ASEAN KEY DESTINATIONS
ASEAN Markets Set to Surge
Taking the lead from Wall St this week and powered by the increasing amount of international investment ASEAN Exchanges are set to surge to all time highs in the coming week.
What you should own Monday
PTT, IVL, SCB, Banpu
Digi, Genting, WCT
NEPS, OLAM, UOB, OCBC
PLDT, Meralco, Ayaya
Big names like Google and GE will report earnings next week but the focus will remain on the possibility of more cheap cash flowing in from the Federal Reserve. These 2 factors could combine to provide a surge in equities over the next 10 days.
After Friday’s mildly anemic payrolls report, the increased likelihood the Fed will be forced to do more to stimulate the economy has investors keen to get in on the action.
“The fact that Wall Street closed positive Friday despite the weak payrolls data is clear evidence the Fed’s action is a turning point for investors at this time” Shayne Heffernan of Ebeling Heffernan said.
Pending Fed action has already been baked into the equities rally, with $500 billion as the most probable size of the injection. Now both good and bad news can spark a rally, if the Fed is seen to be forced to do more, the market will move higher.
Economic data next week, including consumer and producer prices, retail sales and consumer sentiment could shed further light on whether the economy has slowed enough to require swift action from the Fed.
Intel Corp, JPMorgan Chase & CO, Google Inc and General Electric Co are juat some of the largest companies that will report earnings next week.
Intel warned in late August that its revenue could fall short and its shares fell, so there’s little space for a negative surprise.
Alcoa’s report on Thursday shows even bellwethers’ numbers may have to vary enormously from expectations to be noted amid all the QE2 talk.
Alcoa Inc marked the unofficial start to earnings season, rising 5.7 per cent to $US12.89 a day after its results beat estimates. While the stock rose sharply, it was far from the market’s focal point, which hinged on the expectation of the Fed’s action.
Investors are getting fatigued and bids on the 30-year bond might be a little bit weaker from past auctions, according to Wells Fargo’s Jacobsen.
A decline in interest would suggest “people are more interested in going into equities rather than bonds,” he said.
Turning the balance even further in favor of the bulls, expectations of more easing from the US central bank should keep the dollar on a downtrend, which is another signal of gains for Wall Street.
An inverse correlation between the greenback and US stocks has prevailed strongly in the last weeks The 30-day correlation between the S&P 500 and the dollar index was at -0.88, while the 50-day correlation was -0.89.
That said, with the International Monetary Fund meeting discussing the issue of competitive currency devaluations and shorts on the US dollar piling up, a big move up on the greenback may become a hurdle for stocks.
S&P 500 charts show the previous resistance at 1150 has turned into short-term support, with the next resistance level around 1170-1175. The current trend channel doesn’t hit that area until late next week.
Options trading implies low volatility levels, as reflected by the CBOE Volatility Index and the CBOE Nasdaq 100 Volatility Index, said Scott Fullman, director of derivative investment strategy at WJB Capital Group.
In the small cap area, BZTG should move on to become Heffernan Holdings finally, AEMC is set to release an all new company with Hollywood legend Christine Peters in the lead role, FBCD is due to file some information that will show the public who they are in some detail this is a hot little company with good revenue and profits, rumors persist about a change of control at RNNM, NPWZ is set to make a huge comeback, the collapse of Jessup had an impact there that they have ben busy working around, now a new, cost effective model is in place it should move higher.
PGI Energy Fund will list late in the week and put UPNT on your watch list there is a lot of activity around that one.
WLSI is making a steady comeback and it will slowly move forward for a while and then see a strong rally.
TOMZ has been trading like it is going to recover, any news there will speed that process up fast.