Resurgence of the virus is now being experienced across the world as cases spike, leaving global economies scrambling to put in place measures to contain the spread. Tech-related stocks are again in the limelight, with Apple Inc's stock price rising steadily after the unveiling of the new iPhone 12. Ongoing uncertainties left global equities to end the week mixed, with stock prices in US and China climbing higher whilst most other major Asian indices, along with the European market losing ground.

 

In the News

  • The rapid rise in the resurgence of the virus has left many facing the rising possibility of a lockdown. Cases now stand at 38.9 million, with more than 1 million fatalities from the pandemic.
  • The US saw its highest daily numbers when more than 60,000 cases were reported in a single day. 
  • US equities, which had seen a boost in the previous week from optimism of a possible stimulus package, managed to eke out marginal gains as little progress was seen on the stimulus front.  
  • Hopes of a vaccine was dampened when trials being carried out by Johnson & Johnson’s, and Eli Lilly were halted after its antibody treatment resulted in adverse reactions for testers. News that Pfizer was preparing to seek emergence authorisation for its vaccine did, however, lift markets at the end of the week.
  • US corporates have started to release their 3rd quarter earnings results, and analysts are expecting many across the S&P to report a 20% decline in earnings due to the pandemic effect.
  • The release of Apple Inc’s iPhone 12 helped push the company’s stock price higher, contributing to the better performance of the tech-sector last week. The NYSE FANG+ Index, which tracks the performance of 10 of the largest US tech names, rose 1.32% last week, pushing the 0830EA to see a gain of 1.97% over the same period. 
  • European equities tumbled on the back a spike in pandemic cases, and the increasing possibility of a no-deal Brexit.
  • Tighter movement controls have already been put in place in a bid to avoid a lockdown that could further impact the economy. 
  • China equities roared back into the market after its 8-day long Golden Week holiday. The Shanghai Composite, and the CSI 300 Index both rose 2.18%, and 2.58% respectively. The S&P New China Ex A Share Index also climbed alongside the broader China market, gaining 1.09% over the week, benefitting from the strong run in tech-related names. The 0829EA, which tracks the Index, rose 1.22% over the week to bring its YTD gains to 29.6% in MYR terms.
  • Sentiment for the China market remains strong, with the September trade data reinforcing the belief that China’s economy is, in fact, back on track. IMF is forecasting China to see a full year GDP growth of 1.9%, whilst the rest of the world faces economic contraction.
  • On the local front, politics and rising pandemic cases have stolen the limelight. However, local momentum stocks did manage to rise over the week despite the uncertainties that led to the KLCI sliding 1.73% lower. The Dorsey Wright Technical Leaders Malaysia Index climbed 0.51% to push the 0836EA to rise 0.62% over the same period. 
  • The on-going uncertainties have kept Gold price to remain steady above the USD1,900 per ounce level. The 0828EA, which tracks the performance of Gold price, rose marginally higher as investors turned towards safe haven assets amidst rising uncertainties. The 0828EA ended the week at MYR2.5433 per unit after inching 0.18% higher last week.

 

On the Economic Data Front

  • US jobless claims return to a high:
    • Weekly jobless claims rose to a 2-month high of 898,000. 
    • Continued claims did however reduce from 11.2 million, to 10.1 million.
    • Core CPI rose 0.2% in September – said to be attributed by the increased usage of vehicles amidst the pandemic.
    • Retail sales rose above expectations to 1.9% – a 5th consecutive monthly increase.
    • Industrial production fell 0.6% – dragged down by weakness in the vehicle, and electronics segment.

  • China’s trade data boosts confidence:
    • Export numbers grew 9.9% YoY in September, rising for the 4th consecutive month.
    • Import numbers also rose, pointing towards a recovery in domestic demand. 

 

ETF strategies at TradePlus

 

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

 

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