Stalemate in US-China Trade Deal
Trump latest roller coaster update suggests that there is no point in negotiating with China if the deal he wanted cannot be met. On the other hand, he did make it clear that he would only restart talks after the election meaning that it is largely a strategic move. Knowing that status quo will allow US to continue milking the Feds for cheap dollars and for the economy to continue growing. That said, if China continue to refuse US’s terms, they will need to scramble and prevent industries from going to other SEA countries for manufacturing needs.
From my point of view, the market will have to stay relatively stable until US elections to keep Trump in power. Thus, it should remaining another year of high volatility and consolidation even for solid but mature counters in Singapore.
Zoom out view of STI showing consolidation
STI – Updated Weekly Chart
STI tested support at 3180 for week (1-6 Dec), however it was supported by the optimism of the festive period. Whether or not it rallies upwards to 3285 will be determined by US market which is currently all green as of last closing on 6 dec. Will see a slightly excited maket on 9 Dec.
Author Calls
- STI rallying towards 3220 then 3285 (Updated from 3280)
- Support at 3190 held for week (1-6 Dec)
- Festive period will call for more optimism in the market
- HK mellowed after Police permitted their protest
Author Calls (As of 1 Dec)
- STI rallying towards 3280 (Update from 3360- drop of 80 basis points)
- 3220 broke and STI might test it again in the coming week.
- HK Bill signed creates room for potential volatility in the markets
- Q3 reporting is over and STI will continue to lay low for the time being
- Instead of pumping money back into the market, many retail might hold instead of accumulate
