https://www.facebook.com/103841755866498/

Kaleo Go, 33 Ubi Avenue 3, Singapore (2026)

05/02/2024

*Market update 1 Jan - 3 Feb*

Hi all!

Sorry i took a hiatus in January to sort out my work. In January there’s a lot of news happening in the market as it’s the earnings season once again. Here’s some key events

China evergrande ordered for liquidation
Tesla missed earnings and dropped
US Central bank maintained key interest rates, indicated March rate cuts unlikely
Jan’s employment report remained strong, outperforming estimates, unemployment rate dropped to 3.7%

At current market situation, the inflation data seemed to stay stagnant and has had been slowed for the past few months. Coupled with strong earnings and strong employment numbers, i reckon that the interest rates are unlikely to be reduced for Q1 and Q2. The stock market has been pushed up higher by the Magnificent 7 (Amazon, Google, Mircosoft etc), but the broad market hasn’t be really moving much. It seemed that the stock market will maintain its high and once the rate is being reduced, it is likely to be pushed up higher. So far, there’s no negative news that are to push the market down. Even for earnings, although companies are cutting employment across big companies, it is actually good news for shareholders as expenses goes down, and profits can be maintained.

Also in the Chinese market, it is still unclear when will it go up given its economic situation, and just got made worst with China Evergrande being ordered for liquidation. China evergrande’s massive asset liquidation is likely to shake the market further as there are already so much assets out there for sale, more asset sale will just push prices down in the already weakened market. Unless the Chinese authorities do something to mitigate the meltdown, it might actually make it worst. One possible way is to let the central bank hold on to the assets until market recovers then sell it off (like how the US central bank held on to the Mortgage backed securities during the 2007 financial crisis).

Meanwhile, i’m maintain my position of going long on US treasuries with the expectation of rate cut, while a hold for China equities.

03/01/2024

Market Update for 2023

Finally 2023 has finally come to a close and here’s the closing update for 2023.

The year has been full of volatility for USA as the Federal Reserve raised the interest rate the fastest in the history, causing the world to wonder when will the rate hike stops, when will the inflation stop going up. As previously mentioned, the inflation was caused by excessive job creation during the covid period which caused manpower cost to shoot up, which was eventually passed to consumer. To make matters worst, the Ukraine-Russia war pushed the prices of food up, the revenge spending on travel pushes cost of travel (airfare, accommodation) up. Finally at the last few months of 2023, inflation gauge started to go down as there are more retrenchment going on, which I think will accelerate into 2024. Luxury goods prices also soften through 2023. With such gauge going on in 2023, I think that the US central bank will stop raising rates in 2024, while awaiting more negative news in the economy ( higher unemployment, higher job losses, higher bankruptcy rates, lowered GDP) to lower interest rates. Otherwise, without those negative news, I think that the US central bank will continue to hold the rates for at least 2 quarters until at least Q3 or Q4 when the above said negative news happens. In the meanwhile, the equity market will continue to be the bullish side, but I highly doubt that the S&P500 will cross 5000 market anytime soon, likely to range between 4600-4800 as most of the S&P500 mega cap has already reached the overbought region.
While awaiting for rates to drop, I reckon treasuries to be a good bet in view that we are at the peak interest rate already. If you have noticed, treasuries has bottomed out in Oct and will be likely to continue to head up into a uptrend. Since oct, REITs has also bounced as the interest rate were expected to peak. Hence it’s still a good time hold onto REITs.

As for China, we will still need to monitor China’s economic report to spot for signs of recovery. Meanwhile, China’s economics still remain weak and will need to wait longer to average out into Chinese equities.

Our investment portfolio is up overall of 25% this year and I will aim to achieve a much higher returns in 2024!

And finally, a happy new year to all my friends and investors!

06/12/2023

Market Update for 4 to 8 Dec

The market recently has been pushed up by the slowdown in inflation rate and good earnings from the Q3 earnings reporting. Also, the economy experienced a flat wage growth with a slowdown in employment numbers.

However, just Oct reports are not sufficient to determine the slowdown of inflation rate which will in turn influence the central Bank interest rate. We will be having the employment numbers this week and next week we will be jacking the inflation reports. If this month inflation data is down, we should see the central Bank holding interest rates for at least 1 to 2 quarters and us equities will likely go higher between 4700 to 4800. That will also mean that US treasuries will have an upward effect as well.

As for the chinese equities, the overall consumer sentiment and investment sentiment remains weak and moody has also cut the outlook for chinese equities. Meanwhile, we will need to wait for more data to determine more entry into the chinese equities.

16/11/2023

Market update for 13-17 Nov

The market was watching the economic report this week for indication whether the rate hike will continue after the employment report came in underwhelming last week. The CPI report was announced yesterday and PPI report is released today, at which both reports indicated a slow down in inflation rate which caused the market to rally yesterday. As mentioned previously the market will likely to be range bound between 4100-4500 level, however due to the optimism in the slow down inflation and blowout earnings, the market is likely to hit 4600-4700 this year.

However, this may be temporary as we will need to observe the CPI and PPI for the next few months to determine whether inflation has slowed down. Moreover, the Black Friday and Cybermonday sales will be observed to see whether the rate hike will continue.
If the inflation data continues to be underwhelming, I reckon the market will stay on the bullish side and the US dollar will be facing downwards pressure. The current average Price-Earnings on the top 10% of the S&P500 is ranging around 30 times and it’s starting to hit the top range of its valuation (Amazon and Tesla is at 75 times) and I think the market shouldn’t be able to hit above 4700 for the region. If inflation is slowing down, going into treasuries will be highly appropriate at the moment.

In Asia, the Hang Seng index broke up higher from its consolidation as US is trying to mend its ties with China in the APEC conference held in San Francisco. With more economic support from the government, I reckon that the China market will recover eventually.

01/11/2023

Market update for 30 Oct – 3 Nov

As we are going through the earnings season now, the big tech earnings rocked the market last week as Microsoft, Alphabet, Meta and Amazon showed better than expected earnings. However the market was brought down by the earnings of Alphabet, which caused the market to go down as a whole.

Previously, I mentioned that the market will continue to stay range bound and hitting a bottom of 4200. Now 4200 has been breached due to earnings results, and now S&P500 is now below the 200 moving average, it will mean the market will continue to slide further. However, the market will be rocked once more on Apple’s earnings on Thursday as well as the FOMC rate decision on Wednesday which I am expecting the Fed to hold interest rate for November meeting, likely to increase the interest rate in Dec. As the market continues to price into the interest rate movements, I reckon that the overall market should continue to head down. We should see some support level at 4000 for the S&P500.

In Asia, the Hang Seng index continues to remain low as the REPO rate in china shot up to 50% in a single day which signals extremely tight liquidity. This will mean that China will need to release more liquidity into the market else the market will unlikely to recover.
Meanwhile, we will continue to stay course in the overall strategy of short US equities (which is performing now), long china equities (will take some time to recover) and long US treasuries (Q2-Q3 next year).

19/10/2023

Market Update for 16-20 Oct

As we kick off the earnings for the big banks this week, we should see some potential upside to the market this week. As mentioned last update, the market will likely go into a sideway consolidation between 4200/4300-4600. I highly doubt the market is likely to break beyond 4600 due to the market sentiments and the lack of positive stimulus to push the market higher.

Given the current geopolitical situation in Israel and Ukraine, it might affect global trades hence potentially affecting the world economies. Furthermore, I am expecting that the iphone sales this year will unlikely to be much better given that its losing market shares in China. Nvidia will continue to lose revenues as US will be restricting chips sales to China.

Last week, the inflation data came out much higher than expected in the market. Which I had already mentioned previously, a hard landing is required to bring inflation down. While adding fuel to the fire, oil prices will likely to maintain between$90-110. The Fed will likely to increase interest rate one more time this year and twice at least next year and hold it till the market starts to slow down even more.

In the East, Country Garden will likely to default on all of its offshore debts and China Evergrande is starting on its liquidation process. Given the size of China Evergrande assets, liquidating their assets will have major impact on China’s economy.

In conclusion, there’s limited upside to US equities, hence it is good to short it at 4600 level, while we can look to long into treasures after 1-2 rate hike next year. Finally, long into China equities gradually.

07/10/2023

Market update for 2-6 Oct

As mentioned previously, the market lacks the stimulus to push beyond the 4500-4600 region and is set to retrace. However the downward pressure was accelerated by the increased chances of one more interest rate increase this year and potentially a few more rate hike next year to push the inflation rate down.

The only way to keep the inflation down is to cause a hard landing in the economy which will remove jobs from the system before inflation can be kept under control. To make inflation worst, oil prices went higher for the past weeks and is nearing $100 per barrel. This will definitely cause the CPI report to be high side for the next 2 months, at which, im suspecting the Fed is likely to raise rates one more time this year, from 25-50 basis points.

This week, we will be having the employment report at which it is likely to be robust. In the event of a positive employment report, the chances of one more rate hike this year is high.

On the other side of the world, China still struggles to fight the deflationary pressure caused by the property market and will continue to be in the bear market until more stimulus is being rolled out to push the market higher.

For now, the key strategy will be to short equities (at around 4500-4600 level), long US treasuries (after 2-3 more rate hike) and to long China (prepare to hold for long and to average down on positions)

21/09/2023

Market updates for 18 to 22 sep

The market this week will be heavily gyrated by the economic data this week. This week with Australia releasing monetary policy minutes to Canadian cpi reports and fed fund rate on Wednesday night, Swiss central Bank rate, bank of England rates announcement on Thursday.

I'm expecting the fed to hold the rates till end of the year unless the inflation shows significant increase again. The equity market is likely to stay sideways between 4300 and 4600 while waiting for more stimulus for breakout.

However, as mentioned before, the market will need to have a hard landing to solve the inflation issues caused by manpower wage increase.

In Asia, Chinese shares remained depressed as China continued to battle its unemployment and deflation issues. China will need to spend more out of this deflationary cycle.

We should expect US treasuries to bottom out next year.

13/09/2023

Market update for 11-15 Sep

As mentioned last week, the market is likely to be in a sideway trending market as S&P500 bounced off 4350 and was limited at 4550. I reckon that the market will likely to start sideways as Apple releases iPhone this week. The market will likely to lead from Apple’s iphone sales as they are starting to export india made iphones. However, as China rolled out its latest Huawei’s phone, which are likely to be a direct competition with iPhone in Apple’s biggest market, which is likely to cause some disruption to its sales. The sales will likely to indicate China’s consumption power. Furthermore, Oracle faced its biggest drop today and caused a downward effects on the broader market.

This week will be likely to be quite as we have only that ISM service PMI report coming out on Wednesday. However next week will be volatile as the market will be expecting the inflation figures on Wednesday 830pm.

The Hang Seng index remained at the low as Country Garden managed to secure a 6 months extension on its bond repayment. China will remain bearish as China will be combating a deflating economy coupled with a collapsing real estate market. As mentioned, the only way China can beat the deflation will be to increase spending tremendously, which we will expect China to roll out stimulus packages within the last 4 months of the year.

07/09/2023

Market update for 4-8 Sep

As mentioned previously, the market will be hovering between 4300-4500 at present moment as the market is lacking stimulus to push the market higher. Last week the official unemployment rate went up from 3.5%-3.8% while the non farm employment change showed higher than expected number at 187k jobs created. This added on to the mixed reactions in the market. Furthermore, the Fed announced recently that the inflation is way too high and they are determined to bring the inflation down to 2%.

The global inflation is largely caused by too many jobs were created during the covid period and the lack of manpower is causing the inflationary pressure. The only way to solve the situation is through a hard landing in the economy which will take jobs away from the system, which means, the market has to go through a rough patch before inflation goes down to 2%.

On the other side of the world, China is facing a deflationary situation where the real estate continues to sink and a huge number of graduates are unable to find a job. The only way out of the situation is to keep spending money and keep interest low to spur economic activities.

Hence, the key strategy is still to go long on China (stages by stages) and to long on US treasuries or short US equities (at around 4600 points on the S&P500).

22/08/2023

Market Update for 21-25 Aug

As we had the FOMC minutes last week, fed officials indicated that there might be more rate hikes needed if inflation remains high. Given the situations in Ukraine, where Russia is causing issues to the Black Sea export of grains from Ukraine, is putting price pressure on grains prices.

However the core problem remains for inflation, which is manpower issues caused by covid. During covid, jobs were created to offset job losses, but after covid ended, their excess jobs going after limited pool of manpower which causes a bulk of the price increase. The only solution is for businesses to shut down so that inflation can truly go down.

With that in mind, we should be expecting inflation to remain elevated and the world has to go through a deeper recession to curb inflation. However, the equity market is on a uptrend and I’m expecting S&P to remain in the 4100-4500 level as earnings from the key components are positive. However, I don’t see much growth in top lines and bottom lines for most companies given the price and interest rate pressures.

On the Asia front, China continued to get hammered by real estate issues from Wan Da, Country Garden and Evergrande, which is causing downside pressures in the Chinese economy now. Strong stimulant will be needed from the Chinese gov to bring the economy back to its feet’s again.

08/08/2023

Market Update for Aug 7 - 11

The market last week was exceptionally volatile as Apple and Amazon announced their earnings while the employment report is being released last week. Apple had a disappointing earnings while Amazon announced a blowout profits. Apple’s declining revenues were a major concern and the upcoming iPhone 15 better have a strong reason for consumers to change their iPhones.

The employment reports on Friday were underwhelming which will be one of the reason for the central to pause the rate hike. However we will need to monitor the CPI and PPI report this week.

As mentioned, the market currently lacks strong reasons to push the market beyond 4500 level and we should be expecting the market to retrace if the inflation data remains elevated.

Kaleo Go

05/02/2024

03/01/2024

06/12/2023

16/11/2023

01/11/2023

19/10/2023

07/10/2023

21/09/2023

13/09/2023

07/09/2023

22/08/2023

08/08/2023

Address

Telephone

Website

Alerts

Contact The Business

Shortcuts

Share

Category