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Not A Good Start For Economic Reports In April
Perspective | 08 April 2013
By: Daniel Loh
Articles (40) Profile

It has been a “so far so bad” situation for the recently released economic reports. Everything from the ISM manufacturing data, ISM non-manufacturing data, ADP employment to the weekly jobless claims have been worse than expectations. However, what is good about the market sentiment is that it remains on the upside so far.

Do take a look at our attachment below for the data figures:

Despite Thursday’s poor jobless claims, the Dow Jones Industrial Average actually still managed to close 56 points higher and the Standard & Poor’s 500 (S&P500), 6 points higher. This shows that the US market is still maintaining its amazing bullish stance.

Having said that, the stakes on last Friday’s non-farm payroll has never been higher. The economic reports’ stellar performance in the first quarter would likely be dented by the less than expected non-farm payroll results. If so, it will prove that the recent economic reports may be due to a temporary QE3 boost and a seasonally good first quarter performance. Second quarter may be tougher than the first.

Seasonally, there is always a truth to the “Sell in May and Go Away” concept as enterprises cut down on production going into the summer holidays. Normally, the effect of any positive fourth quarter earnings reports that were released in January usually gradually diminish going into the second quarter. This has happened for the last three years.

The release of US companies’ earnings results will start on Monday, 8th April beginning with the first Dow Jones 30 company, Alcoa.

To sum it up, with last Friday’s disappointing non-farm payroll results that came in below economists’ forecasts, we might start to see a few bears coming out of their hideouts.

Our trading advice for April:

1) Cut down on your bullish positions overall as risk is higher going into May
2) Take down all the stocks that did well for earnings. These are the stocks to watch out for in the second quarter. For US, earnings will be in the April to May period. For Singapore stocks, it will start in May.
3) For long term investors, wait for a consolidation to occur before entering positions.
4) For those that still have bullish positions, you may channel a bit of your funds to defensive sector stocks like Utilities, Consumer discretionary or Healthcare or REITs Stocks.

———————————————-

FREE Investment Seminar:

TOPIC: <<Will “SELL in May and Go Away” happen again this year?>> 

You will learn:

- Why is there a “Sell in May and Go Away” Theory
- What are the best months to buy and short stocks and why?
- What are the Best sectors to invest in April and May?
- Where will DOW or STI be heading in the next 2 months?

Dates:
9 Apr 2013, Tue 7pm – 10pm (English)
10 Apr 2013, Wed 7pm – 10pm (Chinese 华文)

16 Apr 2013, Tue 7pm – 10pm (English)
17 Apr 2013, Wed 7pm – 10pm (Chinese 华文)

Speaker: Daniel Loh
Venue: 141 Cecil street, Tung Ann Association Building
#07-02 S(069541),
Tanjong Pagar MRT exit G, walk straight 80m, opposite traffic light

To register, please  SMS your <Name><Email><HP><Date><Number of seats> to 9367 6623  or call 6534 9979 to enquire.

DANIEL LOH is an investment coach that specializes in equities and derivatives trading. He regularly appears on TV financial programmes like “Morning Express”, "Good Morning Singapore" and "Hello Singapore". He is interviewed bi-weekly on radio station FM95.8.

Please click here for more information about this author.


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