The rate of pandemic cases remains high with global number of cases now recorded at over 43 million. US indices reversed its 3-week gain amid ongoing uncertainties surrounding stimulus package negotiations. China recorded a 4.9% expansion in GDP for its third quarter, outpacing markets worldwide in terms of growth, and economic recovery from the pandemic. Locally, the market dipped as political uncertainty intensifies and pandemic case numbers continue to rise. Gold posted marginal gains of 0.34% to end the week at USD1,910/oz.

 

In the News

  • COVID-19 cases continue to grab headlines, with the US seeing record daily high new infections in the past week, while Malaysia recorded over 1,000 daily new cases for the first time.
  • The total number of COVID-19 cases worldwide now records at over 43 million, with over 1.1 million deaths.
  • Hopes for an approved stimulus package before the upcoming US elections appear dim, as uncertainties about the prospects of aid continued throughout last week. 
  • Investors also kept a lookout for third quarter earnings last week, with 84% of reported earnings beating consensus estimates.
  • While the start of the third quarter earnings showed positive results, major indices in the US reversed its 3 week gains due to uncertainties brought on by the stimulus package negotiations. The tech-heavy Nasdaq fared the worst throughout the week, dipping 0.84%, while the S&P 500 slid  0.31%.
  • While the broader tech index dipped the most last week, the FANG+ index outperformed the market, gaining 0.78% as Twitter and Google’s parent company Alphabet led gains despite a significant dip in Netflix. The 0830EA, which provides a 2x leveraged exposure into the index, ended the week 1.30% in the green with YTD gains of 120.59% in MYR terms.
  • China revealed its third quarter GDP, reporting a 4.9% annual rate growth as compared to a 3.2% rate in the second quarter. The YTD growth rate for China has turned positive at 0.7% y-o-y, further solidifying the country’s comeback since the pandemic hit China early this year while the rest of the world continues to grapple with the virus. Read more about the economy’s growth drivers here.
  • E-commerce giant Alibaba has started promotions for its annual Singles Day sales, with demand expected to surge this year as the pandemic continues to keep international borders closed. Ant Financial, in which Alibaba Group holds a majority stake in, has gotten its final approval for its highly anticipated IPO listing.
  • The S&P New China Sectors Ex A Share Index, which includes Alibaba Group as one of its top 10 holdings, outperformed the market, gaining 0.87% last week, as the CSI300 Index and the Shanghai Composite Index dipped 1.15% and 1.38% respectively in MYR terms. The 0829EA saw gains of 0.61% last week, with a YTD gain of 30.36%.
  • Locally, politics and the rising coronavirus cases continues to grab news headlines, contributing to rising uncertainties in the country.
  • Prime minister Muhyiddin Yassin’s proposal to declare a state of emergency over the COVID-19 crisis was rejected by the King, who also warned politicians against politicking which might threaten the stability of the country.
  • With rapidly rising pandemic cases and political uncertainties, the FBM KLCI dipped 0.61% last week. Nevertheless, we still saw momentum drivers within the domestic space, which led to the momentum-focused Dorsey Wright Technical Leaders Malaysia Index to gain 0.14% despite the broader weakness.  
  • Gold price posed marginal gains last week, recording at USD1,910/oz amid global uncertainties. The TradePlus Shariah Gold Tracker (0828EA), which tracks the Gold price index upped 0.22%, while YTD returns in MYR terms for the ETF is now at 26.11%. 

 

On the Economic Data Front

  • US economy reports encouraging data:
    • Weekly jobless claims fell to 787,000, its lowest level since March
    • Continuing claims continues to fall sharply, from an expected 9.4 million to 8.4 million.
    • While overall housing starts missed expectations, existing home sales rose by 9.4% in September, a 14-year high.

  • EU economic recovery losing momentum:
    • Several countries have tightened mobility restrictions in attempt to curb virus resurgence. 
    • Composite PMI data fell to 49.4% in October, signalling a contraction in business activity in the region.   
    • Services PMI dipped to 46.2 from 48.0, due to stricter coronavirus restrictions.
    • UK government amends bailout plan to further support workers affected by lockdown measures.

  • Chinese economic recovery outpaces the world:
    • Third quarter GDP records expansion at 4.9% from a year earlier.
    • Industrial outputs increased by 1.2% in September, surpassing pre-pandemic levels.

 

ETF strategies at TradePlus

 

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

 

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