In the news today, various sources have voiced out opinions that eased yesterday's fears and the US market reversed. This has sparked our local market to gain a solid 31.00 points to 2917.62.
From the chart above, the HSI seems to be experiencing more volatility than the STI. The Nikkei which closed a little earlier did not get to experience the rebound. Markets are currently still closely coupled.
Blue-chips ruled the Top Gainers while index Call Warrants rules TOp % Gainers. On the other hand, Put Warrants dominated both the Top Losers and Top % Losers.
Insights and Opinion
Nothing much happening now is changing the short term range outlook. I read an article about the softening of the commodities market today. Hard commodity prices seem set to correct themselves especially for crude oil, which analysts think, will return to its fair value later in the year to surge again early next year. Not much to comment about commodities as I am not an expert, however, the effects of this could be beneficial to the equities market which everyone seems to be underweighting now.
The major indices around the world have been negatively correlated to the price of oil and even gold. If these hard commodities are set to soften in prices later in the year, we can well expect a late year rally in equities. Even though it is hard to say when this will happen, it may be beneficial to collect what people are dumping now, equities. However, we do have to keep in mind that not everything is very cheap even now when the market is not in a strong uptrend. In fact, most counters in the Singapore market are hanging in a "neither expensive nor cheap, no one can tell what is going to happen so don't rush in" state.
Even though the current sentiment is to hold cash, I cannot help but think that cash in my bank account is depreciating at a rate of about 6% this year. When interest rates are low, fixed income instruments are not attractive. Reasons: 1) At low yields, fixed income instruments are relatively expensive. 2) Liquidity is not optimal (At least for me. As a calculative risk taker, you can see where my interests lie).
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