Reported 3 months ago
Market report from Sun Jiaming, an analyst at Guo Securities, on July 17, 2024, 1:10PM: The US Labor Department announced a 0.1% decline in June Consumer Price Index (CPI) compared to the previous month, with a 3% increase from the same period last year; the Core CPI increased by 0.1% from the previous month and by 3.3% annually, below market expectations, leading to speculations of interest rate cuts. Fed Chairman Powell’s dovish remarks further supported the expectation of rate cuts. Despite uncertainties around the US presidential election, bond yields remained stable, bolstering market expectations for rate cuts. The market now anticipates a three-time rate cut this year instead of two, with potential positive effects of easing Fed policies. In the stock market, after reaching highs, money seems to be shifting towards undervalued assets from technology stocks, causing the Taiwan weighted index, led by tech stocks, to perform weaker this week. The overall market, facing profit-taking pressure after recent gains, displays signs of consolidation, with uncertainties related to the US election and profit adjustments post uptrend adding pressure on the market. Investment advice includes an uptick in interest in fixed income products post Powell’s hearing, urging focus on high-yielding assets; however, despite the likelihood of market consolidation in Taiwan stocks, interest is shifting to lower-tier, undervalued, and mid-cap stocks. The performance of bond ETFs, especially those with longer durations, is being closely monitored given the probability of rate cuts. Additionally, the clothing and footwear industries are entering the traditional peak season, benefiting from reduced inventory turnover days among international apparel and footwear brands, hinting at imminent inventory replenishments. Noteworthy stocks include Ru Hong, Ju Yang, and Lai Yi-KY amongst others. While the market is in a consolidation phase post a rise, long-term prospects for major heavyweights like TSMC and Foxconn remain positive, warranting attention despite the consolidation phase.
Source: YAHOO