Sideways Ahead of Key US Inflation Data

Bursa Malaysia blue chips stayed mostly range bound on Monday, as investors wait for more evidence on easing inflation on global economies before committing fresh positions. The FBM KLCI rose 2.24 points to close at 1,602.91, off an early high of 1,604.8 and low of 1,600.43, as gainers led losers 642 to 494 on robust turnover of 4.53bn shares worth RM3.01bn.

Resistance at 1,620/1,640; Supports at 1,572/1,558/1,532

Stocks are likely to trade sideways in the immediate term as market players await key US inflation data for further clues on the likely direction for interest rates. Immediate resistance for the index stays at 1,620, with stronger upside hurdles seen at 1,640 and then 1,660. Immediate uptrend supports will be at 1,572, 1,558 and 1,532, which are the respective rising 30-day, 50-day and 100-day moving averages.

Bargain Genting & GENM

Genting will need convincing breakout above the 61.8%FR (RM4.74) to ensure challenge of the 76.4%FR (RM4.92) and 11/3/24 high (RM5.20) ahead, while the 200-day ma (RM4.51) provide strong chart support. Genting Malaysia need breakout confirmation above the 61.8%FR (RM2.73) to enhance upside momentum towards the 76.4%FR (RM2.81) and 27/2/24 high (RM2.94) going forward, while the 38.2%FR (RM2.60) provide good retracement support.

Asian Markets Wobble Ahead of Key Economic Data

Asian markets wobbled in Monday trading as traders await key U.S. economic data for clues on the Federal Reserve’s interest rate path, while Chinese activity data will test optimism about a sustained recovery in the world's No. 2 economy. Traders remain cautious ahead of the crucial U.S. inflation data later this week that could offer important clues on the Fed's rate trajectory. Traders will look for insights into the Federal Reserve’s monetary policy moving forward with April’s consumer price index report due out on Wednesday. In the region, Beijing has already reported a welcome pickup in inflation to an annual 0.3% in April, helping to soothe worries about a slide into prolonged deflation.

Forecasts favors further gains in April retail sales and industrial output due on Friday. There are also reports Chinese authorities are laying the groundwork for a sale of 1 trillion yuan in longer-dated bonds to help fund stimulus spending at home. Japan’s Nikkei 225 fell 0.13% to 38,179.46 and the broad-based Topix lost 0.15% to 2,724.08. In Australia, the S&P/ASX 200 closed almost unchanged at 7,750.00, while the Shanghai composite index fell 0.21% to 3,148.02. South Korea’s Kospi ended flat at 2,727.21 and small-cap Kosdaq fell dropped 1.13% to 854.43.

Wall Street Slips for First Losing Day in Nine as Expectations for Inflation Rise

US stocks slipped overnight, snapping an eight-day winning streak, as traders wrestled with rising inflation expectations ahead of key reports due later this week. The 30-stock Dow Jone average fell 81.33 points, or 0.21%, to close at 39,431.51. The S&P 500 inched lower by 0.02%, ending at 5,221.42, while the Nasdaq Composite added 0.29%, closing at 16,388.24. A New York Federal Reserve survey showed consumers last month raised their expectations for price increases in both the near and long term. On a one-year basis, inflation expectations rose to 3.3%. Their five-year outlook ticked up to 2.8%. Stocks gave back earlier gains after the survey results were issued. The numbers also come ahead of two key economic data releases.

The consumer price index report is slated for Wednesday. Economists expect an April increase of 0.4% month over month and 3.4% year over year, according to Dow Jones. The producer price index, due out Tuesday, is expected to have risen 0.3% last month. Shares of meme stock GameStop soared 74% after “Roaring Kitty,” the moniker of the Reddit trader behind 2021′s short squeeze, posted online for the first time in three years. The major averages have clawed back to within reach of their record levels set in March following a brief pullback. The Dow, S&P 500 and Nasdaq are all within 1% of their closing highs.

Source: TA Research - 14 May 2024