Trump contracted Covid and the world shook
It is not the first time for any prominent political figure to be tested positive for COVID. The PM of the UK, Boris Johnson also contracted and recovered from the virus. Right after the news about Trump and the first lady, markets dipped and bounced back before the end of the day in STI. As we move towards the last quarter of the calendar year, STI is likely to climb amidst higher volatility. In today’s analysis, we will look at the historical performance of STI from October to December from 2016.
STI – Updated Daily Chart
Currently, STI is still showing no sign of recovery although retail buying pressure should have dropped significantly last week and institutional buyers are coming back into the scene. This is evident in the short spike back to the 2500 level in the past week.
STI – Updated Weekly Chart (Historical Reference)
From 2016, almost every last quarter of the calendar year has been bullish. This is partly because STI’s main constituents are banks and they are cyclical stocks. These counters are likely to benefit from the recovery phase as just recently moved to phase 3 from the post circuit breaker measures.
On the weekly chart, STI is still currently hovering between 2436 and 2533. I do believe that STI’s downsides are limited in the coming months and we should be seeing some upsides contributed by funds flowing back into the market. We will analyze the fund flows again next week to confirm if funds are indeed coming back.
Author’s Call as of 4th October 2020
- Trump’s condition is stable but is likely to negatively impact risk assets in the world as Biden’s supporters grow
- STI showing some level of resilience in the past week (potentially funds are coming back to SG markets)
- Cyclical stocks might be benefiting from the recovery of the economy as SG move towards phase 3 (post-CB)
- STI is still hovering around 2436 to 2533 but does not show obvious signs of recovery
Author’s Call as of 27th September 2020
- The US-China fight continues with a small truce for the TikTok Global deal
- The second wave threatens the market again but people seem to be mentally immune to the news already
- Sectors affected by international travel are still balancing on support levels (SIA, SATS, G13)
- Retail investors continue to buy at low prices while institutional investors continue to sell
- Phase 3 news in Singapore has not impacted the market due to our reliance on tourist spending and prolonged trade tensions
