Skip to main content

A Hawkish Fed Equates to a Strong Economy?

 


The US economy is growing, at 2% for 1Q23, even amid high interest rates. This report would confirm the hawkish stance from the Federal Reserve to increase two more hikes in 2H23 but it’s a sign of a resilient economy.

S&P500 is nearing our 2nd target at 4,500 (above) and we expect the index to test the resistance level. In absence of supply trades, we could see the index trending higher. Recent technical gap (4,422-4,396) provides support for S&P500. In any event this level is breached, we would reassess the direction of current uptrend.




Strategists have been conservative in their year-end S&P 500 calls (above). We expect them to re-rate their target prices and this could potentially fuel the next leg of the current mark up.



The GDP data is also expected to provide some boost for broader market and smaller capitalised stocks (above) have lagged behind larger cap stocks in the recent rally, as investors search for value within the current bull market.


There are still un-invested funds on the sideline (above). They could be potential source of flows for equities market.


Singapore market (STI) continues to trend down in recent months (above). However, there are some selective long trades that could be considered. Investors should carefully evaluate the risks before entering any long positions.


Headlines for Week Ahead:
US FOMC minutes
US Jun NFP & Jobs Report
China Jun PMI Report
SG Jun PMI Report
SG Jun Retail Sales Report
US market, short trading week (Independence Day)



Blog disclaimers apply

Most Popular

Wyckoff's Law of Effort

Law of Effort Wyckoff's Law of Effort states that on any single trading day (or week depending on time frame), huge volume (effort) push by participants should see huge price movement, resulting in a wide spread (long body). This is a basic principle of effort and result. However, as per Singtel's case study, we saw huge selling volume on 11 May, yet the price action only shows a narrow spread (small body). This divergence of effort and result in Wyckoff's Law of Effort principles, indicates possible exhaustion in selling or hidden buying. Thus, with a lack of weakness, Singtel should continue trading range bound for the coming days or weeks till further strength or weakness is observed. Swing Traders who trades range can consider positions at 3.70-3.72, with exit target 3.76-3.78.
Read more

DBS Group Holdings (D05): Upward Move Expectations

  DBS Group Holdings (D05) Upward Move Expectations Technically, price trading above 36.58, could see DBS Group retest  previous high of 38.55. Both Relative Strength and momentum indicator FFI are supportive of the move. Stop below 35.42 Disclaimers apply
Read more

Keppel DC REIT (AJBU): Expect price to trade towards S$2.00

  Keppel DC REIT (AJBU) Expect price to trade towards S$2.00 We have observed a decrease in technical supply at the S$1.80 support area during recent trading sessions. Furthermore, a softer interest rate outlook could be advantageous for the Data Centre operator.  Consequently, we anticipate the REIT to move towards our initial target of S$2.00, with the potential to reach S$2.20 if it breaks through resistance. Our stop level is set below S$1.72. Disclaimers Apply
Read more