Vietnam Insight

The probability of a rate cut continues to rise ahead of a weaker-than-expected jobs report. On Thursday, the broader market closed lower, with the Dow dropping 0.55%, the S&P 500 falling 0.19%, and the Nasdaq Composite slipping 0.17%. The materials, industrials, and healthcare sectors led the declines. The nonfarm payrolls report is expected to show a gain of 200,000 jobs, with weaker-than-anticipated data potentially strengthening expectations for a rate cut. Markets are currently pricing in a 72% chance of a 25 basis point reduction this month, up from 66.5% a week earlier.

Expectation of the upgrade to emerging market drive the market higher – the securities sector surges strongly. The market unexpectedly increased strongly and had similarities with several previous increases with increased liquidity after successfully testing the 1,200 zone. The scenario of the buying side appearing and causing the index to recover from the 1,240 zone has occurred, making it highly likely that VNINDEX will approach the 1,300 resistance zone again next week. We also note that VNINDEX has been trading in the 1,200 - 1,300 range for more than half a year, so profit-taking pressure at the 1,300 zone is very high.

Strategy: Many stocks have reached the target profit-taking threshold, short-term investors can sell a portion, and take profit of the remaining portion when VNINDEX reaches the 1,300 zone.