Death count of the conoravirus pandemic hit the 1 million mark, as countries around the world continue to battle the resurgence of the virus. Negative market sentiment brought on by various uncertainties caused the broader S&P500 index to dip 0.6%, while tech-focused Nasdaq posted gains of 1.11% (both quoted in USD terms). Gold prices remain under pressure as USD appreciates, ending the week at USD 1,870/oz.

 

In the News

  • The number of pandemic cases worldwide jumped about 2 million in a week as many parts of the world saw a surge in infections. The total number of infections is now above 33 million globally.
  • Some countries in the EU region implemented stricter containment measures in attempt to slow down the surge in cases with concerns of overloading hospitals.
  • Number of deaths worldwide has passed the 1 million mark on Sunday (27/9), as the WHO recorded a global surge in case numbers in mid-September, warning the possibility of death numbers doubling if more collective actions are not taken.
  • While the US has seen encouraging economic recovery numbers, US Fed Chair Jerome Powell has warned of a possible deceleration in economic activity if Congress fail to pass additional fiscal stimulus.
  • Hopes for more fiscal stimulus in response to the pandemic was renewed as the Democrat party put together a smaller relief package, with an estimated cost of about USD 2.4 trillion in hopes to restart stimulus negotiations with the White House.
  • Dampened by the surge in pandemic cases and its impact on economy, coupled with allegations of money laundering activities amongst major global banks, the broader S&P 500 index recorded its 4th consecutive dip, ending the week 0.6% in the red in USD terms. However, the strong appreciation in USD saw the index gaining 0.7% in MYR terms 
  • However, the technology sector proved its resilience as tech-focused Nasdaq defied general sentiment to gain 2.52% during the week.
  • The FANG+ index outperformed the broader indices, posing gains of 3.25%. The 0830EA, which provides a 2x leveraged exposure into the index, saw gains of 4.05% throughout the week. The ETF has recorded YTD gains of 90.77% in MYR terms.
  • As the world’s largest energy user, China has reiterated its climate change goal, to reach peak carbon emissions by 2030 and become carbon neutral by 2060. The goal signifies the country’s preparedness to invest into renewable energy, which include capacity installation in clean energy, developing electrical vehicles and innovation in alternative sources of energy.  
  • The renewable energy sector is part of the New China Economy, which aims to transform China’s manufacturing focused economy into consumption based. The 0829EA/EB, which tracks the S&P New China Sectors Ex A Share Index also provides exposure into the sector. The Index slid 2.04% lower over the week, staying more resilient against the CSI300 Index, and the Shanghai Composite Index, both of which tumbled approximately 3.0% over the week in MYR terms.
  • Local markets were volatile last week, with uncertainties brought on by politics, rising pandemic case numbers and the looming end to the moratorium on loan repayments.
  • Politics flooded local news last week, as leader Anwar Ibrahim requested an audience with the King after claiming to have majority in parliament. However, the Sabah elections which ended with a win by the ruling coalition, Gabungan Rakyat Sabah (GRS), could diminish Anwar’s hopes of overthrowing the current government.
  • The FBM KLCI ended the week mixed with a marginal gain of 0.17%. Despite the strong volatility throughout the week, the momentum-focused Dorsey Wright Technical Leaders Malaysia Index outperformed the broader market to gain 1.38%.  The Index, which is tracked by the TradePlus DWA Malaysia Momentum Tracker (0836EA), benefitted from the rise and gained 1.51% over the week.
  • Despite global uncertainties and volatility seen across markets, and the USD saw its best 5-day performance in 6 months, which led to gold price to be under pressure, ending the week at a 2-month low of USD 1,870/oz. 
  • However, analysts are still expecting the precious metal to rebound, citing the ongoing pandemic, coupled  by economic and geopolitical uncertainties. TradePlus Shariah Gold Tracker (0828EA), which tracks the Gold price index, is still posting YTD gains of 25.22% in MYR terms. 

 

On the Economic Data Front

  • US economic data shows continued slow recovery:
    • Initial jobless claims inch higher to 870,000.
    • Continuing claims exceeded expectations of 12.7 million, recording at 12.6 million.
    • Core capital goods orders rose 1.8% in August, while July numbers were revised higher.
    • New home sales reached a near 14-year high. 

  • Economic data signals a slowdown in recovery in the EU:
    • Sentiment in the EU was dampened with a spike in pandemic cases across the region, pushing governments to implement stricter containment measures.
    • The UK reveals a smaller jobs-support program, reducing support to 22% from 60% triggering unemployment fears. 
    • Manufacturing PMI in the Eurozone recorded at 50.1% in September, while services PMI slid below 50, signalling a slowdown in economic recovery.

  • Key Chinese economic data expected this week:
    • FTSE Russel includes Chinese Government Bonds in its widely used World Bond Index.
    • Official PMI numbers for September is expected to be released mid this week, with analysts are forecasting a rise in Manufacturing PMI and a dip in non-manufacturing PMI.

 

ETF strategies at TradePlus

 

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

 

 

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