as a forward guidance of how China’s economy will turn out in the future due to the deepening property debt crisis that rippled through the economy where credit risks are rising.
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.
Trading Opportunity – Alibaba (9988.HK) – by Donny Lew
Key Entry Price Pivot(s)
- HK $69
Recommended Trade
- Long at level HK $69
- Take profit at HK$76
- Stop loss at HK$66
Alternative Case
- Short below HK$64
- Take profit at HK$57
- Stop loss at HK$67
Remarks
- Looking at the daily chart of Alibaba, we can see that price has been in a ranging channel.
- Currently, price is moving at the support level at HK$69-HK70 and we can potentially look for a long trade at this level in a lower timeframe with confluence such as a bullish bar at the support level with significant volume.
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.
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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.
