Vietnam Insight

Low volatility. US stock futures were largely unchanged on Friday, as investors digested the implications of President Trump’s recently passed tax-and-spending package on the nation’s already sizable fiscal deficit. During Thursday’s regular session, the Dow closed flat, the S&P 500 edged down 0.04%, while the Nasdaq Composite gained 0.28%. The newly approved budget bill, which features tax cuts and increased defense spending, has raised concerns that it could further inflate the US national debt. The Congressional Budget Office estimates the bill’s cost at nearly $4 trillion, heightening fears of long-term fiscal instability. These concerns were amplified by Moody’s recent downgrade of the US credit rating from Aaa to Aa1, citing rising deficits and the growing cost of servicing the national debt.

Heighten volatility near 1,300. VNINDEX closed at 1,312.82 (-9.21 points, -0.70%) with liquidity around the 20-session average. The market had 98 gainers and 214 losers, most of the sectors were under pressure to decrease points. The stocks that contributed the most to the market's increase were HVN, VHM, GAS while VPL VIC and CTG contributed to the market's decrease. Foreign investors net bought nearly 119 billion, the value mainly concentrated in VIX and MWG stocks.

Trading Strategy: Investors are holding off on new purchases and looking to sell as the market shows signs of distribution. Following this correction phase, investors may look for opportunities in stocks benefiting from domestic fundamentals, particularly in sectors such as steel, banking, securities, and energy.