Daily Morning Note – 25 September 2018

WEEKLY MARKET OUTLOOK WEBINAR

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YOUR PHILLIP SUMMARY

U.S. stocks closed mostly lower Monday as the U.S.-China trade war entered a new phase when tariffs on billions of dollars of products took effect. Investors were also looking ahead to the Federal Reserve’s two-day monetary policy meeting, which wraps Wednesday and is likely to result in another interest-rate hike.

The Dow Jones Industrial Average fell 181.45 points, or 0.7%, to 26,562.05 after closing at a record on Friday. The S&P 500 lost 10.31 points, or 0.4%, to 2,919.37. The Nasdaq Composite Index reversed earlier loss to rise 6.29 points to 7,993.25. Sectors closely tied to the trade issue were among the biggest decliners — materials and industrials were both down more than 1%.

Coming up this week is the Federal Reserve’s policy meeting that will likely see interest rates increased for the third time this year, with markets increasingly pricing for another one in December. Elsewhere, European sovereign bond yields jumped as Central Bank President Mario Draghi predicted a pickup in underlying inflation. Brent crude climbed above $80 a barrel as OPEC and its allies signalled less urgency to boost output despite U.S. pressure. The pound strengthened on increasing talk of a second U.K. referendum on the final Brexit deal.


Source: MarketWatch.com, Bloomberg

RESEARCH REPORT

Technical Analysis: S&P 500 – Monthly recession tracker – August update (risk-on)

Analyst: Jeremy Ng

– All the indicators in the Recession Tracker remain well within their thresholds
signalling for further upside in the general equity market (positive)

– Manufacturer and Consumer sentiment remained at their multi-decade high
signals further optimism (positive)

– Extreme short positions are building up again in VIX Futures warning for an
impending spike higher in the VIX index (negative)

– Expect the DJIA, S&P 500 and Nasdaq 100 index to stay within their uptrend
to search for new record highs


BREAKING NEWS

President Donald Trump said Monday he expects to meet North Korean leader Kim Jong Un “quite soon,” expressing optimism that his efforts to negotiate a denuclearization deal are still on track.

Global benchmark brent crude jumped more than 3 per cent on Monday to a four-year high above US$80 a barrel after Saudi Arabia and Russia ruled out any immediate increase in production despite calls by US President Donald Trump for action to raise global supply.

Satellite radio titan SiriusXM unveiled plans Monday to acquire online rival Pandora for US$3.5 billion, ramping up competition in the streaming music market dominated by Spotify and Apple.

CIMB Group Holdings Bhd Chairman Nazir Razak is to step down by the end of the year after almost three decades at Malaysia’s second biggest bank, he said on Monday.

Suntec Real Estate Investment Trust (Suntec Reit) said on Monday that its manager has appointed a veteran from CapitaLand to take on the role of chief operating officer from Oct 1, 2018.

Source: SGX Masnet, Bloomberg, Reuters, The Business Times, Channel NewsAsia, Phillip Securities Research

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

Read the research report(s), available through the link(s) above, for complete information including important disclosures

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