Vietnam Insight

The market is pricing in about a 96% chance that the Fed will cut rates by 25 basis points. US stock futures were steady on Monday as investors awaited this week’s pivotal Federal Reserve meeting. Markets are pricing in about a 96% chance of a 25 basis point rate cut on Wednesday and roughly a 4% likelihood of a larger half-point move. The expectations follow recent US data showing a cooling labor market and subdued inflation. Traders are also watching whether Stephen Miran will be sworn in as a Fed governor ahead of the meeting. Last week, the Dow advanced 0.95%, the S&P 500 gained 1.59%, and the Nasdaq Composite climbed 2.03%, with all three benchmarks hitting all-time highs. Sentiment remained underpinned by optimism around artificial intelligence, even as concerns over the economic outlook persisted.

The uptrend continues. VN-Index closed the week at 1,667.2 (+0.02%) on the weekly chart after forming a short-legged candle. On the daily chart, the index has returned to the MA 20 level after losing it in the first session of the week. However, the RSI divergence signal appeared, indicating a reversal signal. The market is expected to fluctuate in the range of 1,600 - 1,700 points next week in the base scenario.

Trading Strategy: Priority strategy: hold positions and be ready to sell as the index approaches 1,700. Recommended allocation: 50% equities, with potential to add if the index successfully retests the 1,550 support zone (50-day MA). If the index breaks below the 50-day MA (~1,550), investors should fully exit equities. Preferred sectors: Industrial real estate, Securities, Retail, Steel.

Buy Recommendation: VCB IDC