Asia Wealth Securities (AWS) released an analysis for the trading session on July 1, 2020, indicating the essential events in the stock market as follows:
Investment Overview Today – AWS sees that the SET Index is still volatile after yesterday, the market increased 9.27 points (+0.7%), partly due to the positive factors from the recovery of the domestic economy, including stocks in the group with specific positive factors, as AWS suggest in Daily Strategy paper yesterday (30 June). The fluctuation of the market today, AWS believes that this will be the result of the COVID-19 situation that has not seen any clear positive signs, including being cautious about profits taking in the energy sector after crude oil prices fell last night from concerns about supply problems from Libya, but there are still positive factors from expectations that the Chinese Central Bank will cut interest rates today.
Crude oil prices were still fluctuating. There was a negative factor from concerns over supply – After Libya is likely to resume producing crude oil for export which will affect the resolution of OPEC+ production capacity cuts. The latest data on Libya’s oil production capability is 1 million barrels per day which previously had to stop production due to the civil war.
Follow the Chinese Central Bank will cut interest rates today – The Chinese Central Bank plans to cut Re-leading interest rates to help small and medium-sized businesses and rural industry in terms of financial costs. It is expected that 3-month, 6-month, and 12-month interest rates will be at 1.95%, 2.15%, and 2.25% respectively.
Fed keeps interest rates at 0% until the economy recovers – The statement from the Ministry of Finance and the Federal Reserve (Fed) states that the Fed will keep policy rates at 0% -0.25% (no Negative Interest Rate) until The U.S economy will recover and stabilize prices, including employment at full capacity According to Fed’s target, the Fed Fund Future remains below 100 until mid-2021 (Source: Bloomberg)
The U.S. economic data in June are still a positive factor – The Conference Board (Economic Research Institute) survey found that the U.S. consumer confidence index rose to 98.1 in June from 85.9 in May and higher than analysts had previously expected. While the Purchasing Managers’ Index (PMI) in Chicago increased to 36.6 in June, up from 32.3 in May which was the lowest level in 38 years, and still lower than analysts expected. Also, the confidence index and the PMI index were increasingly supported by the positive as each state in the U.S. began to loosen the lockdown measures.
Key economic data for the U.S. this week – The Federal Open Market Committee (FOMC), non-farm payroll numbers in June, the weekly jobless claims, the unemployment rate in June and the trade balance in May.
Technical View – Today, AWS expects the SET Index to move in a range of 1,323 – 1,347 points (support at 1,335 1,331 and 1,323 points and resistance at 1,343 1,347 and 1,355 points). The recommended stocks are CRC, TU, GULF, HANA and BH.
1)Accelerate the disbursement of government investment budget – CK, STEC, SEAFCO, PYLON, and TASCO
2)Stocks that benefit from entering the rainy season – BCPG, BGRIM, CKP, GPSC, and EASTW
3)Stocks that benefit from government measure – ADVANC, BTS, BEM, CPF, CPALL, BJC, CRC, CPN, PLANB, HMPRO, OSP, and CBG
4)Long-term cumulative shares (DCA) – ADVANC, AOT, BDMS, BEM, CPALL, DIF, and HMPRO