Sunset Strip > Trading Day Wrap From Blue Ocean 20170821

Mathan Somasundaram
Mathan Somasundaram Blue Ocean Equities

Local market fell on global sentiment despite bounce in Iron Ore and Oil. US market heads the negative catalyst list. US market risk remains key for local market…(1) VIX looks to break above post election high (2) Russell 2000 (i.e. US domestic facing) has pulled back below 200 day MA (3) Spot Gold looks to be pushing above the post election high near US$1290 (4) US transport index has started to pullback unlike the US industrials (5) Global inflation and wages growth remaining low (6) US internal political unrest continues to weigh on fiscal reform (7) US and geopolitics (i.e. Middle East, North Korea and Venezuela) (8) US on global trade with China (9) Central banks globally remaining dovish despite corporate recovery…Jackson Hole meeting 24-26th August where Yellen and Draghi will speak (10) US Fed will start to reduce their balance sheet in the back end of 2017. The local politics remains in a mess as dual citizenship problem keeps expanding. Federal government has now lost 18 polls in a row…counting down to 30 set by the currency PM after toppling the last one. The lack of any strong macro sentiment breaker meant that market was mainly negative with reporting season volatility thrown in. We see good buying opportunity opening up over the next month as investors over react to negative sentiment!!! The best performing sectors were Energy, Staples and Gold while the worst performers were Telecom Services, Health care and IT.

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