Dear all,
Last night, US dives 500 points ahead of FED interest rates decision this coming Wednesday. Donald Trump tweeted his support towards FED raising interest rates. This statement had contradicted with his previous slamming on FED’s action of increasing interest rates.
Market investors and traders are still uncertain on the next move by FED. Many expects FED will increase interest rates on Wednesday, however with slowing down economic growth FED might think twice on increasing interest rates. Also, with recent Federal Reserve Chairman, Jerome Powell indicating interest rates are near neutral level.
The KLCI close lower by 6.31 points or 0.38% to close at 1635.31 following US Dow’s drop last night. Losers edge gainers by 699 to 222 while 983 counters remain unchanged. Volume was higher at RM1.8426 billion as compared to at RM1.1739 billion.
Falling crude oil prices have add on some pressure for our local market. Crude oil price fell below the $50 psychological support hinting for further downside to come. $50 crude price is roughly 30% lower than our $70 price used in our budget 2019 estimates. With falling crude oil prices, there will be concern on government’s ability to meet its budget deficit target.
Will there be any year-end rally or the ‘Santa rally’ globally to close the year 2018?
With most of the indices worldwide trading below its 50-100-200 moving averages, we are in doubt of a strong closing on year 2018. Traders and investors are strongly advice to trade with care and be defensive in markets like this.
All the best for a great Wednesday but be cautious as the overall sentiment of our market is bearish.
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