Consolidation as Market Awaits Jackson Hole Speech

Blue chips slipped from early highs on profit-taking interest Tuesday, following the previous day’s strong 1.5% rally to a near four-year high as the market paused for profit-taking breather due to short-term overbought conditions. The FBM KLCI slid 5.93 points to close at 1,642.77, off an early low of 1,637.45 and high of 1,660.29, as losers beat gainers 857 to 357 on higher turnover of 4.2bn shares worth RM4.55bn.

Resistance at 1,660/1,680; Immediate Supports at 1,620/1,600

Stocks should extend profit-taking consolidation, as investors assess key central bank decisions from regional power houses and anticipate the keenly awaited US Fed Chief’s statement at Jackson Hole. Immediate index resistance remains at yesterday’s high of 1,660, followed by 1,680 and then 1,695, the Dec 2020 high, while immediate supports are at 1,620, then 1,600 and 1,580 as stronger supports.

Bargain Hartalega & Kossan

Hartalega will need strong breakout momentum above the 100-day ma (RM3.08) to fuel further upside towards the 123.6%FP (RM3.44) and 138.2%FP (RM3.68) ahead, while key retracement support below from the 61.8%FR (RM2.42) limits downside risk. Likewise, Kossan needs confirmed breakout above the 100-day ma (RM2.23) to enhance upside momentum towards the 123.6%FP (RM2.44) and 138.2%FP (RM2.59) going forward, with the 50%FR (RM1.68) seen to cushion downside.

Asian Markets Mixed as Traders Digest Economic Data

Asian markets traded mixed on Tuesday as traders digest key economic data from China and Australia ahead of US Fed Chair Jerome Powell's speech at Jackson Hole later this week. The People's Bank of China kept its benchmark loan prime rate unchanged following a surprise cut in July. China’s loan prime rates were held at 3.35% for the one-year LPR and 3.85% for the five-year LPR, in line with expectations from a Reuters poll of economists. Separately, the minutes of Reserve Bank of Australia's recent meeting showed the central bank had considered raising interest rates earlier in August. With the data calendar relatively light across major economies this week, all eyes are on Wednesday's release of the Fed's July meeting minutes and Chair Jerome Powell's speech at Jackson Hole on Friday for clues on the outlook for U.S. rates.

Traders will also watch to see if the yen keeps strengthening against the greenback ahead of Bank of Japan Governor Kazuo Ueda’s appearance in parliament Friday, where he’s expected to shed light on the policy outlook. Japan’s Nikkei 225 jumped 1.80% to close at 38,062.92, while the broad-based Topix gained 1.11% to 2,670.54. Australia’s S&P/ASX 200 rose 0.22%, ending at 7,997.70 and South Korea’s Kospi added 0.83% to 2,696.63. However, the Shanghai Composite fell 0.93% to 2,866.66, while the Hang Seng index slipped 0.33% to 17,511.08.

Wall Street Tick Lower Ahead of Jerome Powell Speech

Wall Street’s major indexes ticked lower overnight as the focus shifts to Fed Chair Powell's speech at Jackson Hole later this week. The Dow Jones Industrial Average fell 0.15% to

40,834.97. The S&P 500 slid 0.20% to 5,597.12, while the Nasdaq Composite shed 0.33% to 17,816.94. Trading activity remained relatively subdued as traders seemed reluctant to make significant moves ahead of the minutes of the Federal Reserve's latest monetary policy meeting, which are due to be released late Wednesday. Later in the week, remarks by Fed Chair Jerome Powell and other Fed officials at the Jackson Hole Economic Symposium are also likely to attract attention.

Fed policymakers have in recent days signaled possible easing in September, priming markets for a similar tone from Powell and other speakers at the annual meeting of global central bankers in Jackson Hole, Wyoming. Beyond earnings, Bank of America slipped around 2.5% as Warren Buffett’s conglomerate Berkshire Hathaway continued dumping shares. Health Care and Consumer Staples were the only two sectors in the green, while Energy, Industrials, and Financials served as the day's biggest laggards.

Source: TA Research - 21 Aug 2024