Weekly Market Outlook: US Federal Reserve's rate cut Benefiting Asian Equities and Bonds

Week Ahead, 23 Sept 2024

Asian and Emerging Markets equities and bonds are set to benefit from the Federal Reserve's rate cut, as borrowing costs are expected to decrease, while stocks are further supported by stronger currencies.

The U.S. S&P 500 Index continues its upward trend. As long as the index holds above the 5,650 support level, the next technical target lies in the 5,900-6,000 zone.

The NASDAQ 100 ETF has broken out of its downtrend line, signalling a potential retest of its previous high in the 500 area, with immediate support at 470.

The Straits Times Index (STI) has reached its 3,600 technical target and may consolidate this week before moving towards the 3,700 area. Immediate support for the STI stands at 3,500.

Singapore real estate investment trusts (REITs) are expected to go thru short-term pullback or consolidation following their recent rally.

No single stock setups have been identified for the week ahead.

Headlines for the week:

- US Aug PCE, PMI Surveys

- SG Aug CPI, Ind Prod

Disclaimers apply

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.

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

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

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