Daily Morning Note – 28 June 2019

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YOUR PHILLIP SUMMARY

The S&P 500 halted a four-day slump but the Dow marked its longest skid since March as investors awaited U.S.-China trade talks between President Donald Trump and China’s President Xi Jinping during the G-20 meeting in Japan that begins Friday.

The Dow Jones Industrial Average edged 10.24 points, or less than 0.1%, lower at to close at 26,526.58, marking a third straight decline, its longest slump since a five-session decline ended March 8, according to FactSet data. Meanwhile, the S&P 500 index rose 11.14 points, or 0.4%, to finish at 2,924.92, and the Nasdaq Composite Index finished 57.79 points, or 0.7%, higher at 7,967.76.

A tariff cease-fire between Beijing and Washington would avert the next round of tariffs on additional $300 billion worth of Chinese imports. The Wall Street Journal reported that Xi will present President Donald Trump terms to resolve a market-rattling trade confrontation ahead of the expected the Group of 20 gathering of developed countries set to take place this weekend.

On the economic data front, the Commerce Department issued its final revision of first quarter GDP growth and said the U.S. economy grew at a solid rate of 3.1% in the first quarter, but consumer spending and business investments grew at a slower pace than in the earlier estimates. The Labor Department said initial claims for unemployment benefits rose 10,000 to 227,000 in the seven days ended June 22, compared with the week prior.


TECHNICAL PULSE

Singapore Exchange Ltd

Recommended Action: Technical BUY

In recent months, SGX has been performing well since the stock broke out of the 7.51 range. No doubt the stock will continue to perform well and may even break the resistance level of 8.05. Based on the technicals, the stock may be headed into a corrective phase as the graveyard Doji pattern on Wednesday rejected and closed below the 88.6% of the Fibonacci level of the total range from 7.22 – 8.05. A sign of bullish exhaustion. To add on, the price did not close above the key resistance level of 7.95 despite a minor bullish gap up on Thursday opening. This signifies that the bull may be exhausted.



BREAKING NEWS

Ratings agency Moody‘s Corp and Israeli cyber group Team8 launched on Thursday a joint venture to assess how vulnerable businesses are to cyber attacks and create what they hope will become a global benchmark.

US economic growth accelerated in the first quarter, the government confirmed on Thursday, but the export and inventory boost to activity masked weakness in domestic demand, some of which appears to have prevailed in the current quarter.

The United States should immediately cancel sanctions on Chinese telecoms equipment maker Huawei, a commerce ministry spokesman said on Thursday, days before the two countries’ leaders are due to meet for talks on trade.

Shares of Boeing tumbled Thursday after US regulators identified a new issue in the Boeing 737 Max that will likely slow the plane’s return to service following two deadly crashes.

Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR

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

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