Skip to main content

Week Ahead: Markets Becoming Policy Driven

 




Week Ahead, 16 Dec 2024

 

Macro News:

On China markets, the same market action persists, “Buy on stimulus announcements, and sell off a day or two later”. This is the playbook for a policy-driven market. However, as China’s economic data continues to hold, if the pledged stimulus are delivered, we could see reflation of the Chinese economy. Patience is key when investing in China.

 

On the other hand, we too observes that US markets are also leaning toward a policy-driven dynamic, as evidenced by the recent rallies in Bitcoin and Tesla that coincided with the re-election of the US President.


We maintain a bullish outlook on the overall US market. However, we are becoming cautious as Nvidia Corp, the leader in the AI theme, appears to be forming a potential classical bearish head and shoulders pattern after facing pressure from both the US and Chinese governments.

 

The week ahead features a significant announcement from the US FOMC committee. As before, the US Federal Reserve Chair's commentary will likely carry more weight than the rate announcement itself, as the market widely expects another 25 basis point cut. In addition, the market will be closely watching the PCE report this week following an elevated PPI report last week.

 

Medium Term:

·       S&P 500 (SPX): S&P 500 did not move higher for the week. We are staying cautious for this week. For index to trend towards 6,180 zone, we need S&P 500 to maintain above 6,000 level.

·       Straits Times Index (STI): Index continues to be neutral and we are looking out for directional cue this week.

·       Hang Seng Index (HSI): Hang Seng Index (Grey) retested 20,500 level and reversed, we expect index to trade range bound for the week as market digest recent Stimulus announcements.


Long Term:

·       S&P 500 (SPX) trend remains upward

·       Hang Seng Index (HSI) trend remains upward

·       Straits Times Index (STI) trend neutral to upward trend.


Headlines Next Week:
- US Nov FOMC Meeting, PCE, PMI Flash, Retail Sales,

- China Home Price Index, 1-yr MLF, LPR, Ind Prod

- SG Nov NODX, Ind Prod

Disclaimers apply




Most Popular

Historical Stock Market Performance During the Year of the Snake (2025)

Historical Stock Market Performance During the Year of the Snake (2025) Introduction: The Chinese zodiac plays a fascinating role in shaping cultural beliefs and behaviors. Among the 12 zodiac animals, the Year of the Snake is often associated with intelligence, caution, and financial shrewdness. We take a simply review of three key indices, S&P 500, Hang Seng Index (HSI), and Straits Times Index (STI),  annual performance  during the Year of the Snake. Key Observations from the Data: S&P 500 Performance: Average annual return: 0.47% . Win/Loss ratio: 37.5% (3 years of gains vs. 5 years of losses). Notable years: 1989 marked a robust gain of 27.25% , while 1941 saw a steep decline of -20.22% , coinciding with global tensions during World War II. HSI Performance: Average annual return: -5.36% . Win/Loss ratio: 66.67% (2 years of gains vs. 1 year of losses). Notable years: The index's strongest year was 1989, with a return of 5.55% , while 2001 suffered a severe decli...
Read more

BYD Co (1211:HK) Witnessing Signs of Strength

BYD Co (1211:HK) Witnessing Signs of Strength On Friday, we observed strong buying within a wide trading range, with the stock closing near the day’s high and good volume recorded. The previous two days of selling showed relatively low volume, indicating potential supply exhaustion. The stock price is currently at a key resistance level, constrained by a downward trendline and a horizontal support-turned-resistance line. A breakout above this level could signal a potential trend reversal , with an initial technical price target of HK$300.00. The stock is outperforming the broader market, indicating strong market demand, as evidenced by our proprietary Relative Strength Indicator (RSI), which is above zero. Additionally, the volume momentum indicator (FFI) is improving, further supporting the possibility of supply exhaustion. The Stochastic indicator also continues to trend higher, reinforcing a bullish outlook. A stop-loss price is set below HK$248.40 . If the price falls below this l...
Read more

Week Ahead: Sustaining December’s Investor-Friendly Momentum

  Week Ahead, 2 Dec 2024   Macro News: Despite inflation remaining firm, the market continues to expect that the US Federal Reserve has a higher probability of cutting rates by 25 basis points at the upcoming FOMC meeting . December marks the final month of 2024 as we approach the year's end. Historically, the S&P 500 Index has been favorable to investors in December , with a 70.83% probability of a positive return and an average gain of 0.74%. We hope these trends persist in 2024. Currently, we have not identified any trade setups. We will provide updates if any opportunities arise. Medium Term: ·        S&P 500: The S&P 500 remains above the 6,000 level and could trend towards the 6,180 zone. ·        STI: The STI remains at the 3,700 resistance zone, with no major technical signals observed. If momentum sustains, the index could move towards the 3,860 level. ·     ...
Read more