The world added over 2 million new COVID-19 cases last week, with total number of cases now over 46.8 million. Multiple parts of the EU went into lockdown amid a surge in COVID-19 cases, which has now surpassed the 10 million mark. US indices saw its worst weekly dip since March, as the effects of various uncertainties outweighed the better-than-expected earnings results and GDP reports. Local markets trailed the negative global sentiment in the week, as local indices were further dragged down by political uncertainties and budget concerns. Gold was also not spared, ending the week below the USD1,900/oz level.
In the News
- COVID-19 cases increased by over 2 million last week, as the rate of daily infections continue to accelerate across the globe. There are now over 46.8 million cases, with 1.2 million deaths.
- Europe surpassed 10 million cases of the coronavirus yesterday, recording half of its cases within a month. With the rising rate of infections, the UK, France, and Germany have implemented lockdown measures as an effort to curb infections.
- In the US, GDP reports for the 3rd quarter beat analysts’ expectations of around 31%, as the US economy recorded a GDP expansion of 33.1% (QoQ annualised), recovering from the 31.4% dip in the last quarter.
- With US elections happening this week, hopes for a pre-election stimulus package turns unlikely, but talks are expected to continue after the elections on Tuesday (3/11).
- Earnings reports continued last week, with a reported 86% of companies reporting earnings that exceeded expectations. However, sentiment was heavily weighed down by diminishing hopes for stimulus aid and rapidly rising pandemic numbers, as US indices suffered its second straight week of losses, posing steepest weekly declines since March.
- All major indices closed in the red last week, with the S&P 500 recording losses of 5.73% throughout the week, while tech heavy Nasdaq posed losses of 5.60% in MYR terms.
- Several of the major tech giants reported their earnings last week, with Facebook, Alphabet (Google), Amazon, Twitter and Amazon reporting better than expected earnings last quarter. However, stock prices continued to dip despite the news, causing the FANG+ index to dip 6.02% throughout last week. The 0831EA, which provides a -100% exposure into the index, ended the week 5.49% in the green , benefitting from the declines in the market.
- Chinese officials met for the Fifth Plenum of the 19th Party Congress last week to discuss the proposals for its next 5-year plan. The proposal stressed the importance of innovation and a push to reform the market via new economy industries, targeting higher spending for education and technology sectors such as 5G, AI and data centers.
- Major indices in China trailed the negative sentiment in the US, with the CSI300 Index shedding 0.67% while the Shanghai Composite Index dipped 1.80% in MYR terms over the week. The S&P New China Sectors Ex A Share Index dipped 0.85% last week while the 0829EA dipped 0.69% last week. The ETF is still posting YTD gains of 29.46% in MYR terms, and has announced its first income distribution last week.
- Locally, negative global market movement and various uncertainties such as rising case numbers, concerns over Budget 2021 and local politics also weighed down local markets last week. Over the shortened trading week, the FBM KLCI experienced a steady decline, posing weekly losses of 1.86%. The momentum-focused Dorsey Wright Technical Leaders Malaysia Index saw impacts brought on by high volatility in the market, dipping 2.37% over the week while the TradePlus DWA Malaysia Momentum Tracker (0836EA) ended 1.58% in the red.
- Despite the uncertainties, Gold price was also not spared from the negative sentiment in the market, dipping 1.92% throughout the week to end at USD1875/oz as the Dollar strengthened. The TradePlus Shariah Gold Tracker (0828EA), which tracks the Gold price index dipped 1.84%. The ETF is still recording YTD gains of 23.79% in MYR terms.
On the Economic Data Front
- US continues to see positive economic data:
- US 3rd quarter GDP records 33.1% (QoQ annualised) expansion, exceeding analyst’s expectations.
- Weekly jobless claims fell to the lowest since the pandemic started, while continuing claims continue its accelerated decline.
- Data for durable goods orders showed better than expected results in September, while core capital goods orders reached 6-year highs.
- EU reports mixed economic data:
- Eurozone GDP estimates show estimated growth of 12.7% in the third quarter, beating expectations.
- ECB leaves monetary policy unchanged, but signals possible additional stimulus by the end of the year.
- Consumer prices dipped for the second straight month, reporting a decline of 0.3% Y-o-Y.
- Chinese economic recovery outpaces the world:
- Industrial sector profits recorded around 10% growth in September from last year.
- Manufacturing PMI surpassed expectations, recording at 51.4 in October.
- Services PMI for October recorded at 56.2, an increase from 55.9 last month.
ETF strategies at TradePlus
A look at the performance of the TradePlus ETFs, and major global indices
Learn more about TradePlus ETFs
Disclaimer: This article has been prepared by AHAM Asset Management Berhad (“AHAM Capital”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to AHAM Capital and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of AHAM Capital. The information contained in this presentation may include, but is not limited to opinions, analysis, forecasts, projections and expectations (collectively referred to as “Opinions”). Such information has been obtained from various sources including those in the public domain, are merely expressions of belief. Although this presentation has been prepared on the basis of information and/or Opinions that are believed to be correct at the time the presentation was prepared, AHAM Capital makes no expressed or implied warranty as to the accuracy and completeness of any such information and/or Opinions. As with any forms of financial products, the financial product mentioned herein (if any) carries with it various risks. Although attempts have been made to disclose all possible risks involved, the financial product may still be subject to inherent risk that may arise beyond our reasonable contemplation. The financial product may be wholly unsuited for you, if you are adverse to the risk arising out of and/or in connection with the financial product. AHAM Capital is not acting as an advisor or agent to any person to whom this presentation is directed. Such persons must make their own independent assessments of the contents of this presentation, should not treat such content as advice relating to legal, accounting, taxation or investment matters and should consult their own advisers. AHAM Capital and its affiliates may act as a principal and agent in any transaction contemplated by this presentation, or any other transaction connected with any such transaction, and may as a result earn brokerage, commission or other income. Nothing in this presentation is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities. Neither AHAM Capital nor any of its directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (expressed or implied) arising out of, contained in or derived from or any omission from this presentation, except liability under statute that cannot be excluded.
Warning Statement: A copy of the Prospectus / Supplemental Prospectus for the TradePlus Shariah Gold Tracker and TradePlus S&P New China Tracker, the Prospectus for the TradePlus DWA Malaysia Momentum Tracker and TradePlus MSCI Asia Ex Japan REITs 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 (“AHAM Capital”) 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), Prospectus dated 15 January 2019 and Supplemental Prospectus dated 2 July 2019 (for TradePlus S&P New China Tracker), Prospectus dated 9 July 2020 (for TradePlus DWA Malaysia Momentum Tracker), Prospectus dated 9 July 2020 (for TradePlus MSCI Asia Ex Japan REITs 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.
You may refer to the relevant Licensing Disclosure Statement & Conditions at the respective webpages for each fund available on www.tradeplus.com.my.