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US Indices Rally While Poll Shows Europe Pessimism
Singapore Market Commentary | 14 November 2014
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By: Shane Goh
Articles (99) Profile

Over the past 9 trading sessions leading up to 13 Nov-14, the Dow Jones index rose 1.5% to hit a record intra-day high of 17,705.48 before closing at a record-high of 17,652.79.

The uptrend was shared by its counterpart, the S&P 500 index, which closed just shy of its record-high. As of 13 Nov-14, the latter traded at 17 times forward earnings, its highest valuation since Dec-09.

The markets rallied on the back of positive macroeconomic news. In Oct-14, US unemployment rate fell to the lowest level in 6 years while employers added more than 200,000 workers to payrolls for a 9th consecutive month.

However, the rosy picture was not shared in Europe as a Bloomberg Global Poll of international investors showed that almost two-thirds said the economy was weakening while 89% saw deflation as a greater threat there than inflation in 2015.

In Asia, China’s slowdown deepened in Oct-14. Factory output grew 7.7% y-o-y, sandwiched between Aug-14’s 6.9% and Sep-14’s 8%. This is the second-weakest pace since 2009 and gives further credit to the view that the nation is on track to expand at its slowest space in 24 years.

Looking ahead, investors and observers would be eyeing the Shanghai-Hong Kong link up scheme, which is expected to go live on 17 Nov-14. While pessimists in the street reckon the scheme could send liquidity and potential listings away from Singapore, the general consensus is the move would benefit the two bourses involved.

On local shore, OSIM International, Super Group and Japfa suffered sharp drops in their share prices following lacklustre financial performances in the latest earnings season.

Currently pursuing his Chartered Financial Analyst qualification, Shane provides coverage on the property, consumer and environmental sectors at Shares Investment.

Please click here for more information about this author.

Japfa  0.550 -0.010 -1.79%   
Business: Co is an agri food company that produces multiple types of protein foods. It is headquarterd in Singapore and has operations in China, India, Myanmar and Vietnam.

Insight: Feb-19, FY18 revenue rose 10.8% mainly driven by h... Read More


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