Thoughts on Week Ahead:
Week 19 May 2024
“It’s Fresh!” US markets hit fresh highs this week, driven by modest CPI data and resilient earnings reports. Investors are now awaiting the FOMC minutes for clues on the future interest rate policy. Additionally, Nvidia’s upcoming earnings report is expected to shed light on the strength of the current AI-driven rally.
We initially anticipated sideways momentum in the US market indices, but the market exceeded our expectations, breaking above our range. As a result, we have revised our technical outlook to cautiously bullish, setting our next target at 5,420.
In the East, Beijing is implementing more aggressive policies following its trillion-dollar bond sale. The central government plans to buy back unsold homes and eliminate mortgage rate floors for individuals. Our team believes that even more aggressive measures may be introduced if necessary to revive the economy and stabilize falling property prices.
The Greater China indices, China A50 and HSI, are trading in line with our expectations, supported by these measures. Our targets for these indices remain at 13,500 and 20,000, respectively.
Back in the Singapore market, our analysis suggests the index could retest the 3,350 level.
While markets may consolidate slightly this week, our preference is to take long positions in the equities market, remaining vigilant for any signs of supply pressure.
Headlines for the week:
- US Corp Earnings (NVDA, TGT, PDD)
- SG Corp Earnings (Singtel)
- US FOMC minutes, PMI
- China LPR Fixing
- SG final GDP 1Q24, Apr CPI, Ind Prod, Short trading week
Disclaimers apply