Business

Exciting week ahead for investors

The partying may have to take a slight pause this week, giving investors a little breather following the banner sessions last week with regional and United States indices closing at new record highs.

The Hong Kong and Singapore markets ended the previous week on a sweet note, amid strong earnings and momentum, alongside higher trading volume, noted analyst Margaret Yang of CMC Markets.

"In the local market, earnings from Genting Singapore, Singapore Airlines, CapitaLand, City Developments, UOL, Yangzijiang Shipbuilding and Sats have all surprised investors in a positive way. Despite some volatility that came through the US market as a result of uncertainties surrounding the tax Bill, Asian markets have exhibited resilience against that headwind," she points out.

Even after concerns over the delayed US tax reform, the benchmark Straits Times Index still managed a 1.1 per cent rise for the week.

Last Friday, it lost 3.81 points to close at 3,420.1.

Asked about the outlook for the week, Ms Yang said: "Against the backdrop of positive earnings and relative cheap valuation, the outlook of Singapore market biased towards the upside in the days to come."

If the economic calendar is anything to go by, the week ahead will likely be anything but dull as investors watch for local earnings and data flowing out of China and the US.

Still, following Wall Street's performance over the weekend, Singapore equities may be off to a slow cha-cha today.

The Dow Jones and S&P 500 had snapped an eight-week winning streak - their longest since 2013 - while the Nasdaq ended a six-week one.

Previously, some analysts said stocks in the capital goods and industrials sector such as Keppel, Sembcorp Industries and Wilmar International might benefit from a spillover effect, following "early cyclicals" like tech stocks and banks. Wilmar and Golden Agri-Resources' earnings slated this week will show how true this is.

DATA

Ms Yang said Chinese industrial production and retail sales data, as well as Germany and euro zone flash gross domestic product estimates, are expected tomorrow.

In what can possibly dampen the rather upbeat mood will be data from the US which dominates from Wednesday. These include consumer price index, retail sales, weekly petroleum status, industrial production and housing reports.

Also, US President Donald Trump's Asia tour is winding down with the Asean-US summit in Manila, which he will attend today after saying last week that the US will no longer tolerate "chronic trade abuses" at the Asia-Pacific Economic Cooperation Forum in Vietnam.

Tomorrow, he will meet Philippine President Rodrigo Duterte and join the East Asia Summit to discuss security issues in the region.

More importantly, investors will look out for signs of what is to come in terms of US monetary policy now that Mr Jerome Powell is picked to replace Ms Janet Yellen as Federal Reserve chair from February.

The move comes at a time when exits are leaving the most influential positions at the Fed open, including that of Mr William Dudley, who is president of the powerful Federal Reserve Bank of New York, as well as Mr Stanley Fischer, the Fed's vice-chair of the board of governors.

Remarks from some Fed speakers may clear the uncertainty. Ms Yellen is slated to speak on a European Central Bank panel alongside its chief Mario Draghi, Bank of Japan governor Haruhiko Kuroda and Bank of England's Mark Carney.

This article appears in The Business Times today. For full listings of SGX prices, go to http://btd.sg/BTmkts

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