After the stumble in the previous week, global financial markets dusted itself off and got back onto its feet to continue its climb last week with tech-related stocks, as well as the stocks in the energy sector taking lead. Investors’ sentiment was boosted by better than expected retail sales numbers flowing out of the US, news that the US Feds would be expanding its bond-buying program to also include corporate bonds, as well as the reopening of more key economies. 

 

In the news

  • It was generally quiet on the economic data front last week. However, what little that was announced had drove global financial markets higher after stumbling in the previous week caused by concerns over the rising number of infection cases. 
  • Investors cast aside concerns on the rising number of pandemic cases, which now stands just below 9 million cases globally, with the US recording more than 2.3 million cases, and more than 120,000 deaths.
  • Sentiment was boosted by the US Fed’s announcement that it would be expanding its bond-buying program to also participate in individual corporate bonds, more encouraging retail sales numbers, as well as the reopening of key economies.
  • The technology sector continued to strengthen, with the NYSE FANG+ Index rising 3.9% in MYR terms last week with the support of its underlying components as all 10 names saw steady gains in stock price. The strongest performance came out from media streaming co, Netflix Inc, which rose 8.5% in USD terms. The strength of the sector benefitted the 0830EA, which saw its NAV rise by 7.1% last week in MYR terms. 
  • Brexit talks resumed between the UK and the EU, with the UK Prime Minister being optimistic that an agreement could be reached by July this year.
  • China saw a resurgence in pandemic cases, which resulted in the implementation of movement restrictions as fears of a 2nd wave emerged.  But given the experience and the success in containment earlier, experts believe that China will be able to manage the situation should there be a resurgence.
  • Fears were casts aside, pushing China’s equity market higher as most key China related indices ended the week on a stronger note. The performance was led by the consumption-centric S&P New China Sectors Ex A Share Index, which climbed 3.5%, whilst the CSI 300 and the Shanghai Composite rose 2.5% and 1.8% respectively.  The 0829EA, which tracks the said consumption-centric index rose 3.6% last week, to bring its YTD gain to 13.6% in MYR terms. 
  • Oil prices spiked 9.6% last week and briefly rose above the USD 40 per barrel mark before ending the week just marginally lower at USD 39.75 per barrel on Friday. Prices saw support through the expected rise in demand on the back of more economies reopening for business, whilst the cut in production by major oil producers continue.
  • With risk appetite returning, Gold price took a breather compared to the major equity indices. The 0828EA closed the week marginally lower, but holds tight to its position as one of the strongest performing asset classes for the year with a YTD gain of 17.8% in MYR terms.

 

In other economic news

  • US retail sales data shines glimmer of hope
    • Retail sales were reported to have seen a 17.7% surge in May – its biggest monthly gain in history. 
    • However, jobless claims continue to remain high with another 1.5 million Americans putting in their claim last week.
    • This marked the 13th week that unemployment claims have remained above 1 million.  Total claims now stand at 45.7 million for this 13-week period.
  • UK increases its stimulus as economic data stays weak
    • Bank of England took lead from the US Feds, and announced that its bond-buying program would increase by GBP 100 billion.
    • Inflation rate for the economy had slowed to a 4-year low of 0.5% in May, which has been attributed to the weaker oil price.
    • Employment data has not been encouraging, with 528,000 unemployment claims made in May as job cuts continued across the country. 

     

 

ETF strategies at TradePlus

  • To Hedge:
    • 0828EA – a Gold-backed ETF widely used as a storage of value in times of market uncertainty.
    • 0833EA – a HSCEI Inverse strategy that helps hedge your portfolio against weakness from the performance of China companies listed on the HKex.
    • 0831EA – the NYSE FANG+ Inverse strategy that hedges against the performance of tech stocks listed in the US.
  • To Add Position:
    • 0829EA / 0829EB – a strategy that gives investors exposure into the consumer focused sector through China companies listed in HK, and the US.
    • 0832EA – a 2X leveraged strategy on the HSCEI that captures 2 times the performance of China companies listed on the HKex.
    • 0830EA – a 2X leveraged strategy on the NYSE FANG+ that captures 2 times the performance of US listed tech stocks.

 

A look at the performance of the TradePlus ETFs, and major global indices

 

 

Learn more about TradePlus ETFs

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Warning Statement: A copy of the Prospectus / Supplemental Prospectus for the TradePlus Shariah Gold Tracker and TradePlus S&P New China Tracker, as well as the Master Prospectus for the TradePlus NYSE® FANG+ Daily (2x) Leveraged Tracker, TradePlus NYSE® FANG+ Daily (-1x) Inverse Tracker, TradePlus HSCEI Daily (2x) Leveraged Tracker and TradePlus HSCEI Daily (-1x) Inverse Tracker (collectively known as the “TradePlus L&I ETFs”) can be obtained at Affin Hwang Asset Management's (“Affin Hwang AM”) website at www.tradeplus.com.my. Investors are advised to read and understand the contents of the Prospectus dated 28 November 2017 and Supplemental Prospectus dated 2 July 2019 (for TradePlus Shariah Gold Tracker), and Prospectus dated 15 January 2019 and Supplemental Prospectus dated 2 July 2019 (for TradePlus S&P New China Tracker), as well as the Master Prospectus dated 26 November 2019 (for the TradePlus L&I ETFs) before investing. There are fees and charges involved when investing in the funds stated herein. Investors are advised to consider and compare the fees and charges as well of the risks carefully before investing. Investors should make their own assessment of the risks involved in investing and should seek professional advice, where necessary. The price of units and distribution payable, if any, may go down as well as up and past performance of the funds should not be taken as indicative of their future performance. The Securities Commission Malaysia has not reviewed this material and takes no responsibility for the contents of this material and expressly disclaims all liability, however arising from this material.

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